If your bank account is in HDFC Bank, then this news is very important for you as Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs 1 crore on HDFC Bank for invoking securities pledged by stock broker BRH Wealth Kreators. The SEBI has imposed the penalty for violation of its interim directions.
SEBI has imposed this penalty on HDFC Bank because it has sold some of the mortgaged shares of BRH Wealth Kreators, which is in violation of the interim order of SEBI. In an order, SEBI has also directed the bank to deposit interest of Rs 158.68 crore held in an escrow account and 7% per annum till a decision is reached in the case.
The impact of the penalty imposed by SEBI on HDFC Bank also showed on its shares as the bank’s stock plunged 2%. In fact, despite instructions from an interim order of SEBI, HDFC Bank had sold its mortgaged shares to BRH to recover its outstanding debt. The order was given by SEBI against BRH Wealth Creators and other units on October 7, 2019.
SEBI said that its interim order was not a final determination of the right of recovery, but was intended to prohibit the buying and selling of BRH’s assets until the investigation or forensic audit was completed, which did not compromise the interests of investors. According to SEBI, HDFC Bank will have to pay the fine in 45 days.
Although the SEBI’s penalty will not affect the HDFC bank account holders, but those who have invested in HDFC Bank shares may suffer as the bank’s stock has fallen by 2% after this development.
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