MUMBAI, Aug 17: After finance companies, now it is the turn of manufacturing companies to run from pillar to post for despatch of dividend/interest warrants.The restrictions imposed by the Reserve Bank of India (RBI) on the `at par facility' offered by various banks to facilitate encashment of warrants have put hundreds of companies in trouble.According to market sources, almost all the companies which declared dividends for the year ended March 1997 have been forced to look for alternative methods to deliver the warrants. While the RBI has taken the decision after the multicrore CRB scam in which the State Bank of India was duped by the finance company, banks are blatantly refusing to offer `at par' facility even to manufacturing companies.Banks have drastically reduced the number of branches available for `at par' facility. As a result, companies are being prompted to use methods like demand drafts (DD) for sending outstation dividend payment. For example, Union Bank of India has decided to restrict the facility to a limited number of branches all over the country. As these branches will cover only the major metros, companies have to draw DD or Pay Order in the name of the investor and despatch to investors from rural and semi-urban areas where the facility is not available. ``This new hurdle will also increase the clearing charges to the small investors. Because of these hurdles, investors will be reluctant to put money in the FD schemes,'' said the company secretary of multinational firm.According to officials of the Mafatlal Dyes and Chemicals, the bank refused to give `at par' facility throughout the country and provided the same only in 44 branches. While most of the investors are from Gujarat, there are only five branches Ahmedabad, Surat, Baroda, Rajkot and Bhavnagar providing `at par' facility. The company has to send DD for paying dividend warrant to the shareholders not covered under these five branches. ``Dividend warrants of investors beyond the limit of these areas will have to bear the clearing charges and time delay in getting their warrants encashed,'' they said.WHile Alpic Finance which was denied the facility by SBI has shifted its business to Bank of Madura. Another finance company, Credential Finance Ltd, of Mumbai has shifted the same to Federal Bank. ``For better coordination of fixed deposit operations, we shall now be operating through the Federal Bank. We request our depositors to return all SBI instruments issued by us, to any of our branches or to the broker through whom the deposits were placed,'' said a communication from the company to its FD holders.Even though the State Bank of India is reviewing the facility on an individual basis, many of the finance companies are preferring small banks with limited number of branches. SBI and its seven associate banks with the largest number of branches had monopolised the market for at par facility.
