RBI strikes off Foresight from satellite dealers’ list

In the first week of April a list of dealers was approved by the RBI which included Foresight Financial Services Ltd. The entities included Ceat Financial Services, Peregrine Capital, Birla Global Finance, JM Share & Stock Brokers, RR Financial Consultants, Hoare Govett Securities, Mafatlal Securities, Dil Vikas Finance, Birla Martin Securities, Prudential Stock and Securities, AK Capital Services, Ashok Leyland Investment Services and SREI International Services.

After a hue and cry was raised about some of the names in the list, the RBI came out with a new list which included better known names like DSP Merrill Lynch, Kotak Mahindra and Escort Finance. According to debt market dealers, some of the satellite dealers selected by the RBI have no presence in the debt market.

The RBI has stated that the appointment of the primary dealership and satellite dealership is an ongoing process. However not one single primary of satellite dealer has been in appointed in the past two months. None of the satellite dealers have started their operations yet as the RBI has yet to give them the green signal.

In the meantime, it is understood that RBI is considering revoking the satellite dealership licence given to the Vinod Baid-promoted Prudential Stock & Securities. The move follows Sebi’s decision to debar the Calcutta-based Prudential Capital Markets from accepting any fresh assignment as a merchant banker following the detection of some irregularities during an inspection.