A payment problem was reported at Calcutta around mid February and caused a few jitters but it was quickly settled. In fact, market reports suggest that Parekh also holds a sizeable chunk of GTB equity and hence received large funding from the bank. Interestingly, UTI Bank, which is all set to merge with GTB is also reluctant to dig hard for information. Its attitude is that any difficulties that it encountered would have to be faced after the merger. SEBI remained unperturbed, probably because the upsurge in old economy scrips prevented these market rumors from affecting the Sensex, although specific ICE scrips fell steadily.
Nobody knows for sure, because there is no investigation.
Between them their borrowings exceeds Rs 300 crore. On checking, I was told that this figure was not considered excessive and he had a larger exposure with another private bank. Clearly, authentic and independently verified information about his financial status is not available. However, on Februrary 27, the BSE pay-in was delayed because Ketan Parekh's firms had payment difficulties. The problem was resolved when an influential industry house arranged finance from a European bank.