The Securities and Exchange Board of India (SEBI) has slapped a fine of Rs 1 crore on HDFC Bank for invoking securities pledged by stock broking firm BRH Wealth Kreators in violation of an interim order by the regulator.

The regulator has also directed the private bank to transfer Rs 157.68 crore along with 7% interest per annum from 14 October 2019 till date to an escrow account, till the issue of settlement of clients’ securities is reconciled.

In October 2019, Sebi had barred BRH Wealth Kreators from the market and also directed depositories and banks not to make debits from the demat and bank accounts of the stock broker.

HDFC Bank had granted credit facilities worth Rs 191.16 Crore to BRH and Rs 26.61 Crore to BRH Commodities. cOut of this, Rs 87.75 crore was granted as loan against securities (LAS).

On 14 October 2019, HDFC Bank had invoked securities pledged by BRH to the extent of Rs 158.68 crore.

The invocation of pledge of client securities available in the two demat accounts of BRH, by HDFC Bank, was allegedly not in conformity with the directions contained in the interim Order, the Sebi order said.

BRH was permitted to only pledge securities of debit balance clients or clients having indebtedness to BRH at the time of creation of such pledge, the order added.