RBI asks Lehman Brothers' arms not to remit money

MUMBAI: The Reserve Bank today asked US investment bank Lehman Brothers' NBFC and primary dealer arms not to remit money in forex without its approval. (Watch)

The central bank also stopped the Lehman Brothers Fixed Income Securities, the primary dealer arm, to deal in government securities.

Lehman Brothers has succumbed to the financial turbulence and has filed for the world's biggest ever bankruptcy protection.

"RBI is keeping a close watch on the developments of filing of Chapter 11 bankruptcy petition by Lehman Brothers Holding in the US and is in constant touch with banks and other market participants to manage any fallout of these developments in the Indian markets in an orderly manner," the central bank said in a notification.

"Lehman Brothers Fixed Income Securities has been advised not to undertake transactions in Government securities as a primary dealer in the primary market," RBI said.

The central bank also asked the primary dealer arm not to declare any interim dividend without its approval.

Besides, RBI asked Lehman Brothers Capital Ltd, the NBFC arm, to seek its approval before reducing its direct or indirect liability in any institution in India or overseas.

The primary dealer arm was also advised not to remit any amount to its holding company or any other group company without approval of RBI.

In a separate move, RBI today announced measures to inject liquidity in the system, coping the crisis thrown out by meltdown of two US financial institutions and advance tax payments by corporates.