PUNE: The reaudited report of the National Bank for Rural and Agricultural Development (Nabard) on the Rs 52,000-crore agricultural debt waiver and debt relief scheme (2008), shows that loan amounts of about 3,000 farmers from Kolhapur, who owed Rs 2 lakh each, were waived when the ceiling was set at Rs 1 lakh per farmer.........
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Saturday, April 27, 2013
Banks to continue focusing on retail credit in FY14
Banks are once again relying on retail credit in the current financial year to drive credit growth. This is because credit demand from the corporate sector may continue to remain weak. In the previous financial year, banks had focused a lot on retail credit as corporate credit demand had slowed down amid economic growth at its slowest pace in a decade...........
Banks' put contracts cheapest in 6 months before RBI meet
........The Reserve Bank of India may pare its benchmark rate by 25 basis points at a May 3 policy review, according to 14 of 16 economists in a Bloomberg survey. The bank index has jumped 14 per cent in April, poised for the biggest monthly advance since September, amid speculation a cut in borrowing costs would help lenders boost lending and profitability. "Investors are bullish on banks even after the runaway rally," ...........
ICSI to organise national seminar on ' Indian Financial Code'
..........The seminar will cover various sub themes like Regulatory Regime. Others speakers at the conference include Dr. Kanagasabapathy, Director, EPW Research Foundation,...........
Read - FPJ
Banks stepping up efforts to get ‘Know Your Customer’ details
........Now, if you have not stepped into a bank branch in a long time due to the convenience of Net banking, then not submitting the KYC documents (latest photograph, original and self-attested copies of identity and address proofs) could land you in hot water...............
Did HSBC Bank resort to toxic churning and illegitimate transactions to earn commissions?
.....The modus operandi for HSBC in both the cases has been a continuous churning by the “portfolio management service” by taking a power of attorney (POA) and used pre-signed blank letter of intents (LOIs) to execute the transactions on behalf of the clients. The London-based NRI mentions that he was asked to sign blank LOIs. On asking the bank to provide copies of the LOIs, he found that certain forms were not signed by him due to a mis-match in signature. He has even provided forensic evidence to prove that he has not signed on certain documents..........
Gold’s eternal lustre
..........Apart from gold, the RBI’s reserve assets include foreign currency assets, Special Drawing Rights (SDRs) and reserves held with IMF. SDRs are artificial currencies used by the IMF and defined as a “basket of national currencies”. The IMF allocates SDRs to its member countries and uses them for internal accounting purposes. Central Banks are the biggest losers in the latest price crash as they own 31,694.8 tonnes or 19 per cent of all gold mined. It is reported that the recent fall in gold prices has already eroded $560 billion from the value of central bank reserves. Some central banks, such as that of Canada, eliminated their gold stock..................
No evidence of money laundering, says Kochhar
......."The internal inquiry report has been submitted. Deloitte has also submitted its interim report. No actual transactions (violating anti-money laundering rules) have been found to have taken place,"............
In Bengal's grey 'money market', Saradha is just one
..........Cheating of investors falls under one of the following laws : a) ‘vanishing’ after raising money through public offers; b) illegal collection of deposits in violation of Section 58A of the Companies Act, 1956; c) floating sham CIS in violation of SEBI Act; d) collecting money from public by posing as ‘Non-Banking Financial Companies (NBFCs) in violation of RBI Act; e) and resorting to ‘Ponzy’ or money circulation schemes under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978...........
Government yet to crackdown on multi-level marketing firms
......The draft was first prepared with consultation of RBI in 2005. It was approved by the state cabinet and was sent to the Centre for approval. The Centre sent it back to the state with some recommendations and ever since the home department is sitting on it. The government showed "interest" after the Gold Sukh case but failed to actually work on the pending matter.........
Mumbai Police steps up vigil on chit funds, ponzi firms
...........The EOW has updated the list of such units functioning in the city and collected information from the Reserve Bank of India and the Securities and Exchange Board of India. Besides, the state government has asked the police to closely watch the present developments and take punitive action against such companies after they receive complaints, to protect the interest of investors..............
While they were sleeping
..........The plan was to encourage middle-class investors to branch out to other, more attractive financial sector investments ranging from equity to pure play debt products like pension schemes. The remedy, instead, let fraud organisations like Saradha and others prosper. One of the elements of the government plan was to dismantle the National Savings Organisation (NSO), which ran all the state-run small savings schemes. The option was for the states to run them as they saw fit. The states except West Bengal saw no need to advertise and more significantly pay high agency commissions to mobilise money they did not need..........
Saradha scam: 13 co-op banks under RBI scanner
............“Be it negligence on part of the authorities in verifying credentials of account holders or their proximity to group officials, we are determined to take stringent action against staff members who are found guilty,” said a senior RBI official.............
RBI posers to govt went unanswered
......With the RBI receiving several such complaints, it wrote letters to the state government in January this year as well as February urging it to take action against shady chit fund companies operating in Bengal. The letters, which were sent to the office of chief secretary as well as Chief Minister's Office state that the RBI was receiving several complaints from people regrading chit fund companies operating in the state. As the responsibility for prosecuting these firms for any violation of law is with the state government, the state government should take action against them, it added. The government did not reply to any of the two letters of the RBI...........
Something to bank on
................ But whatever the constitutional division of powers between state and Centre, the Reserve Bank of India cannot run away from its duty to save the country from the financial equivalent of the law of the jungle. Since the Securities and Exchange Board of India had earlier acted against some companies that run dubious deposit schemes, it can’t shirk the responsibility either. But there are strong suggestions that West Bengal’s political establishment, the police who are its handmaidens (as they are of any party in power) and even the law courts frustrate Sebi moves to protect ordinary citizens...........
Banking on lies
..............To his agents, Sen had said he has lost a great deal of money in a real-estate project. To some other agents, Sen had said he was forced to give Rs 1,200 crore to Reserve Bank of India and Rs 600 crore to Securities Exchange Board of India to keep his business afloat, which had eroded all his wealth................
Can legal measures root out chit fund frauds? - Yes
............Such schemes will not always come under the express domain of any regulatory authority or statute. Given the popularity of such money-making schemes, our legal framework must keep pace with such hybrid investment arrangements and methods of raising funds from the public.
Can legal measures root out chit fund frauds? - No
........Isn’t all this enough for Saradha to be booked under the existing laws? This only goes to show that the best laws can fall by the wayside in the absence of political will to implement them. That political personages lend legitimacy to dubious activities only makes implementation of the law that much more difficult.
Didi wants Centre to pay Rs 500 crore for its ‘sins’
...."The Left government should have made the legislation in the 1980s when Sanchayita (a chit fund company) went bust leaving thousands of people pauper. But the chit fund mess was allowed to grow just because of evil designs of the Marxist government as well as the casual attitude of the central government. The centre cannot shirk its responsibility. The SEBI and RBI are in their hands. I will ask Rs 500 crore from them,"..............
Mamata ‘smoke to help’ remark earns ridicule
......."Smoking is injurious to health. Tobacco tax to mop up revenue this way means you assume that people will smoke more. This may create revenue for the state. But if citizens smoke more to mop up revenue for the state, the state will have to pay for their health. This is a dichotomy. This must by Mamata's mantra for the youth. I do not understand the philosophy behind it,"...........
Read - IE
Chit fund swindle: Is there no monitoring?
........It is extraordinary that it’s still so easy to run such a scam in the era of Sebi and RBI regulations and monitoring, and when financial sector “inclusion” is the mantra of the finance minister and Prime Minister. It is hard to believe these worthy institutions could be oblivious that swindlers and profiteers had built financial empires in flagrant disregard of every imaginable rule or guideline............
UBI had warned Bengal of ponzi scheme menace
...........Asked if there should be more stringent know your customer (KYC) norms implemented by the Reserve Bank of India (RBI), Sanjay Arya, executive director, UBI said, such companies cannot be prevented from using the banks. He said, “The current RBI norms are strong enough, but none of these measures can check these companies. All these chit funds have their KYC documents in place, it is not an issue with them.
Alarmed Bihar cracks down on chit fund companies
Patna: Alarmed at the big fraud committed to gullible investors by a chit fund company, Saradha group, in the neighbouring West Bengal, the state government in Bihar has issued an alert, advising the masses against falling into the traps of the non-banking companies promising hefty monetary returns. The government even announced to tighten nooses around these companies which have mushroomed up in recent years.............
The Mamata Banerjee story is over...
.........In December 2012, Reserve Bank of India (RBI) Governor D Subbarao publicly told the state government that it needed to be vigilant on the operations of chit fund companies. "Money circulation schemes are banned under the Prize Chit and Money Circulation Schemes (Banning) Act, 1978, and the respective state governments have the power to take action against people involved in such schemes," he said, asking the state government to intervene.
No one in the state did anything...............
Big Peddlers But Small Change…
.............Confronted with this swindlers’ list, naming many of her own, you would expect TMC supremo Mamata di – whose infamous Kolaveri di has earlier fallen on a hapless professor fond of cartoons, on a farmer raising an inconvenient truth, and so on – to hit the Writer’s Building roof. Right? Wrong. And here’s why – Didi has apparently discovered the joys of peddling too. When the Saradha ruin surfaced, Mamata first tried to sell her usual Left-plus-Centre conspiracy theories to give TMC a clean chit. When no one bought this, she switched wares and promised to refund depositors Rs 500 crores. But before you swoon at her generosity, note – this money will come from tax-payers, not the government seizing Saradha assets, still linked to powerful agents of change. So it’s the Peter principle – robbing Peter to pay Paul once again...........
Trinamool runs aground on cheat funds
.....Soon, hordes of depositors from all over the state descended on Kolkata to ask for their money back, from an already-bankrupt government. Some despairing depositors killed themselves. Thousands of agents are reluctant to return home, fearing that they could be lynched by the people whose deposits they had taken. Mamata has tried to wriggle out of her association with Saradha. She has promised to implement a law which the Left had tried to do earlier, which penalizes Ponzi schemes.............
Investors throng Saradha offices, NBFCs for return
.....The much publicized chit fund scam of Saradha Group companies in Kolkata and Assam, has evoked widespread outburst among the depositors in urban and rural Jharkhand. The people who have invested their money have been thronging in the offices of the chit fund companies and non-banking financial companies ( NBFCs) to get back their deposits......
Friday, April 26, 2013
Why govt may shift cash holdings from RBI to commercial bank
Fund transfer unlikely in a hurry: banks
......So far RBI has been acting as the banker to the government. But such transfers will mean banks will now have to act as lenders to the government, requiring an amendment to the law. In 2011, the Deepak Mohanty committee set up by RBI to study the operating procedure of monetary policy had recommended auction of the government’s cash balances. Its report also acknowledged that this was under the consideration of the government and RBI. Bankers, who also met the finance minister on this matter, said, “He was open to it, but RBI had reservations, as they said that a subsection of the RBI Act would have to be amended before any auction of the government money could take place.”............
Too Careful Regulation Breeds Too Many Crooks
......The
regulator is more concerned about risk management and prevention of
scams than about the sector’s growth. Therefore, nobody is responsible
for the large scams happening outside the regulatory ambit. Allow the
regulated sector to grow faster — and be prepared
for the small problems that come up with it. That is any day more
financially prudent than allowing a fast-growing economy’s needs to be
met by an unregulated sector.............
Needed, Unified Financial Regulation
...... At present, the RBI bears the regulatory responsibility for non-banking finance companies, and Sebi, for collective investment schemes. In the wake of the Bengal crisis, Sebi wants to regulate some of the schemes, while both failed to pre-empt the failure. What is needed is not a turf war among regulators but a unified regulatory structure for finance that heeds the mandate of a macroprudential regulator and is institutionally accountable to a committee of Parliament. We need to subsume the present multiplicity of financial regulators under a common authority that sees neither turf boundaries nor turf overlaps...............
Incredible Summer Internships with the Reserve Bank of India
Do something out of the ordinary this Summer
- Learn about the world of business in India through work experience at the Reserve Bank of India (RBI) – the country’s central bank.
- Experience India’s fascinating culture first hand
- Enhance your employability with new skills and experiences….........
Building liability, organization key to be a bank: L&T Finance
..........“For liabilities, it is important to put the branch network and the right people to mobilise deposits. The transition of our human resources to a banking mindset is also important,”..........
New banking licence or old banks with new names?
..............Finally, even before the issue of new banking licences is settled, it is time Dr Subbarao recognizes the urgent need to review and increase the deposit insurance cover of Rs1 lakh (as at present) to a realistic figure of say Rs25 lakh for an individual or Rs50 lakh for a couple, if held in joint names. While savings are encouraged, the insurance cover of Rs1 lakh necessitates the account holder to open in accounts in number of banks to protect his savings. This ludicrous coverage must be revised immediately............
‘Getting Bank Licence Will Not be a Cakewalk’
Bagging a banking licence is going to become tough for corporates and finance firms with the Reserve Bank of India bent on pushing the financial inclusion goal. “It (getting a banking licence) will not be a cakewalk as it was in 1993-94,” said RBI deputy governor KC Chakrabarty. “This time, the opening of (new) banks is not so easy because we have got PSL (priority sector lending) norms, which are mandatory, and 25% of the branches have to be opened in unbanked sectors,” he said at a conference this week. ..........
Read - ET
Read - ET
How to serve the unbanked!
.............As private banks cannot justify on commercial grounds the business model that allows them to deal with the triple whammy of low savings balances, small transaction sizes and a large number of customers, they will typically pull back their physical presence in rural areas to discourage the custom of poor. But to ensure that the objective of financial inclusion is met, it is essential that poor people are ensured of low-cost ways of transacting.......
Most viable option: Cut repo rate, CRR by 50 bps each
Bloodletting was a popular treatment for hypertension in the 19th century. In most cases, this did more harm than good. The singular focus on restricting money supply, keeping interest rates high and thereby squeezing demand as a panacea for treating inflation requires some serious rethinking...........
Low inflation may ensure an easy money regime
Rarely does a central bank feel happy when its prediction goes wrong, but the latest release of wholesale price inflation data, on 15 April, was such an occasion for the Reserve Bank of India (RBI). The data showed that the genie of wholesale inflation had finally been bottled in India, Asia’s third largest economy, and it may remain so at least for the time being with global commodity prices increasingly moving south.............
Fake I-T official dupes job aspirant
NAGPUR: Job aspirant Dhanraj Dange (34) was allegedly duped by Arun Sontakke who posed as an income tax commissioner, to the tune of Rs 50,000. Dange was promised a job with the Reserve Bank of India..........
COBRAPOST
The Sting operation by COBRAPOST on three high profile and successful private sector banks has clearly revealed that their officials were prepared to indulge in a Money laundering operation. The officials involved, the conversations have all been brought out with out any doubt. I am told ( I had not listened to all the conversations in the website of Cobrapost) that one official of a bank was prepared to open thousands of accounts in benami names! As far as I have understood, it was not the case of COBRAPOST that money-laundering operation had indeed taken place in these cases. If officials have indicated their willingness to open benami accounts and resort to money laundering operations, it is a reasonable deduction that they might have done in some cases in the past which had not come to public knowledge or knowledge of the authorities. In these circumstances, it is most unfortunate that a statement has again been made ( as reported in the newspapers) by a top ranking official of RBI that no money laundering operation had taken place in these cases.
The officials of the three banks who have been caught on camera in the sting operation deserve very severe punishment not excluding even dismissal. This can only confirm the seriousness and sincerity of the statements of these banks that the conduct of the concerned officials is out of step with the policy of the banks. If the banks hesitate to award severe punishment to the concerned officials, RBI would have to insist on this if they wish to effectively enforce their regulations.
- A. Chandramouliswaran, Former Executive Director
It’s all About that Rate
This refers to ‘Chits are not Cheats’ (ET, Apr 25). The article makes the RBI the villain of the piece. Spreading banking through physical branches and mobile technology cannot be an insurance against people falling victims to Ponzi schemes. When banks offer low rates of interest on savings, people will be attracted to schemes that offer higher rates. The 2008 financial turmoil in the West was also caused by low interest offered by banks on deposits and investors looking for higher yields in unregulated markets.
- S SOLOMON RAJ (ET)
- S SOLOMON RAJ (ET)
Mamata Banerjee under attack for asking people to smoke more
...........After declaring the 10 percent additional tax on cigarettes, Banerjee with a smile had said: "Smoke a little more to help the investors". Congress MP and spokesperson Renuka Chowdhury described Banerjee's suggestion as "alarming and destructive"............
Saradha Chit Fund Scam: Why Mamata Reacts, not RBI?
.........Ironic but not rational. The society or tax-payer at large cannot always foot the bill of fraudulent players in society. Though chits come under the state list, the Centre and the RBI cannot wait for scams. When microfinance players can be curbed with an iron hand, why not the street-corner chit fund organisers? The question should be how soon than when?...........
Read.........
Read.........
Smoke ‘n’ mirrors
...........The larger point, as our lead story brings out, is that the process for tackling such frauds is riddled with problems. The fact is that Saradha did not happen while no one was watching. Sebi had been investigating the company for three years. That Saradha continued to raise money from investors speaks volumes about how inefficient the regulatory process is............
Saradha fraud: Blame the RBI for the repressed formal financial sector
.....The relationship between the regulated and the unregulated parts of finance is not that between night and day, where the one is the obverse of the other. The RBI's regulation is more like a tourniquet tied too long: it staunches the bleeding, all right, but it also cuts off blood supply to another part of the body, killing tissue and nerve. .......
Saradha investors queue up at Ratu
...............Taking a cue from this huge racket, the Jharkhand government has brought over 100 non banking finance companies (NFBCs), operating in different districts of the state, under the scanner. These NFBCs have been booked in the past couple of months for violating the public deposit norms of the Reserve Bank of India (RBI) and the Security and Exchange Board of India ( SEBI). Over 20,000 people who had invested in these companies now feel cheated..........
SEBI digs deeper, chit scam gets bigger
.........For SEBI, it has been a long, lonely and frustrating battle against not just the Rose Valley group, but five more companies, including Saradha, where lakhs of investors have deposited money in various schemes. At the regulator's instance, the Union Finance Ministry wrote to the West Bengal government almost a year back to rein in such companies that are defrauding investors. But little or no action has been forthcoming so far, said sources in regulatory agencies............
Chit fund cheats
.........Punishment for fraud is rare. RBI and SEBI rules and regulations on investments apply to banks, mutual funds or other structured financial bodies. There is need to fill this regulatory vacuum and to bring the chit funds and other similar money-raising schemes under effective scrutiny..........
Lazy Bones and Ponzi Dreams
‘Create More Banks, Chit Funds will Die’ (ET, Apr 23) rightly stated that the lack of sufficient financial inclusion is responsible for the proliferation of Ponzi schemes. Even existing public sector banks have failed to attract rural customers. Banks even drive out people stating they have reached the target in savings accounts. Even when achieving financial inclusion targets, banking efforts have been directed towards opening deposit accounts and loans. These accounts also become dormant since account holders are not motivated to continue the banking relationship. So, Ponzi schemes and moneylenders benefit.
- KV RAO, Bangalore (ET)
- KV RAO, Bangalore (ET)
Mamata drags Chidambaram’s wife into chit fund scandal
........Moving aggressively to contain the political fallout from the unravelling of Saradha, in which thousands have put in their money, Mamata's Trinamool asked Chidambaram to clarify the links of his wife, Chennai-based senior lawyer Nalini Chidambaram, with the Saradha chief...........
Bengal govt ignored investors’ complaints
........One complaint was lodged by a women from Nadia. She had deposited Rs 50,000 in one of the investment schemes of Saradha. She sent a letter to the RBI on February 1, requesting it to give details on whether the investment scheme was registered or not. The RBI replied that it does not look after this matter and asked her to lodge a complaint with the Economic Offence Wing of the Finance department. But no action was taken..........
Banks plan to introduce certificate of deposit curve
.........However, few experts are of the view that the proposed idea may not be a success as it cannot be compared with the government securities curve. “There is no credit risk for government securities. Here this curve does not take into account the credit risk involved and the demand and supply factors,” ...............
United Bank to apply for overseas licences to RBI
............"We will apply for overseas licences to RBI as bank's capital adequacy is good coupled with robust risk management practices," Archana Bhargava, the bank's newly-appointed chairman and managing director Bhargava told reporters in Kolkata on Thursday..................
Read.....
Read.....
Thursday, April 25, 2013
Bengal has appetite for credit: RBI
KOLKATA: Despite banks attributing West Bengal's low credit-deposit ratio to lack of demand, Reserve Bank of India (RBI) views the state has a reasonable appetite for credit. "I do not agree to the banks maintaining that credit absorption in low in West Bengal due to lack of growth, the state has a good appetite for credit", Regional Director (east) of RBI B P Kanungo said. ............
STATE LEVEL INTER SCHOOL ESSAY COMPETITION FOR THE STUDENTS OF WEST BENGAL 2013
With a view to spread financial literacy the Reserve Bank of India (RBI), Kolkata is conducting a
State Level Inter School Essay Competition for school Students in West Bengal as detailed below...............
Archana Bhargava appointed as CMD of United Bank of India
The Centre has appointed Archana Bhargava as Chairman & Managing Director of United Bank of India, a public sector lender. Prior to this appointment, Bhargava was an Executive Director at Canara Bank (since April 1, 2011).......
Public sector banks face acute manpower crisis
............ So severe is this issue that it prompted the Reserve Bank of India to call the 10 years to 2020 as the decade of retirement. In its 2010 report, the Khandewal Committee set up by the government to look into human resources issues in India’s banking industry outlined that over the following 2.5 years the percentage of staff reaching superannuation would reach alarming levels—80% at the general manager level, 65% at the deputy general manager level and 58% at the assistant general manager rank. This reflects a lack of human resource planning at these banks...........
KVG Bank solar lamp scheme to check school dropouts
To reduce the number of school dropouts in north Karnataka and to give the bank visibility in the region, Karnataka Vikas Grameena Bank (KVG Bank), a regional rural bank, has come up with a novel scheme styled Light for Homework. “The scheme is built on the lines of the Bisi-Oota (mid-day meal) programme run by the State government. Here, we give a solar lamp to a student in rural area to encourage studies,”.......
Beware! New virus steals bank account info and password
..........The malware, the advisory states, " steals credentials like file transfer protocol passwords, bank account logins, infects removable media, changes browser settings and downloads and executes arbitrary files". The virus is so deadly and potent, cyber sleuths say, that it has ability to hide itself from anti- virus solutions and acquires various aliases to attack a genuine system or Internet- based connection which works to play emails and other user services. The virus is such lethal in its operations that it " infects the removable media by copying itself to its recycle bin and creates an autorun. inf file," the advisory said........
A 25 bps rate cut on the cards
The previously hesitant Reserve Bank of India (RBI) Governor D.Subbarao looks set to deliver a third consecutive 25 basis points (bps) repo rate cut at the next meeting on 3 May. This is also very unlikely to represent the last such move with another couple of quarter point reductions set to follow before the end of the September quarter. For more than a year now, we have expected the repo rate to bottom at 6.75% in 2013 and see no reason to change that forecast.........
In the RBI’s interest
.................For India, the latest drop in commodity prices will offer a temporary balm to an economy battered by soaring prices and low growth for the most part of the last one year. Costlier crude oil, gold and other commodities had knocked up prices of most goods. It had also widened the current account deficit (CAD) to record levels. Lower commodity prices and a narrower CAD, therefore, make the job that much easier for the Reserve Bank of India to pare interest rates and for oil companies to cut retail fuel prices.
Dutch disease
.........This term was first coined and used by The Economist in 1977. Dutch disease is basically a condition when exports in one sector affects activity in other sectors; it is normally associated with new-found natural resources..........
Sebi giving final touches to anti-evasion pact with US
........While the Reserve Bank of India was earlier asked to prepare the draft Intergovernmental Agreement (IGA), Sebi is now seeking feedback from the market participants on the key changes required to be made in the draft, according to officials familiar with the development. These suggestions will be forwarded to the Centre for incorporation in the IGA............
TMC MP blames Centre, RBI for not acting against Saradha group
..."The Centre did not take action. RBI could have taken steps. But it did not act,..........
Read - ET
Read - ET
A dispassionate look at Ponzi schemes
.............. Better still, unlike banks, these schemes had no KYC (Know-Your-Customer) requirements; nor did they ask any pesky questions about the source of funds etc. This, no doubt, suited the large black economy flourishing in the country. Net result was you had all the ingredients of a financial scam in the making. In such a scenario, greater access to formal banking (read more bank licences, never mind that NONE of the new private banks has an extensive presence in the rural areas) is clearly not an answer. What about an omnibus financial sector regulator on the lines recommended by the recent FSLRC (Financial Sector Legislative Reforms Committee) report? Would that be an answer? ..................
Facing the music
Social networking takes people to new highs, but it can also be the source of all-time lows if the Facebooker concerned is caught out in a scandal...........
Saradha crisis: Mamata hikes VAT on tobacco for relief fund
...........Having said on Monday that “what has gone, has gone”, Banerjee on Wednesday announced a 10 percentage point hike in value-added tax (VAT) on tobacco products to raise money for a Rs.500 crore rescue fund. Either the consumer or the provider, or both, of tobacco products will pay for Banerjee’s largesse, which will be distributed among the worst affected by the demise of the Saradha Group, one of the biggest deposit-taking companies in West Bengal and its neighbouring states. It has already claimed two lives: an agent and a depositor killed themselves last week...........
Chits are not Cheats
Blame the RBI for the
repressed formal financial sector, making room for Saradhas to flourish
..........The relationship between the regulated and the unregulated parts of finance is not that between night and day, where the one is the obverse of the other. The RBI’s regulation is more like a tourniquet tied too long: it staunches the bleeding, all right, but it also cuts off blood supply to another part of the body, killing tissue and nerve.........
Mamata rejects oppn charge, sets up relief fund for Saradha investors
......Setting aside Rs 500 crore for those hit by the scam, Mamata assured the duped investors of the Saradha Group that they will be compensated, saying that the compensation will be partly funded by extra 10 percent tax on cigarettes. “Money will be given to small, medium investors affected by the scam,” Mamata assured. Questioning why didn’t the RBI and other central agencies act, Mamata said that action will be taken against the Trinamool Congress members if found guilty of any involvement in the chit fund scam. Defending the West Bengal Police, Mamata said that the police have already arrested two top officials of the company apart from Sudipto Sen....
Rs 4,000 cr at stake, SEBI asks Bengal to probe five more chit fund companies
.........."It is a pressure cooker bomb situation in Bengal now with scores of dubious financial institutions mushrooming and duping millions of investors with the lure of quick financial returns. One (Saradha) has gone bust, several other disasters are waiting to happen,"..........
How Saradha Group went belly up
........Why did the group fail? The causes of failure are not new. In 1975, a committee appointed by the Reserve Bank of India (RBI) and chaired by James Raj, former chairman of the erstwhile ICICI Ltd, analysed finance and chit fund companies in Delhi and found the following reasons, and a few others, behind their failure:..................
MMM India, another MLM taking people for “double-your-money” ride
......Two basic questions need to be answered. One, in the end who controls the 100 Mavros, or Rs5,000 that the member needs to keep in his virtual account? And second, if the idea of virtual money or mutual mutual aid fund is so great, then why the government or Reserve Bank of India (RBI) is not implementing this? Why such a great novel (!) idea needs to be sold through chain marketing route instead of customary marketing system that has served human society for thousands of years?.......
Govt asks banks to reach out to customers for Aadhaar-based DBT
.......In the latest directive, banks have been advised to issue advertisements in the local print and electronic media appealing account holders to open bank accounts and get Aadhaar seeded into it. Banks will also have to put up banners at their branches and ATMs with similar appeal. Pre-recorded messages will be sent from call centres to advise customers to open bank account and get Aadhaar seeded. Applications will be developed for collection of Aadhaar from customers through bulk SMS or e-mails. Banks will enable their ATM network to advise customers to seed Aadhaar..........
Axis Bank appoints KPMG for money laundering inquiry
......"KPMG is conducting an external investigation into the alleged money laundering case. We have moved 20 employees, who were allegedly involved, to the administration department (from their respective vertical). We have deactivated their employee IDs. All inquiries are already initiated. So far, we have not found any evidence of money laundering in the bank,"..........
RBI study finds 34 banks violating KYC norms
Mumbai: An ongoing study by the Reserve Bank of India (RBI) to verify charges of money laundering by banks has found several violations of know-your-customer (KYC) norms. This could have possibly aided tax evasion by customers, said an RBI official familiar with the study. The study covers 34 banks spanning the public and private sectors, including foreign banks in India, that are active in selling gold coins and wealth management products...........
RBI tells HDFC Bank not to make up its own KYC verification rules
.............HDFC Bank, which has been the subject of innumerable customer complaints about harassment to resubmit Know Your Customer (KYC) documentation, has been told by the regulator, Reserve Bank of India (RBI), not to demand a full re-submission unless there is a significant change in customer profile. Moneylife has received many complaintsfrom customers being harassed by the bank for re-submitting KYC details which have all been forwarded to Aditya Puri, the managing director. Initially, the bank took the stand that it was only following RBI directives on KYC and that continuous re-submission of details was also a global norm. ........
Redo your KYC if bank asks for it; it’s for your own good
......Normally banks create a customer profile based on details such as financial status, location, purpose for opening the account, the expected origin of the funds, employment and sources of wealth. When the transactions in the account are observed to be not consistent with the profile, the bank can ask for KYC documents...........
RBI scrutinising banks’ adherence to KYC norms in Bengal
............According to B. P. Kanungo, Regional Director (West Bengal and Sikkim), RBI, “We have conducted a scrutiny across several banks on a test-case basis on the behest of our central office. The report has been submitted to the central office,” Kanungo told newspersons on the sidelines of an interactive session on the Indian banking sector organised by the Bengal National Chamber of Commerce and Industry here on Wednesday...........
Ekla Chalo Re: Chidambaram soldiers on despite challenges
............Perhaps the greatest challenge Chidambaram will continue to face will be that of political will from the UPA, given the current political turmoil and the compulsions it will bring. To that extent, despite RBI chipping in with rate cuts and the overall macro indicators turning that wee bit favorable, Chidambaram will still be walking alone.
Mr Bernanke's glasnost
.......Central banks globally seem to have realised that drafting and pursuing monetary policy in utter secrecy - a strategy pursued even by governors in the Reserve Bank of India, or RBI, till a few years ago - can actually be counterproductive, especially in asset markets sensitive to interest rates. These developments might have prompted Federal Reserve Chairman Ben S Bernanke to embark on a unique communication exercise...............
Huff, puff, India will finally be a $2 trillion economy this year
......... “The next decade will be a crucial decade for India. If we grow at 8-9 percent per annum, we will graduate to the level of a middle-income country by 2025. It is once again a faster rate of growth which will enable us to meet many of our important socio-economic objectives.”........
RBI proposes escrow mechanism to route FDI
..........."There have been cases of receipt of remittances for issuance of share capital and return of the investor's money before the expiry of the 180 days without issuance of shares. This by passes the FDI/ECB guidelines," sources said. The RBI argued that the misuse can be checked if usage of money is allowed only after issuance of shares. They said that the RBI's proposal would help in protecting the foreign investor as "he becomes entitled for a say in the management only once the shares are issued".......
Large firms may be asked to raise 10% of working capital from bond market
....The RBI’s proposal on working capital is aimed at developing the corporate bond market and ensuring credit discipline among large companies, say bankers. Moreover, once large companies diversify their sources of working capital finance, banks will be able to step up flow of credit to the micro, small and medium enterprises...........
Better CAD in FY14 if we act, says council
........This projection of CAD for 2013-14 is optimistic compared to that of the International Monetary Fund, which pegged it at 4.9 per cent. In its Review of the Economy 2012-13, the council asked the government to contain gold, oil and coal imports to rein in the rising CAD. According to the latest Reserve Bank of India data, the CAD rose to a record 5.4 per cent of GDP in the first nine months of 2012-13, against 4.1 per cent in the corresponding period of 2011-12........
US may soon get a leash on Indian financial institutions
.....While the Reserve Bank of India (RBI) was earlier asked to prepare the draft IGA, Sebi has now sought feedback from market participants on the key changes required to be made in the draft. These suggestions will be forwarded to the Centre for incorporation in IGA.............
IMD forecast not reliable: Vikhe-Patil
.........The state government recently held a meeting in Mumbai with the officials of Bank of Maharashtra, the convenor of the state level bankers' committee. The government has decided to set up a branch of public sector banks in every village having minimum population of 5,000. Such villages are mostly in Marathwada and Vidarbha regions where currently no branch of a public or private sector bank is functioning. "Many district central cooperative banks are not functioning, so these banks can be helpful. The initiative has received in-principal approval from the Reserve Bank of India. The public sector bank will disburse close to 40% of the total credit flow in the state,"......
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