Friday, July 31, 2015

How Much Chit Fund Companies Have Looted?

Press Information Bureau
Government of India
Ministry of Corporate Affairs
31-July-2015 16:34 IST
Cases of Corporate Frauds/Chit Fund Scams Involving Companies

The Ministry, during the last three years and current year, has ordered investigation into the affairs of 145 companies which were allegedly involved in illegal deposit taking activities. A State-wise list of these companies is enclosed as Annexure. In many of the cases where investigations have been completed, diversion of funds so collected and/ or default by the companies in repayment of such deposits has been observed.
Regulation of such activities is covered by the following statutes:
i. Chit Funds Act, 1982, under which all chit funds require previous sanction from the respective State Governments.
ii. Prize Chits& Money Circulation Schemes (Banning) Act, 1978, enforcement of which lies with State Governments, defines and prohibits illegal chit fund schemes.
iii. RBI Act, 1934, administered by the Reserve Bank of India, bars any individual or a firm or unincorporated association of individuals from accepting deposits.
iv. SEBI Act, 1992, administered by the Securities and Exchange Board of India, to regulate Collective Investment Schemes.
v. Companies Act, 2013 (Sections 73 to 76) read with Companies (Acceptance of Deposit) Rules, 2014.
vi. Special legislations passed by certain States to protect the interests of depositors.
Apart from enforcement of the above statutes and regulations, the following measures have been taken to protect the interests of the investors and to enable effective investigation into the affairs of companies allegedly involved in frauds:
(i) ‘Fraud’ has been defined as a substantive offence in the Companies Act, 2013;
(ii) Section 143(12) of Companies Act, 2013 requires the auditor of a company to report any fraud to the Board of Directors or Audit Committee of that company or to the Central Government, depending on the amount of fraud.
Year 2012-13
Name of the Company
State/ UT
Suspected Quantum
Basil International Ltd.
Vamshi Chemicals Ltd.
Nixil Pharmaceuticals Specialities Ltd.
Appeline Cosmetics & Toiletries Ltd.
Basil Express Ltd.
Delhi & UP
Rs 1721.00 crore
Unigateway 2U Trading Pvt. Ltd.;
Unipay2U Marketing Pvt. Ltd;
Unipay Creative Business Pvt. Ltd.;
Unipay2U Production Pvt. Ltd.
Tamil Nadu
Rs 791.53 crore
Alchemist Infra Realty Ltd.
Not available
Speakasia Online Pte Ltd. (Singapore)
Rs 3494.00 crore
Tulsiyat Tek Pvt. Ltd.    
Seamless Outsourcing LLP
Year 2013-14
Rose Valley Real Estate & Construction Ltd.
Rose Valley Industries Ltd.
Silver Valley Communications Ltd.
Rose Valley Food Beverages Ltd.
Rose Valley Marketing India Ltd.
Rose Valley Infotech Pvt. Ltd.
Rose Valley Hotels & Entertainment Ltd.
Rose Valley Projects Ltd.
Rose Valley Patrika Ltd.
Rose Valley Films Ltd.
Modern Investment Traders Pvt. Ltd
Rose Valley Travels Pvt. Ltd.
Brand Value Communications Ltd.
Rose Valley Housing Development Finance Corporation Ltd.
Rose Valley Airlines Ltd.
Rose Valley Fashions Pvt. Ltd.
Rupasi Bangla Projects India Ltd.
Rupasi Bangla Media & Entertainment Ltd.
Rose Valley Realcom Ltd.
West Bengal
Rs 10281.00 crore
URO Hotels and Resorts India Ltd.    
URO Hygienic Foods Ltd.
URO Infotech Ltd.
URO Lifecare Ltd.
URO Trexim Ltd.
URO Autotech Ltd.
URO Agro India Ltd.
URO Walkers Ltd.
Year 2014-15
79. Mangalam Agro Products Ltd.
West Bengal
Not available
80. Ramel Industries Ltd.
Gan Laboratory Pvt. Ltd.
Ramel Mart Pvt. Ltd.
Ramel Media and Advertising Pvt. Ltd.
Ramel Real Estate and Infrastructure Ltd.
Ramel Sea Food Ltd.
Tamanna IT Solutions Ltd.
Ramel Pharma Ltd.
Ramel Hospitality Pvt. Ltd.
Ramel Infotech Pvt. Ltd.
Ramel Agrotech Ltd.
Ramel Hotel & Resorts Pvt. Ltd.
Ramel Impex Pvt. Ltd.
Ramel Insurance Agency Pvt. Ltd.
Cygnus Publishers Ltd.
Ramel Bio Fertilizer Pvt. Ltd.
West Bengal
Not available
96. Rahul Hi Rise Ltd
West Bengal
Not available
97. Shrishti Abha Food & Beverage Pvt. Ltd.
98. Rahull Media & Entertainment Ltd.
99. Rahul Wood Works Pvt. Ltd.
100. Veekayen Properties Pvt. Ltd.
101. Hotel Sea-Coast Pvt. Ltd.
102. Rahul Bhumi Vikas Ltd.
103. Rahul Heights Ltd.
104. Rahul Real Estate Projects Ltd.
105. Rahul Inn Hospitality Ltd.
106. Ideas Realcon Ltd.
107. Ideas Real Estate Ltd.
108. Ideas Healthcare Ltd.
109. Ideas Broking Ltd.
110. Zenix Technologies Pvt. Ltd.
111. Adventus Creations PVt. Ltd.
112. Seashore Securities Ltd.
Not available
113. Seashore Agriculture Promotion Company Pvt. Ltd.
114. Seashore Healthcare Pvt. Ltd.
115. Seashore Pharmaceuticals Pvt. Ltd.
116. Seashore Courier & Cargo Private Ltd.
117. Seashore Diary Products Pvt. Ltd
118. Seashore Portfolio Management Services Ltd.
119. Seashore Consultancy & Construction Private Ltd.
120. Falcon Consultancy Private Limited
121. Royal Purple Hotels Private Limited
122. Sagiarien Systems Private Ltd
123. Florance Biotech Private Limited
124. Saubhagya Drinks Private Limited
125. Sri Krishna Agriculture Pvt. Ltd.
126. Jatish Agro and Oil Products Pvt. Ltd.
127. Sagar Media & Entertainment Pvt. Ltd.
128. Seashore Capital Pvt. Ltd.
129. Seashore Shipping Company Pvt. Ltd.
Year 2015-16
130. Saradha Housing Pvt. Ltd.
West Bengal
Not available
131. Ambujaatripuri Infra (India) Ltd.
Not available
132. Ambujaatripuri Business Private Ltd.
133. Artha Tatwa Consultancy Private Ltd.
134. Artha Tatwa World Ventures Private Ltd.
135. Artha Tatwa Food Mart Private Ltd.
136. Artha Tatwa Capital Limited
137. Ambujaatripuri Engineering Private Limited
138. Orisha Health & Medical Research Institute
139. Helios and Matheson Information Technologies Ltd.
Tamil Nadu
Not available
140. Grand Vyapaar Private Ltd.
West Bengal
Not available
141. Ultra Tie-up Pvt. Ltd.
142. Happy Tie-up Ltd.
143. Saphire Infradeveloper Pvt. Ltd.
144. Best Tie-up Ltd.
145. Sahu Land Developers Pvt. Ltd.
This information was given by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha today.
Bottom of Form 1

Tuesday, July 28, 2015

Health Of Public Sector Banks

Government now think that timely promotion to employees is Oxygen for growth -Read this news below

If Position of law and order of any town or state or a country is assessed and ascertained by statistics of crime lodged in the register of police stations or that at Central Bureau of Investigation, it will give misleading conclusion. If level of corruption in any state or in our country is judged by quality and quantity of corruption ralated cases registered with Anti-corruption bureau or CBI or Police or court of law, it will definitely lead us to wrong conclusion. This is because , in our country people do not want to lodge complain or/and police officials do not want to register cases in their books . Police officials torture person who come for lodgement of any complain and if lodged they do not submit genuine report after investigation till they are bribed adequately.

The bitter truth is that if they register all cases honestly , they will have to work more and they will need more and more manpower equipped with infrastructure and arms and ammunition to cope with gigantic task of controlling ever rising crime in the society . In addition to that , it is also true that politicians who rule the state or the country do not want crime graph to rise in books of police . Because if crime statistics grow in volume ,it will tell upon their political career, they think so. They build pressure on police and administrative officials to lodge minimum complain . They cannot build a society and a system where crime will be minimum by creating a fear of law but it is easier for them to ensure that occurrence of crime is not registered in books so that they may at least falsely claim peace in their area.

But the bitter truth is that winnability of any leader does not depend on crime statistics of police or court or CBI or what a politicians claim in a public rally before election, but it solely depends on public perception about law and order situation in that area. People of that area know very well how police department or judiciary functions. Voters who live in the area for 365 days in a year know very well whether there is social security or not, whether police are interested in protecting lives of residents or not and whether they will get help from police in bringing criminals to task. When they feel there is no gain in telling police and rather there is mental and financial loss, it is comfortable for them not to lodge FIR in police and better to bear with injustice .

One more truth is that if any police officer or official working against corruption is rigid to arrest the real culprit to stop crime and corruption, he has to face torturous transfers, humiliation in meetings and finally rejection in promotion processes and loss various incentives in career . To add fuel to fire , corrupt and flatterer officials are elevated which further results in creation of atmosphere which is not at all conducive for crime control and which cannot provide protection to citizen victim of criminals.

Similarly , one cannot judge the performance of any bank merely based on balance sheets published in news papers or put in public domain. Balance sheet figures are manipulated figures in many respect just as it happened in case of Satyam Computers. Game of window dressing or manipulation in financial statement has become the culture of not only banks but all companies and all traders.

Volume of bad debts (Non performing Assets and restructured assets ) are not true and correct what appears in declared balance sheet and profit is not truly the same as it is reflected in audited balance sheet. It is observed that after the implementation of Core Banking Solutions in Pubic sector Banks, volume of NPA has gone up from Rs.40000 crore to almost Rs.10.00 lac crore despite the fact that Government , RBI and Chief of every bank use to claim from time to time that Volume of NPA is strictly in their control and they promise to reduce the same in next quarter. Bitter and undeniable truth is that ,every quarter or alternate quarter , the Chiefs of bank add huge NPA in their books, write off huge volume of bad loans , sacrifice huge amount of public money to please defaulting borrowers , incus huge loss in frauds , but they continue promise to reduce the loss in succeeding quarters. Things will never move in positive direction unless and until corrective steps are taken from grass root level and the genuine reason for sickness is detected and diagnosed.

This dirty culture in banks is because , internal auditors or statutory auditors are not allowed to increase NPA or expose all Hidden NPA in one quarter . There is verbal instructions to all internal auditors not to expose hidden bad debts and not to rate any branch below average rating. Similarly Statutory auditors are supposed to certify balance sheets of branches they audit without any objection or accept what is desired to be accepted by senior officials of the bank. CAs may get all unfair awards to accept what is directed by bank bosses and to conceal all bad points .

If any of them objects and ask for modification in categorisation of assets, they are to loose the business in coming years or face torture if they are internal auditors. These auditors are not given adequate time and manpower support so that they may not go deep into the system. Auditors are supposed to complete audit of big branches in 2 to 3 days and hence they think it safe and comfortable to certify the BS as it is prepared by branch officials. It is a deep rooted conspiracy in all offices including all banks to keep the department of audit , vigilance and monitoring bodies weak in all respects.

Rating agencies are not allowed to rate any company below average. Majority of rating agencies are having tie up with PSBs. If they rate below investment grade, bank will discard such rating agency and choose other rating agency who charge less amount but give better rating to a company and this is also because promoters of company also like rating agency only when they are able to get additional finance and only bank allows hassle free credit to them. As such it is a win -win position for bank officials , company promoters, government officials, politicians and auditors if a company is rated better despite many shortcomings , deficiencies and irregularities in the system. In modern era, auditors ask corporate house how much credit they want to take from banks before finalising a balance sheet . They will frame the financial statement in such a way that bank officials find all financial ratio fit for sanction of addition or new loans. Bank officials also work in nexus with such auditors in many cases.

Bank officials do not want to treat any borrower as wilful defaulter or even simple defaulter because it will expose his evil work or the malicious intention of some of his predecessors who sanctioned loan with negligence or with bad intention of earning money from unfair means. This is why no action is initiated against wilful defaulting companies for years together. Bad accounts are therefore kept in safe mode by restructuring or ever greening of loans. Bank officials teach borrowers how to get higher loan and how to get rid of account slipping into NPA category in the same way Income tax officials with the help of middlemen teach tax evaders how to file Income Tax returns. Guys working for Rating agencies or ISO certification body guide bad companies how to fabricate books and how to get good rating and ISO certification in lieu of some gifts.

Banks are considered healthy if a certificate is issued by Chief of the bank. Corporates and traders are considered safe for lending if they are able to get good health certificates from auditors, rating agencies and credit officials. In our country officers who are corrupt and unclean are requested to submit certificate of good health every quarter in case of all borrowers and all accounts as if Thief are advised to give in writing that act of stealing or robbery did not take place . Officers who are champion in bad lending or in bribe based lending are made auditors or vigilance officer. Or else officer who do not have enough knowledge of banking are appointed and posted as auditors or Risk Mitigating Officers. Munsi Prem Chand rightly wrote in his book that if protectors are damagers and looters, none can stop destruction and disaster. " Jab rakshak hi bhakshak ban jaye to vinas nischit hai"

Likewise , corrupt officials are made members of Interview panel who picks up only corrupt officer for promotion to higher scale or higher level. If an honest officer appears in interview, such members will ask such questions to him which he or she cannot answer. The great fun is that there is no record of interview and hence even if the honest officers replies questions of Interview panel members, he is given lesser marks compared to bad officers who fail to answer any question. I do not know what is need of Interview for promotion and what is tested in two to three minutes of interview when the bank and boss of any office could not assess an officer in two to three decades of his or her real working and well recorded quality of service. Conspiracy behind system of interview is to reject officers of quality and choose officers as per whims and fancies of bosses. This promotes a culture of flattery and bribery and it has damaged the quality of services extended by bank as also quality of assets possessed by banks in public sector . Employees of two to three decades of good service do not elevation in career whereas employees of two to three years service get promotion every time. This has resulted in an atmosphere where good workers do not take part in promotion process and bad officers apply all tools to reach the top position. Outcome is that people are not loyal to bank they serve but they are loyal to only bosses under whom they work.

In our country police officers or administrative officials whose track record is full of corruption and who have been charged of various irregularities are given the responsibility of heading Anti Corruption Bureau in a state or a district body or in a bank.

In railways , all food items supplied in train are invariably of inferior quality because contrators who are given the task of providing food items in running train are to share huge money of their contract value as bribe to officials at various levels. If any passenger lodge complains to competent body or official, he or she is rebuked and tortured . If he chooses to lodge his grievance at Grievance redressal cell, such complains are removed from the system or a stereo type reply is sent to complainant. Even mineral water sold in trains or on platforms are not pure and distilled all the time . New or used Bottles are purchased and impure water is filled up and sealed to sell in running train at premium price . Water which should be made available in Free India is sold at a price of Rs. 20 to Rs.50 per bottle depending upon the demand of water. There is none to check quality of food or water sold either in Railways or elsewhere. It is God who help passenger or take the life of passenger.

Most of drugs and medicine are highly priced compared to generic medicines . But there is none to stop such exploitation by doctors, traders and multi national companies with the support of thousands of sales man and continuous marketing through advertisement. Government hospitals have almost stopped functioning and only death bodies or persons who met accident are taken there for post mortem or for getting an authentic and favourable police report to avoid police action. Similarly medicines are purchased on registers and consumed on registers to earn money by corrupt officials of hospitals run by Government. In public utility department like PWD, REO , Health , minerals etc, majority of payments are released from government exchequer by submitting fake bills or false certificates by engineers or inspectors assigning the duty of certifying the completion of work with quality.

There is a rule that all medicine shop must have on medicine practitioner sitted in their shop. But drug inspectors in general issue permission , say license for starting medicine shop by keeping in record false and fabricated Bio data of a Doctor in record for record purpose. Doctors also sell their certificate to earn a fixed monthly income from such traders. Shop owner buys not only Drug inspectors but also doctors to run a shop and also to sell fake medicines or to practise as Doctor in Shop. Doctors posted in Government run hospitals in villages or in small towns more often than not, perform their duty only by signing on attendance roll and do their private practice keeping some staff in good book.

Similarly government run schools in villages and small towns in general and partially in big towns too are run on registers. Teachers attend schools o registers and students are enrolled and taught only on registers . Students are passed by allowing them to write taking help of books or some other students write on behalf of enrolled student or marks are given without the need of student sitting and writing for examination. You may say in brief , that there are many primary or middle or higher studies schools whose work is to sell degrees only. Teachings and examination are well directed and concocted dramas and people act in a very system manner and well coordinated manner to cheat the system and to favour to a person who is ready to buy a false certificate. Even many engineering and medical colleges arrange for better marks on payment of some money. This is India where quality of a person is ascertained based on marks obtained in examination. This is India where every certificate and degree is purchasable commodity.

In seventies , banks used to sanction loan to needy and credit worthy persons only after making a lot of market enquiries and due diligence. Loan seekers had to prove their credentials , ability to do business and repay the loan in time .Bankers had upper hand in sanctioning of loan. In case of default , borrowers had a fear in mind that he will have to go to jail if banks file case in court of law and at least his peace will be disturbed. Cases of default or that of fraud used to be minimum. But politicians for the sake of vote bank totally changed the equation and work culture in bank. Now loan seekers and loan defaulters have a upper hand and position of bank officials empowered to sanction loan have become pathetic. Bank officials may face dirty and uncomfortable consequences if they do not achieve the target allotted by higher bosses for growth in advances. They have to write off loan or compromise with borrowers even the default is wilful and ill-motivated.

Quality of lending in not at all insisted b seniors sitting at top. Even if loan comes in default category, there is no one to question. Even borrower is not afraid of any punitive action if he or she defaults in making repayment of loan in time. Rather defaulters will complain to government offices or blackmail with officers for compromise settlement or threaten not to repay any amount , come what may. Because defaulters know it very well that bank officials are under pressure to reduce NPA by hook or by crook. In such position it is better, peace oriented and comfortable proposition for a bank officer to sanction loan and earn bribe too, to write off loan or to sanction compromise settlement with huge sacrifice of bank's money and earn blessings of boss and borrower too. Bank officials now do not want to treat a bad loan account as NPA because it will add to their agony and they will face many types of tortures from their bosses.

During the period of emergency imposed by the then Prime Minister Indira Gandhi , there used to be time bound target for each teacher and each government staff and officials for family planning. As a result many forceful family planning took place and even unmarried persons used to be operated to achieve the target. Or staff under pressure of target used to achieve the target by operating fake persons which means even non-existent or already operated person used to be taken to their books to show and prove their achievement of target.

Similarly bank officials opened 15 crore bank accounts in less than a year which they did not open in last two or three decades. This is the outcome of imposed target . Same thing happened with issue of Voter card or Aadhar car . Many voters have got success in getting more than one voter card and more than one aadhar card. Similarly many persons have many accounts in many banks. Quality of opening of account or issue of insurance or sanction of overdraft does not have any improvement. This is why cases of fraud and loss due to fraud has been increasing year after year. Amount involved in bank fraud have gone up from roughly Rs.1100 crore in the year 11-12 to Rs.11000 crore in the year 14-15 . Loans are sanctioned by credit officials or sanctioning authority only to achieve the target and to get untimely and quicker promotion as also to get the opportunity to earn money through unfair means. This is the reason that volume of bad debts have gone by from a few thousands of crores of ruppes to ten lac crore of ruppes during last decade.

Bankers say that if they are not positive, growth of bank will stop and GDP of entire country will come down. They blackmail with government or government blackmail with bankers , both are possible , in the same way as black money holders use black route of P-notes to convert black money to white money and channelize black money to stock market through some tax-liberal countries like Malasia, Hongkong and Singapore. Such king in black money blackmails with the government that if they are trapped or taxed , they will crush the stock market and people of India who are invested in various shares will start crying and finally spoil the future of the ruling party. This is why none of government of last three decades could stop use of P-notes in stock market. Harshad Mehta and Ketan Parekh might have died after committing fraud with the share market but they have taught lesson to many FIIs and domestic players in stock market how to cheat the financial system.

Bad debts in public sector banks is on continuous rise. There are many reasons for a loan to become NPA and many reasons for failure of bankers in getting repayment from defaulters. Reasons are internal, external, administrative political, legal and several others. But in most of cases ,outside reasons and ingenuine reasons are wilfully and strategically assigned by bankers for rise in volume of bad debts in books of PSBs, even if there is default in loan due to wrong lending , bribe based lending or lending to unscrupulous persons in nexus with bank officials or under pressure of local muscle men or political masters. Reasons attributed for rise in defaults are not always genuine reason like failure in business, or failure machines or death of promoters or due to inadequate capital or undue price rise in cost of raw materials.

It has become fashion to put blame on global recession or economic recession or higher interest rate or delay in clearance of project etc. Reason which are beyond human control are generally attributed for rise in bad debts. Obviously when doctors fail to detect actual cause of disease, it is sure that the diagnosis prescribed by Doctor will be misdirected and may take the life of the patient. Doctors nowadays willingly delay the process of curing the patient to earn money through unwarranted pathological tests, use of ICUs or ventilators or through unwarranted surgical operations on patients. In the same way bankers also delay the identification of bad debts.

Similarly bank officers delay the process of treating a account as bad so that actual culprit behind sanction of loan or responsible for monitoring of loan is safely retired or promoted. People in general have the tendency first to save their colleagues than to save the bank they serve. Auditor or Vigilance officers or senior visiting officers all try to change the facts in such a way and frame a report in such a way that actual culprit gets exonerated from all charges. None is interested in safety of bank and this is why PSBs are moving from good to bad, and bad to worse whereas private banks are booking higher and higher business, higher and higher profits and lesser and lesser NPA. In the same legal set up and administrative set up have become almost defunct. Cases in courts are not decided in decades. Banks have to spend good money in recovery of bad money. Politicians also do not want good health of public sector banks , they want their vote bank to become more powerful and permanent.

What is right and what is wrong , I cannot say , but it is true that health of all government departments is not satisfactory and none of officials and politicians are really interested to cure the system . Corrective plans are made, guidelines are issued, rule of laws are changed to accommodate to change the outer look of the patient or ailing bank. But the actual sickness continues not only in banks but in all PSUs and government offices.

Public sector banks Q1 show disappoints-The Hindu-28 July 2015

Four public sector banks today reported a decline in their net profits, reflecting the difficult conditions they face amid an economic slowdown and rising bad loans.
Net profit of Bank of India (BoI), Punjab National Bank (PNB), Union Bank of India and Syndicate Bank dropped during the first quarter ended June.
As I have been writing in my blogs that no power can stop public sector banks from increase and continuous increase in volume of Non Performing assets. The performance of public sector bank majors such as Punjab National Bank, Union Bank of India, Bank of India and Syndicate Bank for the first quarter ended June, 2015 has disappointed bankers ,stock market, investors and the analysts alike.

Bank of India

Bank of India has posted a net profit of Rs.130 crore for the quarter ended June 30, which was down by 84 percent from a year ago in the same period.
The net interest income of the bank stood at RS 2,913 crore, while non-interest income was at Rs.840 crore as on June 30, 2015.
Bank of India’s retail advances grew 20.69 per cent as the total domestic advances increased from Rs.2,62,874 crore in June 2014 to Rs 2,80,986 crore in June 2015.
CASA deposits increased from Rs.1,05,589 crore in June 2014 to Rs.1,15,737 crore in June 2015, a year-on-year growth of 9.61 per cent.
Savings deposits increased from Rs.85,815 crore in June 2014 to Rs.96,361 crore in June 2015, an year-on-year growth of 12.29 per cent.
The Gross NPA ratio stood at 6.80 per cent in June 2015 against 5.39 per cent in March 2015. Net NPA ratio stood at 4.11 per cent in June 2015 against 3.36 per cent in March 2015. Provision Coverage Ratio stood at 52.15 per cent.
“Despite optimism, Indian economy is still not out of stress…five sectors, infrastructure, mining, power, iron and steel, continue to account for over 40 per cent of the total stressed assets,” said B. P. Sharma, Managing Director and CEO, Bank of India.
“This quarter, the recovery was not as expected,” Mr. Sharma added. He said that the focus now would be on recovery and merit-based restructuring and would be stringent on risky accounts. “Slippage will be there going forward but the rate of slippage will come down,” said Mr. Sharma.
Union Bank of India

Union Bank of India reported a net profit of Rs.519 crore for the first quarter ended June 30, 2015 compared to Rs.664 crore a year ago.
Domestic Net Interest Margin (NIM) stood at 2.46 per cent for April-June 2015 compared to 2.68 per cent a year ago. Net Interest Income for April-June 2015 was at Rs.2,130 crore compared to Rs.2,117 crore in April-June 2014. Non Interest Income stood at Rs.783 crore, up 13 per cent over a year ago.
Gross NPAs stood at 5.53 per cent as on June 30, 2015 against 4.08 per cent as on June 30, 2014. Net NPA ratio is at 3.08 per cent as on June 30, 2015against 2.46 per cent as on June 30, 2014.
Punjab National Bank

Punjab National Bank (PNB) posted a 48.7 per cent plunge in its first quarter net profit at Rs.721 crore, dragged down by higher bad loan provisioning and subdued credit growth.
The bank’s net profit for the June quarter a year ago stood at Rs.1,405 crore, it said in a statement.
The gross non-performing assets (NPAs) have increased to Rs.25,397 crore in the June quarter against Rs.19,603 crore in the same period last year, the statement said.
The gross NPAs of the bank as a percentage of total advances rose to 6.47 per cent during the April-June quarter, compared with 5.48 per cent in the year-ago period.
The bank’s provisioning during the June quarter rose to Rs.1,811 crore, from Rs.928 crore in the corresponding period last fiscal.
Interest income of the bank rose to Rs.12,035 crore during the first quarter, up nearly 4 per cent from Rs.11,589 crore in the corresponding three months period of 2014-15.
Total income of the bank rose to Rs.13,432 crore in the June quarter, from Rs.12,825 crore in the same period previous fiscal.
The bank also said that it had reported to the Reserve Bank 400 ‘wilful defaulters’, and plans to sell non-performing assets (NPAs) worth up to Rs.3,000 crore to Asset Reconstruction Companies (ARCs) in the current fiscal.
Syndicate Bank

Syndicate Bank witnessed a 38 per cent dip in its net profit for the first quarter ended June 30, 2015 due to higher tax expense.
The bank’s net profit stood at Rs.301.98 crore in Q1 against Rs.485 crore during the same period last year. Total income stood at Rs.6,323.42 crore against Rs.5,523 crore, a growth of 14 per cent.
Tax expense was Rs.256.75 crore, a 323 per cent increase, against Rs.60.64 crore.
Gross non-performing asset (NPA) ratio stood at 3.72 per cent in Q1 against 2.97 per cent last year, the company said in a filing to BSE. The net NPA (non-performing asset) ratio of the lender stood at 2.36 per cent against 1.88 per cent the year-ago period.
During the period under reference, the net interest income increased to Rs.1,412 crore from Rs.1,351 crore.
In the regulatory filing, the bank also said it had taken shareholders’ approval to raise equity capital up to Rs.2,000 crore to augment its capital base.
The Telegraph newspaper presents following Table to depict quarterly results of public sector bank at a glance.

Kanpur bank credits billions in housemaid’s a/c-Times of India

In a strange quirk of fate, a domestic help living in a city slum become the richest woman on the planet on Friday, when billions of rupees were transferred to her bank account mistakenly by a public sector bank. Her euphoria, however, was short-lived when the bank froze her account after realizing the mistake.

The incident happened with a domestic help, Urmila Yadav, who lives in Madarpur slum in Vikasnagar area of the city. "I have my account at the Vikas Nagar UPSIDC branch of State Bank of India. I got the shock of my life on Friday when I accessed my bank passbook to check the balance," she told TOI.

"On July 24, my guarantor Lalta Prasad handed me my SBI passbook. I was shocked to see that an amount of 'Rs 95711698647130' was credited to my savings bank account. After finding such a huge amount entered in my passbook, I immediately went to the bank with my guarantor. To my surprise, the computer at the bank also showed the same amount of 'Rs 95711698647130' in my account," said Urmila in his early 30s while talking to TOI.

Stunned over the development, the bank officials immediately apprised their seniors who in turn froze the account. Rakesh Kumar Khatri, manager of the SBI branch where Urmila maintains the account, confirmed the development and said that the bank has withdrawn the money from Urmila Yadav's account.

"We will check how this happened and who made the blunder," said Khatri. "The bank has now activated Urmila's account after rectifying the error. The computer data is now displaying the correct balance of Rs 2,000 in her saving account," he added.

"Now, they have deleted everything and there is no such record of the episode in my account statement," Urmila said, adding that the only proof she had of her fleeting wealth lies in printouts and bank statements.

"On June 23, I had opened a savings account under Prime Minister's Jan Dhan Yojna by depositing Rs 1,000 with the SBI's UPSIDC branch in Vikas Nagar. Similarly, on June 30, I further deposited a sum of Rs 1000 in the account. Now, this is what all remains with me," she said.

Govt for timely promotions in services, says Dr. Jitendra Singh
Government is in favour of timely promotions in services and the Department of Personnel & Training (DoPT) is constantly working on ways and means to overcome delay in providing various benefits to employees.

This was stated here today by Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, Dr Jitendra Singh, when a deputation of Central Secretariat Stenographers’ Service (CSSS) Association of Private Secretaries called on him at his North Block office.

The deputation, led by Shri Sushil Sachdeva, handed over a memorandum to Dr Jitendra Singh and said that after having put in as many as 20 to 30 years of service, the only expectation is that they would get some reward by way of timely elevation, but when this is denied, they lose the initiative to work and feel demoralised. They also complained that their agony becomes more acute when they see that their counterparts in parallel services get promoted faster and some of them become senior to them. This also affects pensionary benefits that they are entitled to receive at the time of superannuation.

The deputation leader also said that Dr Jitendra Singh is known as a Minister with highly positive and pro-employee approach and therefore, they have come to him with a great hope.

Dr Jitendra Singh gave them a patient hearing and said that various demands and grievances put up by the Association will be placed for consideration at appropriate level. He said, the Modi Government is committed to provide ‘Maximum Governance with Minimum Government’ and has adopted several radical measures to simplify governance and provide a comfortable as well as work-friendly environment for officials. It is in the same spirit that officials of different Services are also intended to be made comfortable and ensured a sense of esteem through timely promotions and befitting status in their service career, he added.

Prominent among the other members of the deputation who met the Minister were Dimple Kapoor, Girish Kumar, Alok Kumar and M.S. Rawat.

Sunday, July 26, 2015

Denial Of Loan Is Crime ?

Stop filing FIRs against bank managers for not sanctioning farm loans: Finance Ministry -
Economic Times 23rd July 2015

Click Here to read How BM suspended for not sanctioning Loan
MUMBAI: The Union finance ministry has written to the Maharashtra government, directing it to stop filing FIRs (first information report) against bank managers of nationalised banks who didn't sanction loans to farmers.

The finance ministry's letter terms the state government's move as "catastrophic", and warned that it could have "unintended consequences".

The letter, a copy of which is with ET, has been written by Hasmukh Adhia, Secretary in the Ministry of Finance, Department of Financial Services, on July 8 to Maharashtra chief secretary Swadheen Kshatriya.

Read more at:

'Don't compel banks to give farm loans', Central govt tells Maharashtra - Midday

In an embarrassment to the ruling BJP-Shiv Sena combine in Maharashtra, the central government has written to the state asking it to desist from compelling banks to extend farm credit, official sources here said on Wednesday.

The letter, dated July 8, has been sent by union Finance Secretary Hasmukh Adhia to state chief secretary S. Kshatriya - barely a couple of days after Maharashtra Chief Minister Devendra Fadnavis warned that bank managers who do not extend farm credit would be prosecuted.

See more at:

Govt will have to act if banks refuse loans to eligible farmers: CM Devendra Fadnavis

My Observation are as follows

In the history of bank, I think it will be the first time that a Bank Manager is suspended only because he did not sanction a loan as per wishes of politician, and that too at the instance of a government official.

This incident is not a small one, it should be treated as alarm bell not only for bank officials but for survival of banks too. And this incident is not also unanticipated and unexpected. Government of Maharashtra has already issued warning in the last month that if bankers do not sanction crop loan , FIR will be lodged in police station against them. Trade Union leaders thought it better to keep mum and they did not react at all.

 In olden days Minister like Janardan Pujari used to build pressure on Banks to organise Loan Melas and disburse loan to farmers, traders and others as per sweet will of Block officials and district administration. Bank officials who remained behind target for loan under government scheme or who did not want to sanction loan as per will of politicians used to be transferred to different places and used to be punished in promotion processes.Transfer powers are used in banks as well as in government offices as weapon to kill an officer who do not follow top officials blindly. Trade Union leaders joined hands with corrupt top officials and allowed exploitation of their members .

As a result of this undue pressure on lending , bank officials willingly or unwillingly learnt to oblige politicians and government officials even at the cost of quality of loan . Because it was after all a question of safety of service with respect and do called dignity. Some of officials while working in cooperation with government officials also learnt how to earn bribe and commission in sanctioning of loans under government schemes. This is called  "To kill two birds in one stone". In villages, it is called as "Aam Ka Aam Ghutli Ka Dam' Bank officers thought it better to earn money for self by obliging top bosses .

Not only this , in second phase politicians like Devi Lal and VP Singh built pressure on banks to write off of loans. As a result , it became easier for corrupt bankers and corrupt government officials to sanction loan blindly to serve their dual but evil motive of earning bribe and achieving set targets. This is because , they became sure that even if they sanction loans to bad persons or fake persons, they or their colleagues in next few years will get an opportunity to write off such loans . IN this way , all proofs of bad lending will be finished for ever. Borrowers too are well aware of this culture. They know the art of taking loan from bank and then the art of  building  pressure through local leaders for writing off of loans.

Then came Minister like Chidambram who was not a small player but a big and giant player. He was well aware that political leaders of his party used to build pressure on bank officials to sanction loans to farmers, traders and industrialist. He was right in thinking that  he can earn vote bank by forcing bankers to sanction smaller loans to villagers and by writing off small loan he can further make his future brighter , He took a step forward by forcing banks to lend to big corporate houses in hundreds and thousands of crores of rupees so that not only  he himself can earn huge money as gift from these corporate houses , but his party can also get political fund from corporate houses as a award. He thought to become invincible and he had a dream that his party will win the heart of not only small borrowers but also corporate borrowers and thus his party too will also become  invincible in election.

In this way , Mr. Minister created ground for final collapse of public sector banks. He used to keep all CMDs and EDs in his grip . He knew how to earn money by selling the post of CMD and EDs. He was least bothered of health of banks. He rather helped private banks to prosper and grow by leaps and bounds. He promoted the culture of selling of Government fund . Private banks could offer black money or illegal money to buy thousands of crores of rupees in form of deposits for their banks whereas top officials remained behind in this mad rush for deposits. Actually officials of PSBs are satisfied with undue promotion they used to get from ministers and also patronage they used to get from ministers when their evil works and corruption in lending got exposed .

As a consequence , bad loan started rising in almost all banks. Then ministers of old government used to guide bankers how to hide bad loans or how to rephase and restructure bad loan   to reduce bad loan ratio. IN this way , officers in banks learnt to inflate profits by concealing bad loans through manipulation and by reducing provisions.

Ministers used to tell  bankers that they should compromise with bad borrowers and sacrifice bank's good money for bad borrowers . To add fuel to fire , Congress Government sacrificed Rs.75000 crore by preaching write off of bank loan in the year 2008 so that victory in election of 2009 could be guaranteed.

Now the government has changed. Now Technology called as Core Banking Solution (CBS) has already been introduced in all banks. Now it has become a little bit difficult for bankers , not impossible to hide bad loans. As such banks are now planning how to hide bad loans and how much to declare bad loan in a particular quarter or year so that their old sins are not exposed overnight.

Anyway , whatever may be the historic reasons behind accumulation of bad loans in the books of banks , it is now open secret that NPA ratio and ratio of stressed assets in Public sector banks has gone beyond control . Government is constrained to provide additional capital to these banks for survival and for compliance with Basel norms.

In modern era, government has taken a jumping step forward to gain political advantage though in the name of growth and  giving a boost to credit growth. They are aspiring   to win the heart of farmers, industrialists and all. They have directly putting pressure on banks for sanctioning of loan or to face the punishment like suspension. IN this way it has become clear now that bank officials has to prepare themselves to sanction loan strictly as per whims and fancies of government officials or to remain ready for facing the punitive suspension and humiliation in public domain.

If bank unions chose to function as brothers of top officials and are busy in flattery and bribery like top officials, common bankers should be ready to face the music of ministers, politicians and local government officials . it is no more easy for them to safeguard their service and to protect their respect in society. So far as future and health of banks is concerned , it is sure to move from bad to worse and government will continue to infuse capital to save banks from disaster.

Officers who are clever , will sail their boat in the direction of current of the river and those who will go against the current will either sink or leave the bank. Let us see what happens. But the incident of aforesaid suspension will trigger a new disturbance in banking, it is sure. Here it is not a question whether the act of suspension is justified or not, it s a question of freedom of officers in taking prudent and wise decision while sanctioning a loan.

It is not a question whether the loan amount is small or big. It is a question of culture of lending which is being imbibed in bankers by clever politicians and then denying wage hike telling the burden of bad loans and lesser profitability as reason. When bankers can succumb to pressure for small loans, they freely sanction bigger value loans too without taking into account the risk factor but only considering the whims and fancies of politicians. They thus add to the basket of bad loans without any fear and repercussion.

Some clever officers of bank and politicians argue that  small loans are small piece of total bad assets of banks and banks are supposed to fulfil social welfare motive. Ok It is true . But when top 200 borrowers are said to be constituting 99 percent of bad loans, they say that loan to big corporates are necessary to fulfil national objective for  creating enough infrastructure and for adequate growth in GDP.

When media talk of recovery from bad borrowers who are high profile business houses or take punitive action against erring bank officials and politicians, they argue that such action will be a disincentive to bank officials and it will cause erosion in credit growth and force bank officials to stop sanctioning loans.

It means only evil ways are ways for success. It is better to say that success cannot be achieved by honest and good ways and means.

There is obviously no way to aspire for good lending and recovery from bad borrowers and bad bankers. If Small loan turn bad, it is in large numbers with small values and causes a slow poison to kill bank. When big loans like that of Kingfishers and Zoom Developers go bad, it is like Potassium Cyanide for banks and bank staff.

After all bankers are also human being and when survival is at stake, they think ,as their counterpart in government offices and department think, it better to swim and sink in the direction of river . When protections like Trade Union Leaders become role player of management, it will be unwise for any practical bankers to stick to principles of banking or to follow strictly the rules and laws of lending.


Tuesday, July 21, 2015

Injustice With Retired Bank Staff

Ref: 2015/208                                                             July 19, 2015

The Chairman,
Indian Banks’ Association,
World Trade Centre, 6th Floor , Centre 1 Building,
World Trade Centre Complex,  
Cuff Parade,  Mumbai - 400 005.

Dear Sir,

Reduction of Commutation from the date of retirement                            in cases where Commutation amount is paid much later

The 10th Bipartite Settlement/7th Joint Note is signed on the 25th May, 2015 and Basic Pay and other allowances, counted for calculation of terminal benefits, including pension is also revised, as provided therein.  On account of upward revision of ‘Pay’ which is counted for pension, those retirees who have retired on or after 1.11.2012, Basic Pension is also going up.  Consequently, they are also entitled to commutation amount on the one third of increased portion of basic pension.  Banks are reducing this portion of Basic Pension, which is commuted, from the date of retirement, instead of reducing from the date of payment of this pension. Similarly, whenever there is delay in payment of a portion of Commutation, on account of decision of Courts, Errors in calculations, sanction of increments/revision in pay, etc. the Commuted portion of increased Basic Pension is also being reduced from the date of retirement.  This practice is causing a loss for such of our members who have received/are receiving a portion of commutation much later.  This portion could be reduced for a period of fifteen years only from the date of payment of commutation amount.  However, Commutation factor as on the date of retirement needs to be reckoned, as the Commutation amount has become absolute on the date of retirement and commutation of one third of ‘pay’ was sanctioned without quantifying the commutable amount. The Bank Employees’ Pension Regulations do not provide for such practice.  The Regulation 56 of Bank Employees Pension Regulations provides for reference to Central Civil Services (Commutation of Pension) Rules, 1981, in case of doubt.   Rule 6(1) b, 6(2) and 10(A) of Central Civil Services (Commutation of Pension) Rules, 1981 clearly provide for

  1. Reduction of commuted portion of increased Basic Pension, for a period of fifteen years from the date of payment of such commuted amount;

  1. Commutation Factor on the date of retirement is reckoned for calculation of Commutation amount.   

Relevant portions from Bank Employees’ Pension Regulations and Central Civil Services (Commutation of Pension) Rules, 1981 have been extracted and furnished here below for your ready reference.  

Banks may also refer to their practice in respect of reduction in commuted portion of increased Basic Pension of Central/State Government Pensioners, to whom these Banks are disbursing pension, on account of revision in terms of Pay Commission Reports, Court Orders, Government Orders, etc.  Any difference in methods of reducing commuted portion of pension of Central/State Government pensioners and Bank pensioners is impermissible in view of what is provided in Regulation 56 of Bank Employees’ Pension Regulations and  Rule 6(1)b, 6(2) and 10(A) of Central Civil Services (Commutation of Pension) Rules, 1981.

Therefore, we request you to kindly advise the member banks to reduce commuted portion of the Basic Pension from the date of payment of commutation amount only and not from the date of retirement.  As member banks are parties to Bipartite Settlement/Joint Note dated 25th May, 2015, it would be more appropriate, if they are advised to revise the system immediately.

Thanking you and with regards,

                                                                          Yours Sincerely,

                                                                     GENERAL SECRETARY

Extracted from Central Civil Services (Commutation of Pension) Rules, 1981 :

6(1) The commutation of pension shall become absolute in the case of an applicant referred to
    .   .   .   .   .   .   .   .
Provided that –

(b) in the case of an applicant who is drawing pension from a branch of a nationalized bank, the reduction in the amount of pension on account of commutation shall be operative from the date on which the commuted value of pension is credited by the bank to the applicant's account to which pension is being credited.
.   .   .   .

(2) In the case of an applicant referred to in Rule 9 or Rule 10, the commuted value is paid in two or more stages, the reduction in the amount of pension shall be made from the respective dates of the payments as laid down in Clause (a) or Clause (b) of the proviso to sub-rule (1).

10 A. Restoration of Commuted Pension:

“The commuted amount of pension shall be restored on completion of fifteen years from the date the reduction of pension on account of commutation becomes operative in accordance with rule 6:

Provided that when the commutation amount was paid on more than one occasion on account of upward revision of pension, the respective commuted amount of pension shall be restored on completion of fifteen years from the respective date(s)”

Extracted from Frequently Asked Questions (FAQs) (Central Civil Pensioners)  (

G.12.  What would be the age to be used for commutation of additional commutable pension and which factor would be used for such additional commuted value of pension ?

The age reckoned for calculation of commuted value of pension at the time of original application for commutation of pension will apply for calculation of commutation value of additional commutable pension. However, as mentioned in the OM dated 2.9.2008, the commutation factor in the revised Table of Commutation Value for Pension will be used for the commutation of the additional amount of pension that has become commutable on account of retrospective revision of pay/pension.

G.13     From which date the reduction in pension on account of additional commutation of pension will take effect?

Reduction in pension on account of additional commutation of pension will be in two stages as per the provisions contained in Rule 6 of the CCS(Commutation of Pension) Rules,1981.

G.14 What will be the date of restoration of additional commutation of pension?

The commuted portion of pension shall be restored after 15 years from the respective dates of commutation as provided in Government of India decision No.1 under the Rule 10 of CCS (Commutation of Pension) Rules, 1981. Necessary endorsement should be made on PPO.


Despite several steps taken by Government of India and Reserve bank of India during last five to ten years , they have miserably failed to stop rise in bad debts in banks. Though GOI and RBI adopted many  so-called reformative policies and gave maximum freedom to public sector banks , they completely failed to ensure good health of PS banks. It is all because all efforts are directed in wrong direction. They have never tried to understand the root cause of growing sickness .

After all why only PS banks in particular and PSUs in general  are unable to perform and why they always fail to keep good health is a million dollar question which top ministers and top officials should ponder over to arrive at a fittest solution which can ensure best health of public sector undertakings including banks. They have to revisit  all  political, administrative, financial , Human resource , legal and other relevant policies to ensure good health of not only PSUs but employees working there.

Unfortunately, the team of flatterers which surrounds top ministers and top officials are prescribing wrong medicine to cure sickness of banks and PSUs in general. This is why  no improvement in health of any bank is visible and most  of PSUs including BSNL, Indian airlines, power generating companies, power distributing companies are suffering from various diseases,.

Prime reason is that Human work force is not loyal to their organisation and bitter truth is that an honest and sincere worker cannot survive with respect and dignity if he does not involve himself in art of flattery and bribery. Management of banks have failed to create loyalty and attachment to organisation in the minds of staff. Unless and until this culture of flattery and bribery is changed and stopped , good performers cannot give their best and bad performers will continue to rein and rule over organisations they serve.

The culture will change only when politicians who rule the country change their culture and attitude towards good workers . They change policies and rule of game every year for betterment but the fact is that situation moves always from bad to worse. Because rules are altered to accommodate flatterers and not performers. There is nepotism and favouritism at all levels.


NPA touches Rs.6 lakh crore-The Hindu

Banks in India have accumulated Non Performing Assets (NPA) of Rs.6,00,000 crore, the Public Accounts Committee (PAC) of Parliament has revealed.
PAC chairman and senior Congress leader K.V. Thomas said here on Monday that 54 per cent of the bad loans were advanced to corporate houses. Nationalised banks accounted for more than Rs.4,00,000 crore to Rs.5,00,000 crore of NPA. The PAC, in its report to Parliament, would recommend steps for recovery of bad loans. This was the first time the committee had assessed the NPA of banks.
Addressing a Meet the Press programme organised by the Thiruvananthapuram Press Club, Mr. Thomas said banks were adopting a lenient approach to corporate houses defaulting on loans when students and farmers were finding it difficult to get credit. “The banks justify their stand on the grounds that most of the loans were for infrastructure projects such as coal mines or airports.”

Bad loans: PAC to send questionnaire to banks-Times of India-20th July 2015

KOCHI: In an attempt to tackle growing bad loan menace in banks, the Public Accounts Committee (PAC) of the Parliament will send questionnaire to nationalised banks within a week's time, said K V Thomas, chairman of PAC.

"We had the first interaction with the banks, and on the basis of that, we will formulate the questions to IDBI and other nationalised banks. The banks will get 15 days' time to respond to it and we will scrutinise it, which will take one month," said Thomas.

It is estimated that country's public sector banks account for nearly Rs 2.55 lakh crore of bad loans, while the banks in the private sector account for Rs 31,461 crore.

"There are arguments that huge amounts are given to infrastructure development, like coal mining. Unless and until those projects complete on time, the repayment of the money won't be possible. This is what we are analysing now," Thomas said.

Towards the end of FY15, State Bank of India, one of the major banks hit by bad loans, registered a gross NPA of Rs 56,725.34 crore and net NPA of Rs 27,590.58 crore. During the same period, Punjab National Bank had gross NPA of Rs 25,694.86 crore and Net NPA of Rs 15,396.50 crore.

Similarly, IDBI Bank had a gross NPA of Rs 12,684.97 crore and net NPA of Rs 5,992.52 crore. Bank of Baroda had Rs 16,261.45 crore gross NPA and Rs 8,069.49 crore net NPA at the end of FY15.

CBI to beef up capability to check bank frauds-Hindu Business Line

The Central Bureau of Investigation (CBI) said it is enhancing its capacity to curb banking fraud in the country as the situation on bad debts or non-performing assets (NPAs) is becoming ‘grim.’ “We will be adding to the units that we have, such as the banking security and fraud cell. We will not only upgrade our capacity, but also set up new units, as we have in some metropolitan cities, and add more branches,” CBI Director Anil Kumar Sinha told BusinessLine on the sidelines of the Conference of Chief Vigilance Officers of Public Sector Banks and Financial Institutions here on Friday.
To augment the capabilities of investigators and prosecutors, the first batch of 30 CBI officers will begin training in handling advanced financial crimes from July 27 at IIM Bangalore. These are among 185 officers to be trained at this IIM and National Law School during this year. The CBI is also in the process of setting up a centralised technology vertical to support investigations in areas of cyber forensics, mobile forensics and forensic fraud examination.
Bad debts or NPAs rose to ₹2.22 lakh crore in 2014 from ₹45,000 crore in 2009. In percentage terms (of gross advances), the NPAs have grown to 3.8 per cent in 2014 from 2 per cent in 2009. “If we add to the NPAs, the poorly performing restructured loan accounts and other sub-standard assets, the situation becomes more grim,” Sinha said in his address.
He said while the NPAs were growing since the past five years, there was under-reporting of frauds for a variety of reasons linked to the larger issue of corporate governance in banks. ‘Deliberate undue accommodation in big ticket lendings’ was also found.
‘A lethal parasite’
Later, terming fraud in the financial sector as a ‘lethal parasite,’ Minister of State for Finance Jayant Sinha said 65 per cent of the total fraud cases reported by banks were technology-related frauds (committed through/at internet banking channel, ATMs and payment channels like credit/ debit/pre-paid cards) while the advances portfolio accounted for a major proportion (64 per cent) of the total amount involved in frauds.
He said the RBI is in the process of designing a Central Fraud Registry, where banks would be able to access key details of previous frauds. “The creation of such a database at the RBI will make available more information to banks at the time of the start of a banking relationship, extension of credit facilities or at any time during the operation of an account,” he said, adding that the CBI and the Central Economic Intelligence Bureau have also expressed interest in sharing their own databases with banks.