NPA relief: Banks to offer Goa mining industry one-time settlement scheme-Firstbiz
State Bank of India has approved the one-time settlement (OTS) scheme for its borrowers from the beleaguered mining industry in Goa.
This is expected to pave way for other financial institutions to settle the long-pending bad debt of those who are in a lurch due to the halting of mining in the state.
The scrutiny committee of the state's Economic Development Corporation (EDC) yesterday recommended the Goa government to go ahead with the OTS offered by SBI to its borrowers, a senior EDC official said.
The bank has proposed 30 percent waiver on principle loan amount to the truck owners and 40 per cent to the barge owners, he said.
The bank has also offered to waive 100 per cent interest on the loans procured by the truck and barge owners from September 30, 2012, when iron ore exports had stopped following the Supreme Court order vis-a-vis illegal mining in the state, he said.
The truck, barge and mining machinery owners reeling under the debt were earlier offered subsidy up to 35 percent on their loan amount by the Goa government.
The government had asked the banks to provide relief through OTS as assets of these borrowers had turned into NPA.
The loans of 8,000 trucks, barges and machinery owners are feared to turn into bad debt, and the state government has estimated the total loan exposure of the mining dependent people to be about Rs 1,000 crore.
The other lenders like Lokmanya Cooperative Society, Syndicate Bank, Bank of India, IndusInd Bank and Canara Bank have also submitted their OTS, which would be vetted by the scrutiny committee before recommending the government to go ahead with it, the official added
STATE bank of India has announced waiver and settlement scheme for borrowers of GOA related with mining. Sacrificing considerable amount on exposure of Rs.1000 in projects related to mining in Goa by State Bank of India is total arbitrary, discriminatory and suicidal step.
It violates the spirit of uniformity in treatment to all borrowers of the country. Allowing relief to one sector of borrower and borrower of one state and depriving borrowers of other sector and other areas in the country. Further if SBI gives relief to bad borrowers , other Public sector banks will also have to sacrifice their good money for bad borrowers. Good borrowers will also stop repaying their loans. SBI management and RBI who condemned act of Government of Andhra Pradesh which announced and implemented loan waiver scheme as promised before election by ruling party are following the same bad culture .
SBI thus sacrifices huge amount of public money to please Government of India which ultimately harms the repayment culture , adversely affects the profit of the bank, affects the prospect of wage hike of bank staff, decrease capacity of bank to increase manpower as per need and then it increases work load on existing bank staff.
It is just like distribution of public money in charity as per whims and fancies of ministers and top officials of bank management which ultimately reduces value of dividend payable to share holders and interest payable to depositors.
Greatest loss is that it spoils repaying culture and all types of borrowers all over the country start wilfully avoiding repayment of loan and expects relief from bank and government of India on bad accounts called as Non Performing assets. Bank officials also avoid making effort for recovery of overdues from defaulters and prefer writing off loans or sacrificing huge volume of loan and interest to serve their self interest and to show their mentor ministers that they are loyal to GOI . This promotes and propagates a culture of flattery and bribery and all junior officers start serving their self interest by serving bosses at the cost of their organisation. In this way bad officers who sanctioned loans to bad person after taking bribe are also acquitted from punishment.
Obviously Such nexus among bad borrowers, bad top officials of bank and bad ministers of Government ultimately harm the future of lac of bank staff, crores of depositors and taxpayers, and lastly the stake holders of bank. And it is the duty of bank staff, depositors, taxpayers, stake holders in bank to protest such misuse of public money by bank management and government of India.
Enforcement Directorate issues Rs 608 crore notice to Tamil Nadu bank, Standard Chartered-DNA
Enforcement Directorate (ED) has issued an over Rs 608 crore showcause notice to a Tamil Nadu based Mercantile bank and leading foreign bank Standard Chartered for alleged foreign exchange violations in an illegal transfer of shares case of 2007.
The agency's Chennai office on Thursday issued a Rs 334.32 crore notice to Standard Chartered bank Mumbai while it slapped a Rs 274.03 crore notice to the Tamilnad Mercantile Bank Limited (TMBL) under the provisions of the Foreign Exchange Management Act (FEMA).
The case dates back to 2007 when the RBI detected that certain non-resident investors had acquired shares of TMBL from resident Indian shareholders in violation of set guidelines and subsequently asked the ED to probe the deal under FEMA laws.
"The ED conducted investigations and identified that Tamilnad Mercantile Bank, its the then Chairman, Directors, Company Secretary have all contravened the provisions of FEMA in transferring 46,862 shares of their bank to foreign entities in May 2007 without the prior approval of RBI and further allowing similar transfer of shares to foreign entities in December 2011 and June 2012 without the permission of RBI. The total amount of contravention (by TMBL) was identified as Rs 274.03 crore," ED's Special Director (South) K R Uday Bhaskar said in his order.
The order further said the probe also "identified contravention of FEMA by Ms Standard Chartered bank Mumbai in the opening and operation of an escrow account for the purpose of the said transfer to foreign investors.
"Standard Chartered bank was also found to have contravened the provisions of FEMA in taking custody of immovable properties in India and shares of TMBL for providing collateral/guarantee to a loan availed by the foreign investors in the Mauritius branch of Standard Chartered bank.
"The contravention of Standard Chartered bank was identified to be Rs 334.32 crore," the order said.
The order said the agency is also "proposing" action against the then Chairman of TMBL, MGM Maran as he had "facilitated the transfer from Indian investors to foreign investors and accordingly received consideration from the foreign investors to the tune of USD 6.85 million in his overseas account at Singapore" which is against FEMA laws.
All the parties have been asked to respond to the agency's notice within 30 days following which legal action would be initiated against them.
Bill in Lok Sabha to enable Regional Rural Banks to raise funds from market-Economic Times
NEW DELHI: Government today introduced in the Lok Sabha a bill to raise the authorised capital of Regional Rural Banks (RRBs) to Rs 2,000 crore while enabling them to mop up funds from the capital market.
The Regional Rural Banks (Amendment) Bill, 2014, which was tabled by Finance Minister Arun Jaitley, seeks to raise the authorised capital of the RRBs from Rs 5 crore to Rs
Under the proposed dispensation, the share capital of the RRBs could be split into 200 crore equity shares of Rs 10 each. As per the existing Act, the Rs 5 crore share capital of RRBs is split into 5 lakh shares of Rs 100 each.
The changes in the RRB Act, are aimed at "strengthening the capital base and improve
their overall capabilities".
The amendment envisages that the capital of government entities will not come down below 51 per cent in the RRBs. As per the statement of Objects and Reasons, the amendment seeks to "make provision for ..
Govt flays lobbying for top posts at PSU banks-LiveMint-19.12.2014
( read my comment given below)
RBI steps up efforts to improve coordination with law enforcement agencies-Business Standard- 19.12.2014
The banking regulator has held meetings with chief secretaries of states and is making efforts to improve coordination between regulators and law enforcement agencies for early identification of financial malpractices by some fly-by-night operators.
“Since the revelation of the financial mismamangement of some Ponzi schemes, there was a feeling that some of these entities are falling in the so-called regulatory gap. Since then we had a meeting of chief secretaries where we have urged them to make much better use of the state-level coordination committees. These committees should meet more frequently, at least four times a year,” RBI Governor Raghuram Rajan had said following the central bank’s board meeting in Kolkata last week.
A number of states, including West Bengal, have also created sub-committees under their state-level co-ordination committees.
“These are a sort of full-time contact points among the regulators and law enforcement agencies within the state. Then we can go quickly after some of these fly-by-night operators. There is now a much greater level of coordination as a result of our feeling that some of these entities were not falling within precise regulatory ambits,” Rajan added.
In April, 2013 Saradha Group, which was involved in an illegal deposit mobilisation scheme, shut shop. It had raised close to Rs 2,000 crore from over one million small investors in West Bengal alone. The company also had operations in other states including Odisha and Assam. After the scam came to light, the West Bengal state police arrested Saradha Group promoter Sudipta Sen and a few other key officials.
The Central Bureau of Investigation (CBI) has now taken charge of the investigation and arrested people with close links to the ruling Trinamool Congress (TMC).
West Bengal’s Transport Minister Madan Mitra, TMC’s Member of Parliament (MP) Srinjoy Bose, its suspended MP Kunal Ghosh, and the former director-general of West Bengal police, Rajat Majumdar, have been taken into custody so far.
The Supreme Court, which had given its go-ahead for the CBI probe in the Saradha chit-fund case, had questioned the role of regulators — the Securities and Exchange Board of India (Sebi), RBI and the Registrar of Companies — for their inaction in the multi-crore scam.
“Investigation conducted so far puts a question mark on the role of regulatory authorities like Sebi, the Registrar of Companies and the RBI, within whose respective jurisdictions and areas of operations the scam not only took birth but flourished unhindered,” the Supreme Court had said in its order in May.
RBI officials claimed the coordination between regulators and law enforcement agencies have now improved in West Bengal.
“We have already strengthened the mechanism of co-ordination. We have already conducted one set of state-level coordination committee meeting. Also, for the last three months, we are regularly meeting in the sub-committees and reviewing the progress on a continuous basis,” said a senior RBI official.
The banking regulator has also held training sessions for the state police department at the district level to help them check the proliferation of illegal chit fund companies.
However, government officials feel that the steps taken are still not adequate to prevent Saradha-like scams.
“The practice of officers being sent for training to RBI had been in place even before the Saradha scam. But these officers have hardly been used for the purpose for which they were trained,” said a senior official of the West Bengal government.
The state’s Consumer Affairs Minister Sadhan Pande claims such training camps are held occasionally. “They are quite infrequent. Only 150 officers from our state consumer affairs department underwent such training in last one year,” he said.