Friday, July 25, 2014

Penalty Imposed On 12 Banks

RBI penalises ICICI Bank, Canara Bank, Yes Bank &


 9 others The Reserve Bank said it had "carried out 


a scrutiny of the loan and current accounts of 


Deccan Chronicle Holdings, in certain branches of


 the 12 banks in late 2013". Based on the findings of 


the scrutiny, the RBI issued showcause notices to


 these banks in March 2014, to which the individual


 banks submitted written replies.

Mumbai: The Reserve Bank of India (RBI) on Friday fined 12 banks a sum totalling Rs.1.5 crore after scrutinizing their dealings with Deccan Chronicle Holdings Ltd in 2013. 


Twelve private sector and public sector banks namely, ICICI Bank Ltd, HDFC Bank Ltd, Axis bank Ltd, Kotak Mahindra Bank Ltd, IndusInd Bank Ltd, Yes Bank Ltd , State Bank of Hyderabad, Andhra Bank, Canara Bank, Corporation Bank, Ratnakar Bank Ltd and IDBI Bank Ltd were fined between Rs.40 lakh to Rs.5 lakh each, according to a RBI press release. 


ICICI Bank was fined the highest at Rs.40 lakh, while IDBI Bank and Axis Bank were both fined Rs.15 lakh each. 


Andhra Bank, Canara Bank, Corporation Bank, IndusInd Bank, Kotak Mahindra, State Bank of Hyderabad and Yes Bank were fined Rs.10 lakh each. 


“Based on the findings of the scrutiny, the Reserve Bank issued show cause notices to these banks in March 2014, to which the individual banks submitted written replies. 


After considering the facts of each case and the individual bank’s reply, as also, the personal submissions etc, by some of the banks before its committee of executive directors, the Reserve Bank came to the conclusion that some of the violations were substantiated and warranted imposition of monetary penalty as determined above.” 


RBI said without giving any more details. Comments from the banks are awaited. “This action is not intended to pronounce upon the validity of any transaction or agreement entered into between the concerned bank and the borrower,” RBI said.



State-run banks' profitability remains under stress-Business Standard

Rise in bad loans, higher provisioning and loss on sale of investments have dragged down their earnings growth
State-run banks' profitability in the first three months of this financial year have remained under stress. A rise in bad loans, higher provisioning and loss on sale of investments have dragged down their earnings growth.
Four public sector banks - Allahabad Bank, Indian Bank, Punjab National Bank (PNB) and UCO Bank - announced their first quarter earnings on Friday. Of these, two reported year-on-year decline in their profit after tax; the other two saw moderate growth in net profit.
PNB
PNB said its net profit for the quarter ended June increased by 10 per cent from a year earlier to Rs 1,405 crore. However, there was a sharp rise in non-performing assets (NPAs). The gross bad loan ratio deteriorated to 5.48 per cent from 4.84 per cent a year earlier, while its net NPA ratio was up four basis points to 3.02 per cent at the end of the quarter.
"NPAs continue to engage our attention in the current environment. An improvement in economic situation will probably help us better our asset quality. We are hopeful that our next NPA number will be better," said K R Kamath, chairman and managing director, in his post-earnings comments.
UCO Bank
Kolkata-based UCO Bank saw its April-June net profit rise only two per cent over a year, to Rs 521 crore. While the lender was able to improve its asset quality, lower treasury income and higher tax provisions limited its earnings growth.
"We have been conserving capital, acquiring assets cautiously and focusing on the retail banking business. We have been improving our asset quality for the past few quarters. But a drop in profit on sale of investments impacted our operating profit. Also, the bank coming out of the purview of MAT (Minimum Alternate Tax) and having to pay Rs 163 crore income tax in the quarter impacted our net profit," said Arun Kaul, chairman and managing director.
Allahabad Bank
Allahabad Bank's net profit fell 73 per cent from a year earlier to Rs 113 crore. "One large account, of Rs 400 crore, slipped into NPA during the quarter. Also, we had to make Rs 460 crore provisions against one account, which is a standard asset for us but has become an NPA for other consortium lenders. These factors resulted in a decline in our net profit," Rakesh Sethi, chairman and managing director, told Business Standard.
Indian Bank
Chennai-based Indian Bank saw its net profit fall 35 per cent to Rs 207 crore during the quarter. T M Bhasin, chairman and managing director, said in the corresponding period of previous year there was an 'exceptional gain' of Rs 314 crore, reduced to 36 crore in the first three months of this financial year. "In the next quarter, as the market conditions improve, we would be able to perform better on this count," he said

1 comment:

  1. The mother of all corruptions/crimes starts with this enactment. Therefore Our union must demand repeal of this section immediately.

    Banking Regulation Act, 1949

    34A. Production of documents of confidential nature
    (1) Notwithstanding anything contained in section l1of the Industrial Disputes Act, 1947 (14 of 1947), or any other law for the time being in force, no banking company shall, in any proceeding under the said Act or in any appeal or other proceeding arising there from or connected therewith, be compelled by any authority before which such proceeding is pending to produce, or give inspection of, any of its books of account or other document or furnish or disclose any statement or information, when the banking company claims that such documents, statement or information is of a confidential nature and that the production or inspection of such document or the furnishing or disclosure of such statement or information would involve disclosure of information relating to:
    (a) any reserves not shown as such in its published balance-sheet; or
    (b) any particulars not shown therein in respect of provision made for bad and doubtful debts and other usual or necessary provisions.
    (2) If, any such proceeding in relation to any banking company other than the Reserve Bank of India, any question arises as to whether any amount out of the reserves or provisions referred to in sub-section (1) should be taken into account by the authority before which such proceeding is pending, the authority may, if it so thinks fit, refer the question to the Reserve Bank and the Reserve Bank shall, after taking into account principles of sound banking and all relevant circumstances concerning the banking company, furnish to the authority a certificate stating that the authority shall not take into account any amount as such reserves and provisions of the banking company or may take them into account only to the extent of the amount specified by it in the certificate, and the certificate of the Reserve Bank on such question shall be final and shall not be called in question in any such proceeding.
    (3) For the purposes of this section "banking company" includes the Reserve Bank, the Development Bank, the Exim Bank, [the Reconstruction Bank], 136[the National Housing Bank], the National Bank [,the Small Industries Bank], the State Bank of India, a corresponding new bank, a Regional Rural Bank and a subsidiary bank.

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