I think if one person from every bank files such case in court of law to expose corrupt top officials and ministers, GOI and IBA will quickly come forward for amicable wage settlement. I have been advocating such action since long. I wish all success to petitioner. And I hope all well wishers will extend full support to Mr. Sawant , the petitioner.
http://importantbankingnews2.blogspot.in/2014/12/bank-officers-candle-march-today.html
Bank officers plan candle march
Mumbai, December 15:
To protest against the delay in revision of wage settlement, bank officers will organise a candle march in Delhi’s Jantar Mantar and other State capitals on Tuesday. “The All India Bank Officers’ Confederation has decided to organise a protest candle march tomorrow, in all State Capitals and major cities to highlight the undue and unwanted delay in wage revision and other policies of the Government,” the confederation said in a statement. The revision is due from November 2012.
Mumbai, December 15:
Burgeoning bad debts in public sector banks has prompted an employees union to file a public interest litigation (PIL) seeking the Bombay High Court’s ‘interference and directions’ for effecting loan recoveries.
Subhash S Sawant, General Secretary, Central Bank Employees Union, has filed the PIL to get four of the eight respondents — Union of India, Finance Ministry, Reserve Bank of India and Central Vigilance Commission (respondents 1 to 4) — “to immediately and forthwith intervene”. The petition, which names Central Bank of India, All India Central Bank Employees’ Federation, Central Bank Employees Federation of India, and Indian Banks’ Association as the other respondents, seeks adjudication on a host of points of law of grave public importance.
Mr. Sawant Files Case In High court Against Officials of Bank who caused Rise In Bad Debts
Three officers of the Dhanlaxmi Bank arrested for their alleged role in cash-credit scam-Times of India 16.12.2014
MUMBAI: Investigations into the fixed deposit cash-credit scam on Monday arrested three officers of the Dhanlaxmi Bank for their alleged role in the Rs 141 crore case. The trio would be produced before the court on Tuesday.
Rajvardhan Sinha, additional commissioner of police, Economic Offences Wing (EOW), said, "We have just got arrested them and their interrogation is on." Those arrested include Suresh Bhogale, Mukesh Gohil and Arunkumar Mudliar. The EOW had earlier last week arrested the mastermind, Mohammed Fasih, in this case. He is in police custody for the last over four months and facing at least 15 such other cases totaling the fraud money upto Rs 300 crore. Fasih is the chairman and managing director of the Showman Group that runs the countrywide Sheesha lounge chain.
Investigators said that the three bank officers did not check the documents while granting overdraft facility and withdrawal of money. "We suspect they are hand in glove with the prime accused, Fasih and associates. Their custodial interrogation will throw light on these aspects," said a police source.
The EOW is currently probing 13 cases involving Fasih and CBI is investigating three other cases. EOW had earlier arrested Fasih's aides, Anil Pawar, Roy Joseph Thomas and Avinash Khandale, all three self-proclaimed investment consultants.
On July 28, Abhay Shah, managing director of M/s P G Group lodged an FIR with the Marine Drive police and the case was transferred to the EOW. The police found that Khandale had approached the P G Group's Marine Drive office and offered high returns on fixed deposits in nationalized banks. He also convinced the directors of the firm for huge investment. Subsequently, firms run by P G Group like P G Foils Pvt Ltd, Trinumala Iron Pvt Ltd, Prem Cables and Paras Raj Bohra Memorial Trust's hospital invested money. All the four companies had collectively invested Rs 141.8 crore in FDs.
"The hospital was started for poor people in the Piplya Kalan village, Raipur taluka (district Pali) in Rajasthan. The P G Group had made a separate corpus to fund the hospital and from this corpus Rs 10 crore was invested in a nationalized bank's Goregaon branch," said an investigating officer. The accused forged papers and using them they took cash-credit facility loan from the bank. In cash-credit, loan can be obtained upto 90 per cent of the total investment.
The police said it was scanning the role of some more employees of certain banks and if their roles emerged they will also be arrested. "We have compiled a list of such bank employees who handled FDs and cash-credit departments besides the verification of documents. We have summoned some of them and if their role emerged, they will be placed under arrest," the officer said.
Mastermind of this fraud, Mohammed Fasih (43) during interrogation told police that he invested Rs three crore in a Goa hotel and became a partner. Besides this, he also claimed to have bought the rights of old Hindi movies from a private firm and paid several crore rupees for this. The firm employees may be summoned for questioning and verification. Fasih told police he had purchased the 2013 Sanjay Dutt starrer Hindi movie Zilla Gaziabad but suffered huge loss since the move flopped at the box office.
Rs.150 Crore fraud surfaces at J&K Bank-Kashmir Mirror
Srinagar : Governance at J&K’s premier financial situation J&K Bank continues to plummet. Earlier it was a spate of Non-Performing Assets (NPA’s) amounting to couple of thousand crore and more , which management of the bank attempted to hide but now a massive fraud has been detected in the Bank with active collusion of the top management.
As per reports the entire Delhi zone is under scanner for purchasing fake letters of credit (LC’s) to the tune of whopping Rs 150 crores.
The fraudsters as per sources initially started their activity way back in year 2011 from Ghaziabad branch through accounts titled as M/S Sanjay Electronics, Maa Durga, Amit Trading, Nitin Gupta and Pankaj Gupta.
Thereafter the fraudsters spread their operations to Rajendra Place branch and commenced their operation through M/S Electronic Points, Mayur Trading Company, Ganesh Trading Company, Ankush Gupta and Pawan Kumar Gupta. Reportedly the modus-operandi followed by the swindlers was that they would draw cash against fake Letters of Credit (L.C) of other banks without getting the same confirmed from the establishing bank.
This entire operation had the blessings of top management of the bank and the same is established by the fact that the facility was enjoyed by the fraudsters without bank doing any due diligence and credit assessment which is an established norm in such cases. This is further reinforced by the fact that the routine inspection of these branches was deliberately not undertaken to hide the scam and wrong doings of the management of the bank at very senior levels.
The Audit and Inspection department of the bank and even the Audit Committee of Board have not initiated any action in the matter so far and have been caught napping thereby putting a serious question mark on their ability and conduct the operations of JK Bank.
Now that the amount of fraud has snowballed to over Rs 150 crores andthe branch heads involved namely Vijay Kumar Khazanchi and Avtar Kaul have been placed under suspension on 17th, November 2014 for their acts of omission and commission at their respective branches. The axe has fallen on the small fry while as other functionaries of the bank which includes incumbent Zonal Head and erstwhile Zonal Head presently manning a top management position have been let go scot free.
The top management functionary with whose active connivance and complicity the fraud has been perpetrated has misused his official position and prevented the Compliance and Regulatory Department from reporting the fraud to Reserve Bank of India despite it being mandatory and a regulatory requirement.
The regulatory guidelines explicitly specify that frauds of this nature and quantum are to be reported within one week of its surfacing. As per regulatory guidelines the bank has to file FIR with crime branch in this case and it is also to be reported for investigation to Serious Fraud Investigation Office (SFIO) Ministry of Company Affairs, Government of India besides Banking Security and Fraud Cell which is specialised cell of Economic Offences Wing of the CBI keeping in view the fact that the quantum of fraud is much more than Rs 25 crore
United Bank, Dhanlaxmi Bank have high NPA ratios: Jayant Sinha
New Delhi: United Bank of India and Dhanlaxmi Bank top the list of public and private sector lenders with maximum incidence of bad loans.
Among the foreign banks, Firstrand Bank had the 'worst' gross Non-performing Assets (NPAs) of 25.93 percent at the end of September 2014, Minister of State for Finance Jayant Sinha said in a written reply to the Rajya Sabha.
"Among the PSU banks, United Bank of India is the worst performer with 10.78 percent gross NPA ratio," he said, adding that Vijaya Bank with bad loans of 2.85 percent of total advances was the best performer.
Dhanlaxmi Bank, Sinha said, was the worst performer among private banks with NPA of 7.27 percent. The best performer was Yes Bank with NPA of 0.36 percent at the end of September.
NPAs of PSU banks as a whole stood at 5.29 percent, for private banks at 2.05 percent and for foreign banks at 3.90 percent at the end of September.
In a reply to a separate question, Sinha said the main reason for increase in NPAs of banks are sluggishness in domestic growth, slowdown in global economic recovery and continued uncertainty in global markets.
The sub-sectors which contribute significantly to the level of stressed advances are infrastructure, iron and steel, textiles, mining and aviation services, he added.
Three officers of the Dhanlaxmi Bank arrested for their alleged role in cash-credit scam-Times of India 16.12.2014
MUMBAI: Investigations into the fixed deposit cash-credit scam on Monday arrested three officers of the Dhanlaxmi Bank for their alleged role in the Rs 141 crore case. The trio would be produced before the court on Tuesday.
Rajvardhan Sinha, additional commissioner of police, Economic Offences Wing (EOW), said, "We have just got arrested them and their interrogation is on." Those arrested include Suresh Bhogale, Mukesh Gohil and Arunkumar Mudliar. The EOW had earlier last week arrested the mastermind, Mohammed Fasih, in this case. He is in police custody for the last over four months and facing at least 15 such other cases totaling the fraud money upto Rs 300 crore. Fasih is the chairman and managing director of the Showman Group that runs the countrywide Sheesha lounge chain.
Investigators said that the three bank officers did not check the documents while granting overdraft facility and withdrawal of money. "We suspect they are hand in glove with the prime accused, Fasih and associates. Their custodial interrogation will throw light on these aspects," said a police source.
The EOW is currently probing 13 cases involving Fasih and CBI is investigating three other cases. EOW had earlier arrested Fasih's aides, Anil Pawar, Roy Joseph Thomas and Avinash Khandale, all three self-proclaimed investment consultants.
On July 28, Abhay Shah, managing director of M/s P G Group lodged an FIR with the Marine Drive police and the case was transferred to the EOW. The police found that Khandale had approached the P G Group's Marine Drive office and offered high returns on fixed deposits in nationalized banks. He also convinced the directors of the firm for huge investment. Subsequently, firms run by P G Group like P G Foils Pvt Ltd, Trinumala Iron Pvt Ltd, Prem Cables and Paras Raj Bohra Memorial Trust's hospital invested money. All the four companies had collectively invested Rs 141.8 crore in FDs.
"The hospital was started for poor people in the Piplya Kalan village, Raipur taluka (district Pali) in Rajasthan. The P G Group had made a separate corpus to fund the hospital and from this corpus Rs 10 crore was invested in a nationalized bank's Goregaon branch," said an investigating officer. The accused forged papers and using them they took cash-credit facility loan from the bank. In cash-credit, loan can be obtained upto 90 per cent of the total investment.
The police said it was scanning the role of some more employees of certain banks and if their roles emerged they will also be arrested. "We have compiled a list of such bank employees who handled FDs and cash-credit departments besides the verification of documents. We have summoned some of them and if their role emerged, they will be placed under arrest," the officer said.
Mastermind of this fraud, Mohammed Fasih (43) during interrogation told police that he invested Rs three crore in a Goa hotel and became a partner. Besides this, he also claimed to have bought the rights of old Hindi movies from a private firm and paid several crore rupees for this. The firm employees may be summoned for questioning and verification. Fasih told police he had purchased the 2013 Sanjay Dutt starrer Hindi movie Zilla Gaziabad but suffered huge loss since the move flopped at the box office.
Rs.150 Crore fraud surfaces at J&K Bank-Kashmir Mirror
Srinagar : Governance at J&K’s premier financial situation J&K Bank continues to plummet. Earlier it was a spate of Non-Performing Assets (NPA’s) amounting to couple of thousand crore and more , which management of the bank attempted to hide but now a massive fraud has been detected in the Bank with active collusion of the top management.
As per reports the entire Delhi zone is under scanner for purchasing fake letters of credit (LC’s) to the tune of whopping Rs 150 crores.
The fraudsters as per sources initially started their activity way back in year 2011 from Ghaziabad branch through accounts titled as M/S Sanjay Electronics, Maa Durga, Amit Trading, Nitin Gupta and Pankaj Gupta.
Thereafter the fraudsters spread their operations to Rajendra Place branch and commenced their operation through M/S Electronic Points, Mayur Trading Company, Ganesh Trading Company, Ankush Gupta and Pawan Kumar Gupta. Reportedly the modus-operandi followed by the swindlers was that they would draw cash against fake Letters of Credit (L.C) of other banks without getting the same confirmed from the establishing bank.
This entire operation had the blessings of top management of the bank and the same is established by the fact that the facility was enjoyed by the fraudsters without bank doing any due diligence and credit assessment which is an established norm in such cases. This is further reinforced by the fact that the routine inspection of these branches was deliberately not undertaken to hide the scam and wrong doings of the management of the bank at very senior levels.
The Audit and Inspection department of the bank and even the Audit Committee of Board have not initiated any action in the matter so far and have been caught napping thereby putting a serious question mark on their ability and conduct the operations of JK Bank.
Now that the amount of fraud has snowballed to over Rs 150 crores andthe branch heads involved namely Vijay Kumar Khazanchi and Avtar Kaul have been placed under suspension on 17th, November 2014 for their acts of omission and commission at their respective branches. The axe has fallen on the small fry while as other functionaries of the bank which includes incumbent Zonal Head and erstwhile Zonal Head presently manning a top management position have been let go scot free.
The top management functionary with whose active connivance and complicity the fraud has been perpetrated has misused his official position and prevented the Compliance and Regulatory Department from reporting the fraud to Reserve Bank of India despite it being mandatory and a regulatory requirement.
The regulatory guidelines explicitly specify that frauds of this nature and quantum are to be reported within one week of its surfacing. As per regulatory guidelines the bank has to file FIR with crime branch in this case and it is also to be reported for investigation to Serious Fraud Investigation Office (SFIO) Ministry of Company Affairs, Government of India besides Banking Security and Fraud Cell which is specialised cell of Economic Offences Wing of the CBI keeping in view the fact that the quantum of fraud is much more than Rs 25 crore
United Bank, Dhanlaxmi Bank have high NPA ratios: Jayant Sinha
New Delhi: United Bank of India and Dhanlaxmi Bank top the list of public and private sector lenders with maximum incidence of bad loans.
Among the foreign banks, Firstrand Bank had the 'worst' gross Non-performing Assets (NPAs) of 25.93 percent at the end of September 2014, Minister of State for Finance Jayant Sinha said in a written reply to the Rajya Sabha.
"Among the PSU banks, United Bank of India is the worst performer with 10.78 percent gross NPA ratio," he said, adding that Vijaya Bank with bad loans of 2.85 percent of total advances was the best performer.
Dhanlaxmi Bank, Sinha said, was the worst performer among private banks with NPA of 7.27 percent. The best performer was Yes Bank with NPA of 0.36 percent at the end of September.
NPAs of PSU banks as a whole stood at 5.29 percent, for private banks at 2.05 percent and for foreign banks at 3.90 percent at the end of September.
In a reply to a separate question, Sinha said the main reason for increase in NPAs of banks are sluggishness in domestic growth, slowdown in global economic recovery and continued uncertainty in global markets.
The sub-sectors which contribute significantly to the level of stressed advances are infrastructure, iron and steel, textiles, mining and aviation services, he added.
Banks hire environmental, social specialists to reduce NPA risks-Business Standard
These experts are to assess loan proposals before banks sanction big ticket advances
'Go green' appears to be the new mantra for banks as they struggle to stem asset quality risks in the current uncertain macro-economic environment.
A few banks have started appointing environmental specialists and social experts to appraise loan proposals before sanctioning big ticket advances. The move is aimed to reduce the scope of delinquencies arising from lack of environmental clearances or employee unrest.
Bankers explained that sometimes a project gets stuck for environmental clearance or due to union unrest because of unhealthy work environment. In such scenarios banks' loans are at risk. Hence, lenders are seeking the help of specialists to evaluate large ticket loan proposals. This is being done in addition to the routine loan appraisal process where lenders assess commercial viability of a project, cash flow expectations, etc.
"YES Bank has the environmental and social policy (ESP), which draws from the Equator Principles, IFC guidelines and other international best practices and provides a 360 degree risk mitigation framework. It covers impacts related to natural habitat, including air, water, land, flora, fauna and biodiversity. The policy also covers negative impact on the environment due to project financing, such as pollution, land water/ground water depletion, deforestation and habitat destruction," Namita Vikas, senior president and country head for responsible banking at YES Bank, told Business Standard.
She added that the private lender has been training professionals on environmental and social risks to help them in decision making after evaluating projects on ESG parameters.
"There is a large gap in the existing level of sensitisation among bankers on ESG parameters...This (training professionals) is just a starting point and such trainings could become part and parcel of risk assessment courses for BFSI (banking and financial services institution), and management institutions," Vikas said.
Its rival Axis Bank is planning to introduce ESG (environmental, social and governance) audit to appraise loan proposals soon. "A proposal has been submitted to the board. The bank will start asking for ESG certificates while appraising loan proposals," a person familiar with the development said.
But still very few banks have adopted this practice. Bankers claim that borrowers are often inclined to approach loans from banks that do not demand ESG audit. The Indian Banks' Association (IBA) is working towards creating a unified code for banks to create a level playing field and ensure balance between growth and sustainability.
"Some of these things need to start in the form of self-regulation. That is where IBA comes in and that will be the best way forward. In any project that needs environmental clearance there is an in-built clause in the loan. Every bank will put in their sanction letter that environmental clearance should be there. But what is happening is sometimes the clearance is there but problems still remain. So, some of the banks do not want to rely on certificates given by some government official. It is a good move by the industry," said a deputy governor with the Reserve Bank of India (RBI) on condition of anonymity.
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