Time to cleanse banking in India--Times of India ---18th July 2013
In what is probably the single biggest penal action in the history of Indian banking, the Reserve Bank of India (RBI) has imposed stiff penalties totalling to ` 49.5 crore on 22 public and private sector banks for violating anti-money laundering and know-your customer regulations. This follows slapping of fines totalling to ` 10.5 crore against three “new generation” private banks on the same grounds following an expose by an online portal. As similar inquiries against other banks are reportedly at different stages, the list is likely to grow.
The fact that the RBI found such a large number of banks violating its regulations shows that the breach is widespread and cannot be explained simply by the banker’s overzealousness to book business at any cost, especially in case of public sector banks whose culture is against undue risk taking.
Though the RBI claims that its inquiries did not reveal any prima facie evidence of money laundering, it has not given them a clean chit on this account and added that “any conclusive inference in this regard can be drawn only by an end-to-end investigation of the transactions by tax and enforcement agencies”. This is too serious a matter to be foreclosed with mere imposition of fines. The RBI should make its findings public so that people know what is happening in the banks to which they entrust their hard-earned money.
The government should immediately constitute a special investigation team of officials from the RBI, the directorate of enforcement and the income tax department to probe the suspected cases of money laundering. In the 1992 stock market scam, the joint parliamentary committee had held some foreign banks responsible. However, no civil or criminal proceedings were initiated against any banker and some of the key players subsequently emerged as entrepreneurs and consultants with the support of their banks. This time, the government should not allow the issue to be swept under the carpet.
Read following Blogs which has been submitted in during last
few days only
We all are well aware that during last decade or so, HR policies of most of the bank, specially Promotion Policies, have undergone changes and merit oriented schemes have been introduced. However, at the ground level, the execution of these policies is totally fraudulent. Top bosses, in the name of merit, have promoted those who have been sycophants or taken recourse to corrupt practices rather than the true growth of the bank they serve. In the name of merti, huge number of juniors have been promoted and seniors humiliated. All this has resulted in large scale rift among the officers community.
http://dkjain4970901092007.blogspot.in/
Future OF PSU Banks Will Be Like BSNL, Indian Airlines
PSU Banks may face the same fate as state-run peers in telecom, aviation -ET
11th July 2013 ( Similar opinion express by me in my past blogs , links given below )
Indian banking is experiencing a tectonic shift. Holding a stick to state-run bank chairmen to revive the economy will do more harm than help the nation's cause. PSU banks may face the same fate as state-run peers in telecom and aviation. If the government does not change its way and banks don't focus on service, both may end up as losers.
Thursday, June 27, 2013
Asset Quality Is Worse Than What Is Shown In BS
Banks in general have again started concealing bad assets and the same hiding approach which was applied when the work of identification of bad assets used to take place manually.
Banks in general have again started concealing bad assets and the same hiding approach which was applied when the work of identification of bad assets used to take place manually.
Sunday, July 7, 2013
Confused Finance Minister Will Damage Indian Banks and Indian Economy
Finance Minister Mr. Chidambram on the one hand advises banks for Rate Cut , on the other is ready to accept demand of brainless bankers to remove ceiling of 15% on bulk deposits. In this way he is suggesting ways to increase cost of deposits and reduce yield on advances by lending at lower rate which in turn will adversely affect the profitability of public sector banks..
Finance Minister Mr. Chidambram on the one hand advises banks for Rate Cut , on the other is ready to accept demand of brainless bankers to remove ceiling of 15% on bulk deposits. In this way he is suggesting ways to increase cost of deposits and reduce yield on advances by lending at lower rate which in turn will adversely affect the profitability of public sector banks..
Monday, July 8, 2013
Hiding NPA Is Good For All Bank , Borrower And Government
It is in the interest of bank as well as borrowers if the bad accounts are not declared as Non Performing Assets. In other words if NPA accounts are considered as Standard or you can say if bank management hide NPA.
Banks have to make less provision and continue to earn interest on loan which ultimately helps in inflating profit.Bank officials need not waste their time in initiating recovery measures to recover the money form bad borrowers.Banks will be able to achieve credit target easily and thus attract appreciation from all corners.Bank top officials will get appreciation from Ministry of Finance and Government of India . More and more dividend will be available to investors as well as Government of India who holds majority shares.
It is one more sordid scam, which has been encouraged by CMDs / EDs of all these banks under the very nose of RBI. Scam was exposed by not the regulator but by an online portal. Immediately, suspension of some junior officers took place. Soon internal enquiries of such banks mostly gave clean chit to themselves. Most of the suspended officers were re-instated as deeper enquiries would have revealed the name s of top bosses. When cornered by overwhelming evidence on camera, regulator imposes peanut penalties.
It is in the interest of bank as well as borrowers if the bad accounts are not declared as Non Performing Assets. In other words if NPA accounts are considered as Standard or you can say if bank management hide NPA.
Banks have to make less provision and continue to earn interest on loan which ultimately helps in inflating profit.Bank officials need not waste their time in initiating recovery measures to recover the money form bad borrowers.Banks will be able to achieve credit target easily and thus attract appreciation from all corners.Bank top officials will get appreciation from Ministry of Finance and Government of India . More and more dividend will be available to investors as well as Government of India who holds majority shares.
Banks have to make less provision and continue to earn interest on loan which ultimately helps in inflating profit.Bank officials need not waste their time in initiating recovery measures to recover the money form bad borrowers.Banks will be able to achieve credit target easily and thus attract appreciation from all corners.Bank top officials will get appreciation from Ministry of Finance and Government of India . More and more dividend will be available to investors as well as Government of India who holds majority shares.
It is one more sordid scam, which has been encouraged by CMDs / EDs of all these banks under the very nose of RBI. Scam was exposed by not the regulator but by an online portal. Immediately, suspension of some junior officers took place. Soon internal enquiries of such banks mostly gave clean chit to themselves. Most of the suspended officers were re-instated as deeper enquiries would have revealed the name s of top bosses. When cornered by overwhelming evidence on camera, regulator imposes peanut penalties.
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