HSBC helped client hide accounts in India

Source :28 JAN, 2011, 03.21AM IST,BLOOMBERG 


HSBC Holdings bankers conspired with a New Jersey businessman to help him hide his bank accounts in India from the US Internal Revenue Service, according to an indictment and people familiar with the matter. 

Vaibhav Dahake conspired with five bankers of "one of the largest international banks in the world", which has headquarters in England, according to his indictment on Wednesday in federal court in Newark, New Jersey. London-based HSBC, Europe's largest bank by market value, is the bank, according to people familiar with the probe. They requested anonymity because the US Justice Department hasn't identified the conspirators. 

Dahake, of Somerset, New Jersey, is the first taxpayer charged in a crackdown focusing on whether HSBC helped clients with Indian accounts hide assets from the IRS. He's accused of conspiring with two bankers in New York, one in Fremont, California, and two in Thane, India. He faces as long as five years in prison. 

"Bankers should encourage their clients to comply with the law, not advise them on how to break it," Paul Fishman , the US attorney in New Jersey, said in a statement. 

Juanita Gutierrez, a bank spokeswoman, said in an e-mailed statement: "HSBC does not condone tax evasion and fully supports the US efforts to promote appropriate payments of taxes by US taxpayers." 

'Appropriate Action' 

"We investigate all allegations of employee misconduct vigorously and take appropriate action if breaches to HSBC policies are found," she said. 

Dahake's attorney, Lawrence Horn of Sills Cummis & Gross in Newark, New Jersey, said in a statement: "It is most regrettable that the United States attorney and the Department of Justice decided to indict my client, Mr Dahake. It is most important for everyone to recognise that an indictment is merely a charge." He said his client "is cloaked with the presumption of innocence" until proven guilty. 

A widening tax crackdown has led to criminal charges against UBS, the largest Swiss bank, two dozen former clients, four former bankers and two advisers. In December, a former UBS banker pleaded guilty to conspiring with a Swiss banker to encourage US clients to hide their assets from the IRS at Basler Kantonalbank, a smaller Swiss bank. A Virginia surgeon with an HSBC account also pleaded guilty as part of the crackdown. 

NRI Services 

According to Wednesday's indictment, the unidentified bank operated a US division called NRI Services, which marketed offshore banking services to US citizens of Indian descent. 

Through NRI, the bank "encouraged US citizens to open undeclared bank accounts in India," according to the indictment. 

Dahake, a native of India who became a US citizen in 2006, filed false tax returns that hid ownership of and income from undeclared accounts in India, as well as the British Virgin Islands, according to the indictment. 

His British Virgin Islands accounts didn't pay interest, and the bank solicited him to open accounts in India that paid "high interest rates," according to the indictment. 

In 2001, he met with a banker in New York who touted the advantages of an Indian account, "including that no US forms were required, he did not have to provide a social security number, the account was not taxable in India" and no Form 1099 reporting the interest income would be filed with the IRS, according to the indictment. 

'Below the Radar' 

In transferring funds, the banker advised, Dahake should send multiple checks in the amount of $10,000 rather than one large one so that he could "stay below the radar", according to the indictment. 

Two other US bankers also told him that the bank would not file 1099 forms with the IRS, the indictment said. Last April, Dahake was talking with a banker in Fremont and asked if the bank would issue 1099 forms, according to the document. The banker stopped speaking in English and said in Hindi that Dahake shouldn't discuss the forms on the phone, it said. 

HSBC closed its NRI offices in New York and Fremont last June, according to Gutierrez. She declined to say whether any employees had been terminated or disciplined. Last February, Andrew Silva , a Virginia surgeon, pleaded guilty to conspiring with an HSBC banker and a Zurich attorney to hide a $250,000 account from the IRS by smuggling 26 cash payments to the US.

2010-11 CORPORATE LAWS CASE LAWS

2010-11 CORPORATE LAWS CASE LAWS  Very Useful for CS Professional/CA Final & CS Executive Students. Compiled by BBLAWCLASS. Also published in CSoC 1.     OIL AND NATURAL GAS CORPORATION LTD. v. COMMISSIONER OF INCOME-TAX[2010] 322 ITR 180 (SC)] Jain D. K. & Thakur T. S. JJ [Decided on 15.3.2010] Income-tax Act, 1961 – Section 37(1) – Business expenditure–  Revenue expenses incurred with foreign exchange borrowings – Loss on account of fluctuation in rate of foreign exchange as on last date of balance-sheet –  Whether allowable as deduction  Held, Yes. 2.     DEPUTY COMMISSIONER OF INCOME-TAX v. M. SUNDARAM [2010] 322 ITR 196(MAD)] Mala R. J [Decided on 26.2.2010] Income-tax Act, 1961 – Section 276CC – Offences and prosecution – Failure to file return in time – Mere payment of interest/penalty – Whether criminal liability is absolved – Held, No. 3.     ISPAT ALLOYS LTD. v. UNION OF INDIA [2010] 2 GSTR 35 (BOM)] Ferdino I. Rebello & Karnik D. G. JJ [Decided on 12.8.2009] Customs Act, 1962 Section 25 – Customs duty – Exemption notification – Promissory estoppel – Withdrawal of exemption notifications during period of exemption in interest of public – Whether tenable – Held, Yes. 4.     UNION OF INDIA v. R. GANDHI, PRESIDENT, MADRAS BAR ASSOCIATION [CIVIL APPEAL NO.3067 OF 2004] & MADRAS BAR ASSOCIATION  v. UNION OF INDIA [CIVIL APPEAL NO.3717 OF 2005] K G Balakrishnan, CJI, R V Raveendran, D K Jain, P Sathasivam & J M Panchal, JJ [Decided on 11-05- 2010] Companies Act, 1956 – 2002 Amendment Act – Parts 1B and 1C of the Act – Whether constitution of NCLT and NCLAT constitutionally valid – Held, Yes. 5.     HMT LTD. v. N. T. RAHAMATULLA KHAN AND ASSOCIATES [2010] 155 COMP CAS 169(KAR) Shylendra Kumar D. V. & Ananda N. JJ [Decidedon 1-2-2010] Companies Act, 1956 – Section  433(e) – Winding up order – Public sector company – Petition for winding up admitted and advertisement ordered without considering defence of company – Whether correct-Held, No. 6.     NU-LINE INDIA P. LTD.,  In re., SWATI STORWEL P. LTD. , IN RE &  STURDY INDUSTRIES LTD., In re.[2010] 155 COMP CAS 186 (HP)] Deepak Gupta J [Decided on 10-9-2009] Companies Act, 1956 – Sections 391 & 394 – Scheme of amalgamation – Documents filed by company contrary to each other – Petition presented in order to overcome any order of Company Law Board – Companies withholding material facts and misleading court – Whether scheme to be approved – Held, No. 7.     SHREE KARTHIK PAPERS LTD. v. SEBI [2010] 155 COMP CAS 201(MAD)] Sivagnanam T. S. J [Decided on 25-2-2010] Sick Industrial Companies (Special Provisions) Act, 1985 – Section 18  – Scheme of rehabilitation-BIFR issuing direction under rehabilitation scheme to stock exchanges and exempting company from various statutory provisions and SEBI guidelines for reducing equity capital and listing of reduced shares – Whether such directions are valid- Held, No. 8.     U. P. CEMENT VETANBHOGI SAHKARI RIN SAMITI LTD. v. OFFICIAL LIQUIDATOR [2010] 155 COMP CAS 211(ALL) Ashok Bhushan & Pandey K. N. JJ [Decided on 18-12-2009] Section 483 of the Companies Act, 1956  read with Section 100A of the Code of Civil Procedure, 1908 – Second appeal from order passed by Single Judge in exercise of appellate jurisdiction – Whether further appeal from such order lie under section 483 - Held, No. 9.     KIMSUK KRISHNA SINHA v. SEBI [2010] 155 COMP CAS 295(DEL)]  Dr. S. Muralidhar J [Decided on 9-4-2010] Securities and Exchange Board of India Act, 1992 read with Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 – Powers of SEBI to investigate  – Draft red herring prospectus – Misstatement in prospectus – Complaint received after the closure of issue – Whether SEBI can entertain the complaint - Held, Yes. 10.                       IBA HEALTH (INDIA) P. LTD. v. INFO-DRIVE SYSTEMS SDN. BHD [2010] 155 COMP CAS 323 (KAR)  Shylendra Kumar D. V. & Narayanaswamy L. JJ [Decided on 21-10-2009] Companies Act, 1956 – Section  433(e) and  (f) – Winding up – Grounds for winding up – Inability to pay debts – Bona fide debt – Merger of companies – Failure of legitimate payments undertaken after deed of settlement – Whether Order of winding up justified – Held, Yes. 11.                       TECHNOVA TAPES (INDIA) P. LTD. v. REGIONAL DIRECTOR [2010] 155 COMP CAS 395 (KAR) Anand B Yarareddy J [Decided on 9-9- 2009] Companies Act, 1956 – Section  22 – Name of company – Rectification – Limitation – Change of law – Amendment giving right to proprietor of registered trade mark to apply within five years of knowledge of infringement – Whether revive right to apply for rectification after expiry of limitation under old law – Held, No. 12.                       SASKEN COMMUNICATION TECHNOLOGIES LTD.,  In re. [2010] 155 COMP CAS 463(KAR) Nagamohan Das H. N. J [Decided on 31-3-2010] Companies Act, 1956 – Sections 211, 391 and 394 – Scheme with shareholders – Creation of business restructuring reserve from securities premium account – Objections on the ground of violation of AS  – Whether ground for rejection – Held, No. 13.                       SHREE VIJAYALAKSHMI CHARITABLE TRUST v. SUB-REGISTRAR [2010] 155 COMP CAS 549 (MAD) Kirubakaran N. J [Decided on 7- 9-2009] Indian Stamp Act, 1899 read with Registration Act, 1908 – Stamp duty – Winding up – Sale of assets by public auction – Sale certificate sent to Registrar for filing in book No. 1 – Whether attracts stamp duty – Held, No. 14.                       CHENNAI YETRUMATHI VALAGA UZHIYARGAL MATRUM POTHU THOZHILALAR SANGAM v. DEVELOPMENT COMMISSIONER, MEPZ SPECIAL ECONOMIC ZONE & ORS [2010] 156 COMP CAS 1(MAD) Murugesan D & Sathyanarayanan M. JJ [Decided on 29-3-2010] Section 529A of the Companies Act, 1956 read with section 73 of the Code of Civil Procedure, 1908 – Company under winding up – Sale of assets by banks under Securitisation Act – Workmen’s dues not quantified – Whether invocation of section 529A possible – Held, No. 15.                       BROTHERS GAS AGENCY v.  HEMKUNT GASES P. LTD [2010] 156 COMP CAS 17 (P&H) Kannan K. J [Decided on 28-5-2009] Companies Act, 1956 – Section 443(e) – Dealer in distribution of liquefied petroleum gas – Breach of contract by principal company – Termination of contract – Petition by dealer against principal company for recovery of security deposit paid by customers and damages for breach of contract – Whether petition maintainable - Held, No. 16.                       VARINDER SAHNI v. MGRM NET LTD [2010] 156 COMP CAS 36 (DEL) Gita Mittal, J [Decided on 30-4-2009] Companies Act, 1956 – Section 433(e) – Winding up – Inability to pay debts – Claim based on rent agreement – Failure by company to pay arrears of rent – Land lord files winding up petition – Company making huge counter claim in suit and seeking permission to contest as an indigent person – Whether petition to be admitted – Held, yes. 17.                       SITARAM SINGH CONSTRUCTION P. LTD. v. UNION OF INDIA [2010] 156 COMP CAS 127 (PAT) Ramesh Kumar Datta J [Decided on 11-12- 2009] Companies Act, 1956 – Section 560 – Register of Companies – Name struck off on failure to file annual returns – Notice not published in Official Gazette or sent by registered post to company before its name struck off from Register – Company a going concern – Whether name of the company to be restored- Held, Yes. 18.                       KANORIA JUTE AND INDUSTRIES LTD. SANGRAMI SHRAMIK UNION v. AAIFR [2010] 156 COMP CAS 131(CAL) Sanjib Banerjee J [Decided on 2-7-2009] BIFR directed by High Court to reconsider revival of company and to give all parties reasonable opportunities – Whether invitation to outsiders to submit scheme for revival of company is irregular – Held, No. Powers of BIFR – BIFR requiring company and operating agency to assess locus standi of union to represent workers – Whether correct – Held, No. 19.                       DAMODAR VALLEY CORPORATION v. AAIFR [2010] 156 COMP CAS 137 (DEL) Madan B. Lokur & Pathak A. K. JJ [Decided on 7-7-2009] Sick Industrial Companies (Special Provisions) Act, 1985 – Section 19(2) – Draft rehabilitation scheme – Consent not given within period of sixty days from date of circulation of scheme – Written request for extension of time also not given – Whether deemed consent to be inferred – Held, Yes. 20.                       O. L. OF GUJARAT RUBBER WORKS LTD. v. MANAGER, CENTRAL BANK OF INDIA [2010] 156 COMP CAS 142 (GUJ) Jayant Patel J [Decided on 15-7-2009] Section 529A of the Companies Act, 1956 read with section 19 (19) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, Winding up – Preferential payments – Worker’s dues – Jurisdiction – Suit filed by secured creditor before Debt Recovery Tribunal after commencement of winding up – Sale of assets under order of Debts Recovery Tribunal – Recovery certificate yet to be issued – Amount lying with bank under orders of Tribunal – Whether company court can order deposit of workers’ share on pro rata basis for distribution on ad hoc basis – Held, Yes. 21.                       CHETTINADU CONSTRUCTIONS v. MUTHUKUMARASAMY TEXTILES LTD [2010] 156 COMP CAS 203 (MAD) Paul Vasanthakumar N. J [Decided on 8-10-2009] Companies Act, 1956 Sections 433(e), (f), 434(1) and 439(1) – Winding up – Inability to pay debts – Bona fide dispute as to debt – Application by creditor for appointment of arbitrator before filing winding up petition – Whether petition is maintainable- Held, No. 22.                       PROVAKAR DAS GUPTA v. VETERAN CO. P. LTD [2010] 156 COMP CAS 241(CLB)  Balasubramanian S. (Chairman) [Decided on 5-6-2009] Companies Act, 1956 – Sections 397 and 398 – Oppression and mismanagement – Petition for relief – Articles of association stipulating transfer of shares only to ex-military/ retired military personnel – Amendment of articles to induct heirs of existing directors as members and directors – Whether constitutes oppression and mismanagement – Held, Yes. 23.                       CEMENT CORPORATION OF INDIA LTD. v. REGIONAL LABOUR COMMISSIONER (CENTRAL) [2010] 156 COMP CAS 266 (KAR) Subhash B. Adi J [Decided on 21-3-2007] Section 7(7) of the Payment of Gratuity Act, 1972 read with section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 – Sick industrial company – Suspension of legal proceedings – Payment of gratuity – Appeal from order of Controlling Authority – Pre-requisite condition of deposit of gratuity amount – Whether appeal can be accepted without depositing the payment of gratuity amount – Held, No. 24.                       COMMISSIONER OF CENTRAL EXCISE v. VAHOO COLOUR LAB [2010] 2 GSTR 502(P&H) Ashutosh Mohunta & Mehinder Singh Sullar, JJ. [Decided on 3-2-2010] Finance Act, 1994 – Service tax – Photography – Works contract – Sale – Whether assessee is liable to pay service tax on value of goods/material consumed during processing of photography – Held , No. 25.                       ABAQUS ENGINEERING (I) LTD. v. ADDT.  COMMISSIONER [2010] 2 GSTR 387 (MAD) Jyothimani P, J [Decided on 18-1-2010] Finance Act, 1994 – Section 66A – Service tax – Services received from outside India – Whether taxable in the hands of Indian recipients before introduction of section 66A – Held, No. 26.                       FORCE MOTORS LTD. v. COMMISSIONER OF CENTRAL EXCISE [2010] 2 GSTR 316 (CESTATMUM) Ashok Jindal (Judicial Member) [Decided on 5-8-2009] Cenvat Credit Rules, 2004 – Rule 2(1) – Cenvat credit – Input services – Services rendered such as landing, parking and Xray and service tax charged by Airports Authority of India covered under definition of input services – Aircraft used by assessee for business activities-Whether credit to be allowed for service tax paid to Airports Authority – Held, Yes. 27.                       COMMISSIONER OF SERVICE TAX v. ATRIA CONVERGENCE TECHNOLOGIES P. LTD [2010] 2 GSTR 340 (KAR) Shylendra Kumar D. V. & Ananda N. JJ [Decided on 29-1-2010] Section 78 of the Finance Act, 1994 read with section 35G of the Central Excise Act, 1944 – Service tax – Penalty – Failure to pay tax – Finding that no suppression or misrepresentation of material facts by assessee – Finding of fact – Whether to be examined in appeal-Held, No. 28.                       BHARAT MINES AND MINERALS v. ASSISTANT COMMISSIONER OF CUSTOMS [2010] 2 GSTR 292 (AP) Goda Raghuram & Ramesh Ranganathan, JJ [Decided on 2-2-2010] Appeal – Condonation of delay – Tribunal dismissing appeal without condoning delay of 146 days in preferring appeal – Assessee having arguable case on merits but not setting out substantial reasons for condoning delay – Delay not inordinate – Whether Tribunal ought to have exercised discretion for condonation of delay on reasonable terms – Held, Yes. 29.                       SANJAY SURI V. STATE [2010] 157 COMP CAS 10 (DEL) V.K.Jain, J [Decided on 29-1-2010] Sections 209(6) and 217(1) of the Companies Act, 1956 read with sections 468, 469(1)(b) and 482 of the Cr.P.C – Failure by company to give proper disclosure in balance-sheet regarding collateral security and activities relating to export Prosecution initiated by ROC – Trial Court took cognizance of the offence-summons issued against the directors – Whether criminal proceedings can be quashed- Held, No. 30.                       INCABLE NET (ANDHRA) LTD. V. AP AKSH BROADBAND LTD [2010] 157 COMP CAS 30 (SC)] Altamas Kabir & Cyriac Joseph JJ [Decided on 7-5-2010] Companies Act, 1956 – Sections 397, 398, 402 and 403 – The JV company awarded the EPC contract to its major shareholder who failed to execute the project – Allegations that majority shareholder mismanaged operations of company under contract awarded to it by company – CLB and High court dismissed the petitions – Petitioner appealed to Supreme Court – Whether allegations constitute oppression and mismanagement – Held, No 31.                       DEEPAK LOHIA V. KAMRUP DEVELOPERS P. LTD [2010] 157 COMP CAS 82 (GAU) B.P. Katakey, J [Decided on 3-5-2010] Companies Act, 1956 – Sections 402 and 634A – Enforcement of order passed by CLB – Whether can be enforced as decree passed by civil court – Held, Yes. 32.                       OMAN INTERNATIONAL BANK S. A. O. G. v. AAIFR [2010] 157 COMP CAS 149(DEL) Sanjay Kishan Kaul & Valmiki J. Mehta JJ [Decided on 5- 5-2010] Sick Industrial Companies (Special Provisions) Act, 1985 – Sections 18, 19, and 22 – Scheme for rehabilitation – Financial concession by secured creditors – Objection by minority creditor to scheme – Whether minority creditors can frustrate revival and rehabilitation of sick industrial company - Held, No. 33.                       J. K. AGRI GENETICS LTD. v. FLORENCE ALUMINA LTD [2010] 157 COMP CAS 200 (CAL)] Patherya, J [Decided on 20-5-2010] Companies Act, 1956 – Sections 81(1A) and 391 – Demerger – Scheme proposing demerger and also conversion of preference shares and bonds issued under earlier scheme – Conversion resulting in issuance of further shares to promoters and benefiting such class of shareholders alone Whether procedure prescribed under section 81(1A) ought to be followed – Held, Yes. 34.                       CHIEF COMMISSIONER, LARGE TAX PAYERS UNIT, BANGALORE v. T. N. T. INDIA P. LTD [2010] 3 GSTR 23 (KAR)] Manjunath K. L. & B.V. Nagarathna, JJ [Decided on 16-4-2010] Finance Act, 1994 – Sections 73, 84 and 86- Service tax – Appealable orders – Letter of Additional Commissioner stating door-to-door international courier services not taxable – Subsequent letter informing previous clarification contrary to legal provision and directing assessee to discharge liability immediately – Whether an order appealable before Appellate Tribunal – Held, Yes. 35.                       QAMAR STEEL TUBES P. LTD. v. CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL [2010] 3 GSTR 59 (ALL) Rajes Kumar & Subhash Chandra Nigam, JJ [Decided on 7-1- 2010] Central Excise Rules, 1944 – Rules 52A and 57G – Modvat credit – Claim of credit on basis of original copies of invoices – Disallowance on ground Modvat credit to be claimed on basis of duplicate copy of invoice – Whether correct – Held, Yes. 36.                       SELVEL MEDIA SERVICES P. LTD. v. MUNICIPAL CORPORATION OF CITY OF AHMEDABAD [2010] 3 GSTR 134 (GUJ)] D.A. Mehta & H.N. Devani, JJ [Decided on 19-3-2010] Section 65(105)(zzzm) of the Finance Act, 1994 read with Sections 244, 245 and 386 of the Bombay Provincial Municipal Corporation Act, 1949 – Service tax – Sale of space for advertisement – Municipal Corporation granting permission to advertising agent for putting up advertising boards on private properties and collecting fees therefore – Whether taxable service – Held, No. 37.                       COMMISSIONER OF CENTRAL EXCISE  v. RAJEEV ELECTRICAL WORKS [2010] 3 GSTR 190 (P&H)] Ashutosh Mohunta& Mehinder Singh Sullar, JJ [Decided on 11-5-2010] Finance Act, 1994 – Section 65(39a) – Service tax-vice – Erection, commissioning or installation – Electrical contractor – Service of laying pipes in walls, roof or floor for crossing wires, fixing junction boxes, MS boxes, woodenboxes, fixing cable trays to lay cables, digging earth to lay cables and digging earth pits for earthing equipment – Whether taxable service – Held, No. 38.                       QUALIMAX ELECTRONICS P. LTD. v. UNION OF INDIA [2010] 003 GSTR 194 (DEL)] Badar Durrez Ahmed & V.K. Jain, JJ [Decided on 2-6- 2010] Central Excise Act, 1944 – Section 32E – Settlement of cases – Settlement Commission – Jurisdiction – Pendency of proceedings – Order despatched from office of adjudicating authority prior to date of settlement application – Whether the proceeding was pending at the time of approaching the settlement commission – Held, No. 39.                       KAMAL TRADERS v.  COLLECTOR OF CUSTOMS [2010] 3 GSTR 237 (BOM)] V.C.Daga & K.K. Tated, JJ [Decided on 23-2-2010] Customs Act, 1962 – Customs duty – Import – Definition of capital goods  – Import of compressors against licence – Compressors used as input in manufacture of air conditioners – Whether compressors purchased by importer are capital goods for actual users – Held, No. 40.                       COMMISSIONER OF CENTRAL EXCISE v. DRIES SHOES LTD [2010] 3 GSTR 259 (HP)] Surjit Singh & V.K.Sharma, JJ [Decided on 5-5- 2010] Rule 6(5)(vi) of the Cenvat Credit Rules, 2002 read with Rule 6(1), (6) of the Cenvat Credit Rules, 2004 – Cenvat credit – Exempted goods cleared for export under bond – Whether eligible to Cenvat credit – Held, Yes.

How to select the right ULIP ?

Source : Vishal    on  28 January 2011

:

ULIPs are the most miss sold products in the Personal Finance domain. ULIP plans are revolutions for those who are looking for insurance and assured return on their insurance investments.

 These insurance products along with assured tax returns are also linked with tax benefits. The assured return on insurance investments has impressed many investors.

In the conventional Insurance products, the insurance component takes edge over the saving component, but in ULIPs insurance cover is secondary focus, while focusing mainly on return pert of your investment.

 ULIP offers opportunity for investor to select a product which matches their risk profile. Depending upon the risk factor of the investor he can select any ULIP product.

ULIPs are more like Mutual Funds, in term of their functioning, payment of premium and declaration of units in terms of NAV.

Whenever you are going for ULIPs, you should be well informed about ULIPs. ULIPs are most evolved investment avenues, and thus making well informed decisions is the key if you want to invest in ULIPs.

Read following tips which can be informative for your ULIP investments.

1. Understand ing ULIPsIn market there is a wide range of ULIPs available and which makes ot difficult for the investor to choose correct ULIP.Before investing in any ULIP try to get as much as information on ULIPs. Be aware of what product you are choosing for your investment.

Understand all the terms and conditions clearly before investing in ULIPs. You should try to gather information on ULIPs from various source of information including web, and print media information from Insurance companies.

2. Focus on your need and risk profileChoose a plan which focuses on your need and risk. Risk profile should be deciding factor in choosing a ULIP. Depending upon your risk profile you should go for ULIPs option which suits you better.

3. Comparing ULIPs from various companies:All the insurance companies offer many ULIPs, and ULIPs varies on parameters like expenses,premium payouts and performance etc. ULIPs work on premium payments as opposed to sum assured in the case of conventional insurance products.Before investing in any ULIP you should compare it on the basis if performance of ULIP. 

You should evaluate ULIPs on the basis of what's performance of debt, equity and balanced schemes and performance of various portfolios.

 Expenses play a major role in ULIP so an assessment on this parameter is also necessary.Make some enquire about the top-up facility offered by ULIPs i.e. additional lump sum investments which can be made to enhance the policy's savings portion. 

This way policyholders will be able to increase the premium amounts, thereby providing presenting an opportunity to gainfully invest any surplus funds available.

4. Go for an experienced insurance advisorBefore doing any kind of major investments you should always select and financial advisor, who is having a through knowledge of insurance instruments. But make sure that the advisor who you are seeking is unbiased and independent; he should not be broker of some insurance company. 

You should also look for reviews of the financial advisor, from his previous clients and also check standards of his services.

It is very important that you should get a unbiased and independent advice on your ank kind of investments, so its always better to look for an advisor who asks for payments for his advice, because in that case, he will be working for your welfare not for the insurance company, whose products he will advice you. 

It is also very important that you should ask your advisor to provide you more services, rather than just filling and submitting the required forms.

About The Author:

Looking to advice on ULIPs log on to PersonalFN. PersonalFN provides Financial Planning,Investment Planning, Insurance planning and Mutual Fund Research and Recommendation services to investors, who are looking to invest in Mutual Funds in India. PersonalFN also provides Financial Planning Calculators and Wealth Tracker Software to track your investments.http://www.personalfn.com

Watch Out for Frauds, Maintain Secrecy: CVC to Banks

                    
 Source :Outlook  :NEW DELHI | DEC 07, 2010

Concerned over incidents of largescale frauds, the Central Vigilance Commission has directed all Chief Vigilance Officers of banks to maintain confidentiality of their passwords.

It has asked all CVOs to deal "ruthlessly" with people found to be careless and advised necessary action.

"It has been observed by the Commission that bank employees in certain cases are still not keeping secrecy of their passwords. Instances are still coming to the notice of the Commission where frauds of large amount have been committed by misusing the passwords of employees," the CVC said in a recent circular.

The Commission said it has to be ensured that all employees keep their passwords secret and change them as frequently as possible. The banks may evolve systems and procedures to ensure the same.

"Instances of casual approach by any password holder should be dealt with ruthlessly by the concerned bank and as the same may put huge funds at risk," the anti-corruption watchdog said in a communique issued to all CVOs of banks.

The Commission has asked the vigilance officers to regularly monitor the issue and report its compliance on a monthly basis.

Each bank issues passwords separately to its employees to ensure safe and trouble-free working.

Interestingly, the CVC noticed two cases of impersonation and sent a warning cum caution letter to all concerned organisations.

In a first instance, a person claiming himself to be K V R Reddy, IRS, Additional Commissioner (South), Central Vigilance Commission had visited the office of CVO, Union bank of India, Mumbai attempting to get details of some accounts pertaining to Hyderabad region.

Whereas, another person by the name and designation of Dr R Dayal Yadav, Director-Research and claiming to be working in the name of the President of India and under the lens of CVC was found to be sending e-mails to officers of Oil India Limited (OIL) and Numaligarh Refinery Ltd (NRL), Assam either asking for certain details or making a programme of visits or inspections.

"The persons (referred to above) are not associated with the CVC in any capacity whatsoever," it said asking all CVOs to exercise caution in entertaining such persons of dubious identity and inform all subordinate or field offices to be alert.

Will probe bank loans against 2G licences: CBI to SC

Source :CNBC-TV18:Friday, January 28, 02:30 pM

In a long overdue step, the CBI today raided the houses of Former Telecom Minister A Raja and seven of his key aides in connection with the 2G spectrum scam. Raids were conducted in 14 places in Delhi and Tamil Nadu. A CBI spokesperson said that search operations began at 6 am and 14 places have been searched so far.

Meanwhile, CBI’s Deputy Inspector General and Spokesperson Vineeta Thakur said that the searches have led to the recovery of incriminating documents.

Thakur said, "The CBI has today conducted searches of residential and official premises of the then Union Minister of Communications and IT. The then PS to Minister of Communication and IT, the then secretary, Department of Telecommunication, the then Additional Secretary, Member Telecom Commission, Department of Telecommunication, Deputy Director General, Access Service Wing, Department of Telecommunication and MD of a Chennai based export firm in connection with investigation in a case registered in connection with irregularities in the allotment of unified access services licenses. The searches started early in the morning and till now 14 places have been searched."

The Supreme Court today said that the ambit of investigations by the CBI into the 2G spectrum allocation scam needs to be widened. The court wants the CBI to investigate the events of 2001 when the NDA government introduced the controversial first-come-first-served policy for spectrum allocation.

Below is a verbatim transcript of CNBC-TV18's Ashok Bagariya's comments. Also watch the accompanying video.

The Supreme Court concluded its hearing in the 2G spectrum scam case and reserved its verdict. Secondly, and the most important thing that happened today was the Supreme Court turned the spotlight on the role of public sector banks on extending of loans to the companies that had got 2G licences. In fact the Supreme Court made very adverse and critical comments against banks saying that they had mortgaged the licences at very high prices.

The Supreme Court went on to say that one particular bank, State Bank of India, had extended a loan of Rs 10,000 crore to a company and that is one dimension which also needs to be looked into. To which, the CBI replied that they would forward this matter to the banking and frauds cell of the CBI which will look into it, and give the preliminary report to the Supreme Court as soon as possible.

But besides that, the enforcement directorate also submitted a status report to the Supreme Court in a sealed envelope. But the most important thing that really came was the ED telling the Supreme Court that as far as the 2G spectrum scam was concerned, the money had come in from 10 different countries and money also had gone from India to 10 different countries. So that was one aspect the ED was looking into.

And lastly and more importantly was the political aspect of this whole thing that the opposition which has been demanding a joint parliamentary probe into this whole telecom scam was caught in the crosswire today when the Supreme Court said that even the 2001 policy of the NDA government and the licences issued by the then NDA government needs to be probed. In fact the court directed the CBI that this whole policy when it started in 2001 should be the scam, should be investigated from that time and date.

Banks see more credit growth abroad than at home

Source :BL  :Priya Nair:Remya Nair:Mumbai, Dec. 8,2010

Lower interest rates, ample liquidity and a stronger rupee are prompting Indian corporates to borrow overseas. Due to this Indian banks that have a presence overseas are seeing higher credit offtake in their foreign branches compared with their domestic branches.

With more Indian corporates expanding overseas, Indian banks are focusing on their foreign operations in a more concerted manner.

Mr S. Sridhar, Chairman and Managing Director, Central Bank of India, said, “The 3G money is not coming into the system.

There are a lot of overseas borrowings. That is not getting reflected here (domestic credit). It is getting reflected abroad. Indian banks with branches abroad are doing a lot of business. They are giving money there,” he said.

State Bank of India, the country's largest bank is looking to increase the share of overseas operations in total profits from the current 15 per cent to around 25 per cent over the next three to four years, said Mr P. Chaudhari, Deputy Managing Director and Group Executive (International Banking), SBI.

Lower interest rates

Explaining the reason for strong overseas credit, he said, “There is very strong demand for overseas credit because interest rates in dollar, euro and other global currencies are lower. Not only are the interest rates in rupee high, but the rupee is also appreciating. A rupee loan will have both currency risk and interest rate risk.”

Mr Arun Kaul, Chairman and Managing Director, UCO Bank said corporates are raising money in the overseas markets as it is much cheaper. “There is huge liquidity globally and LIBOR has gone down substantially. Rupee has also not been depreciating. So it is cheaper for corporates to raise money in overseas markets”, he said.

At a recent banking seminar, the RBI Governor, Dr D. Subbarao, had said that Indian banks should increase their global footprint opportunistically even if they do not get to the top of the league table.

Opportunities

With the onset of the global financial crisis, there has definitely been a pause to the rapid expansion overseas of our banks.

Nevertheless, notwithstanding the risks involved, it will be opportune for some of our larger banks to be looking out for opportunities for consolidation both organically and inorganically, Dr Subbarao said.

“They should look out more actively in regions which hold out a promise of attractive acquisitions,” he added.

About SBI's overseas plans, Mr O.P. Bhatt, Chairman, said. “We are looking at it not only in terms of our balance sheet, but for our ability to help in a cross-country environment. We want to be able to provide Indian corporates the entire gamut of services for their overseas business – whether it is raising bonds or money, advising and mergers and acquisitions.”Bank of Baroda is looking to expand its presence overseas in geographies such as Kuala Lumpur, East Africa, and London, said Mr M.D. Mallya, Chairman and Managing Director. “We are looking at opening branches overseas in territories where we see potential,” he said.

Currently, the bank's overseas credit growth is about at 35 per, cent against 28-29 per cent growth in domestic credit, but this is because the base is smaller, Mr Mallya pointed out.

Encouraged by the scope for overseas business, Central Bank of India is looking to expand in Africa and Asia. The bank is looking at a branch in Hong Kong and a presence in Bangladesh, Sri Lanka, West Asia and Africa, Mr Sridhar said.

Indbank Merchant Banking Services' board approves merger of Indian Bank DP

Source :Capital Market / 14:59 , Dec 08, 2010

Indbank Merchant Banking Services has announced that the board has accorded approval for the proposal for the merger of Indian Bank DP with company's DP in accordance with NSDL regulations.  Indian Bank has accorded their approval for the proposal for transfer of Indian Bank Demat business to lndbank Merchant Banking Services in accordance with NSDL regulations.  Indian Bank Demat accounts will be transferred to Indbank Merchant Banking Services, after complying with the procedures and requirements in accordance with NSDL regulations.

Bank of America fraud settlement to go ahead

Source :Kuala Lumpur News:Wednesday 8th December, 2010


The Bank of America has agreed to pay nearly $140 million to settle a fraud case. 

The US Department of Justice has accepted a deal following a four-year investigation by US authorities into anti-competitive practices by the Bank of America in which employees rigged bids in the marketing of financial contracts linked to municipal bonds. 

The municipal bonds were sold by government departments, local councils and non-profit groups in the US to raise money for local services, including schools. 

Prosecutors said there had been a criminal conspiracy to rig bids on investments linked to the bonds. 

The Bank of America was the only financial institution to voluntarily admit to wrongdoing. 

It was granted amnesty from prosecution in return for cooperation in the investigation.

Banks mergers sealed in times of crisis may go out of CCI purview

Source :NEW DELHI:9 DEC, 2010, 06.04AM IST,
 SOUVIK SANYAL & DHEERAJ TIWARI,ET BUREAU 


 A government panel has favoured exempting crisis mergers between banks from the Competition Commission of India’s oversight, a decision that could boost the corporate affairs ministry’s efforts to get speedy Cabinet approval for the proposed merger norms. 

The committee of secretaries set up to clear the regulatory logjam over bank mergers, however, could not agree on the Reserve Bank of India’s view that all mergers between the country’s lenders should be kept outside the purview of the competition regulator. 

A recent meeting of the committee resolved to grant conditional exemption to bank mergers effected under emergency circumstances, said a senior government official present at the meeting. 

Corporate affairs minister Salman Khurshid had hinted on Tuesday that the merger norms may soon come before the Cabinet. The ministry has been under pressure from RBI on the issue. 

The corporate affairs minister had said recently that RBI’s concerns will be addressed before notifying the merger provisions under the Competition Act. Section 5 and 6 of the Act, which give overarching authority to the CCI on vetting M&A proposals beyond a certain value, are yet to be implemented even after a year of CCI’s formal existence. 

“We would want RBI to give us a clear definition of what would constitute a crisis merger,” said an official with the ministry of corporate affairs. 

The move is in conformity with the internationally accepted practice of exempting crisis mergers from the purview of competition regulators. 

The Competition Act, which does not provide any sectoral exemption for vetting mergers beyond a certain threshold, has taken RBI’s plea as an exception due to various reasons including CCI’s lack of domain knowledge on the sector. 

The meeting of the committee saw general consensus on keeping at least two kinds of banking M&A activity out of CCI’s purview. Recently, ICICI Bank bought Bank of Rajasthan in a deal valued at . 2790 crore, which was a clear case of crisis merger. 

“Mergers among sick banks or those facing crisis can be given some leeway,” said a government official who was involved in the discussion. The move assumes added importance due to the fact that the finance ministry is gearing up to introduce the Banking Laws (Amendment) Bill in Parliament. 

A draft cabinet note on the Banking Laws (Amendment) Bill, 2010 has proposed that all bank mergers should be kept away from the scrutiny of the CCI. 

“There is no reason for any scrutiny as we have a sectoral regulator in Reserve Bank of India , which allows any M&A only after due diligence,” said a finance ministry official, adding that there is no empirical evidence that it can lead to any anticompetition practices. 

The corporate affairs ministry is yet to form its opinion on the banking laws amendment bill. 

“We have not yet received any communication regarding this bill. Once we get that, we will give our opinion,” said the corporate affairs ministry official. 

“Any such move will be detrimental since there will be similar demands from other sectors,” he said. 

The CCI has distanced itself from the dispute, saying it is for policy makers to make a final call. “Ideally, all mergers including that of banks should get the CCI’s clearance. But for us to take a stand is not appropriate,” he said.

Rights issue- SBI

Source :TOI ::MUMBAI: 22 JAN2011




The State Bank of India (SBI) chairmanO P Bhatt on Saturday said the bank will not be able to raise Rs 20,000 crore from rights issue unless it receives government nod for the fund raising programme by the first week of February. 

"We are waiting for the permission from the finance ministry ... if it does not come by the first week of February, I don't think it can go through (in 2010-11)," he told reporters after announcing the quarterly results of the bank here. 

In case of some delay in government approval, he said, bank might seek waiver of norms from market regulator Securities and Exchange Board of India (SEBI) to ensure that rights issue goes through in the current fiscal itself. 

" SEBI can waive the mandatory time period under special provisions and if it does then the issue can take place in the current fiscal," he added. 

Bhatt also exuded confidence that SBI rights issue would sail through comfortably despite poor market sentiments witnessed at Bombay Stock Exchange and National Stock Exchange in the recent past. 

"There is no question of the issue failing as every existing investor of SBI will happily pick up the issue," the SBI chief said. 

SBI has been planning to raise resources through rights issue to augment its lending operations. 

India Police File Case Against Citigroup's Pandit, Other Executives

Citigroup says claims against executives including CEO Vikram Pandit,

 

shown in New York last month, "are completely without basis."

Source; ANANT VIJAY KALA & NUPUR ACHARYA:WSJ:JANUARY 4, 2011

MUMBAI—The Indian police Tuesday registered a case against top Citigroup Inc. officials, including Chief Executive Vikram Pandit, in connection with a estimated three-billion-rupee ($67.2 million) alleged fraud at a Citibank branch in a New Delhi suburb.

The move follows a complaint by bank customer Sanjeev Agarwal, who was allegedly duped in an investment fraud orchestrated by an employee of the Gurgaon branch of the U.S. bank.

The case begins the investigations into the charges leveled by Mr. Agarwal against Citigroup and the executives.

"We have registered a case of fraud on the basis of the complaint received from Agarwal," Dalbir Singh, assistant commissioner of police of Gurgaon, a satellite city of New Delhi, told Dow Jones Newswires.

In addition to Mr. Pandit, Mr. Agarwal's complaint names William R. Rhodes, who retired as senior vice chairman of Citigroup on April 30; Chief Operating Officer Douglas Peterson; Chief Financial Officer John Gerspach; and three others, including Shivraj Puri, the branch employee accused in the investment fraud.

Citigroup in a statement said the Mr. Agarwal's claims against senior executives "are completely without basis and we intend to contest them vigorously."

The bank said it identified the fraud and immediately reported the matter to the regulators and law-enforcement agencies.

"It was on Citi complaint that the Gurgaon police lodged an FIR [first information report] and are currently investigating the matter. Citi will continue to work with the authorities on this investigation," Citigroup said.

Assistant Commissioner Singh said police will investigate the charges and take further action. Mr. Puri was arrested last month and has been suspended by the bank.

Under Indian law, the police are required to register a first information report on the basis of any complaint received that appears to involve a crime. The FIR marks the beginning of the investigations into the alleged crime.

According to a copy of Mr. Agarwal's complaint seen by Dow Jones Newswires, Mr. Agarwal is accusing Mr. Puri of misappropriating about 324 million rupees between August 2009 and November last year.

Mr. Agarwal alleged that Mr. Puri redeemed the investments made with this money without Mr. Agarwal's consent.

Mr. Puri also allegedly sent false statements to Mr. Agarwal that showed the value of the investments made under the scheme at an inflated amount.

Mr. Agarwal is one of several investors who put in money in the scheme. On Sunday, the police arrested Sanjay Gupta, the chief financial officer of Hero Corporate Services, a Hero Group firm, for allegedly receiving commissions to invest Hero's money in the scheme.

The fraud came to light last month after Citibank noticed "suspicious transactions" at the branch.

Police said Mr. Puri, a relationship manager with the bank, lured customers with investment schemes promising high returns. These schemes weren't backed by the bank. Mr. Puri allegedly produced a fake letter of India's capital markets regulator Securities and Exchange Board of India to lend credibility to the scheme.

Investors allegedly were asked to deposit the money in accounts held by Mr. Puri's relatives and close associates. The money was later transferred to Mr. Puri's account and either withdrawn by him or invested in stock markets.

The scale of the fraud hasn't been fully ascertained, but police said it could involve as much as three billion rupees.

Write to Anant Vijay Kala at anant.kala@dowjones.com and Nupur Acharya atnupur.acharya@dowjones.com