3 banks under ED scanner for laundering

Source :NEW DELHI:PradeepThakur:TNN:Aug13,2011,06-58 am 




Government sleuths have zeroed in on massive cash deposits, running into around Rs 1,000 crore, in the Delhi branches of three large private banks - ICICI, HDFC and Axis Bank. 
The Enforcement Directorate is probing why the banks didn't alert authorities about huge cash deposits made by an accused who allegedly laundered more than Rs 1,000 crore to a third country in less than a year. 

Working on a specific tip about the suspect, Pankaj Kapoor, laundering huge cash on behalf of some politicians and industrialists, ED in the last week of June searched CP Vault Pvt Ltd, owned by Kapoor and seized Rs 10 crore in cash. His deposits of Rs 8 crore were frozen in bank accounts. 

Sources said Kapoor told ED officials he had deposited more than Rs 1,000 crore in the central Delhi branches of these three banks in the last nine months, with his average single transaction exceeding Rs 10 crore. 

Pankaj Kapoor, the suspect raided by Enforcement Directorate sleuths last month, has revealed his modus operandi for money laundering. Kapoor's CP Vault Pvt Ltd offers locker facility to industrialists in Delhi's Connaught Place area. His client list is virtually the who's who of industry. His alleged modus operandi was to collect cash, issue bogus diamonds trading bills, and remit the money to companies located in Dubai and from there to beneficiary accounts in a third country. 

An official spokesperson for the Axis Bank said: "CP Vaults doesn't maintain an account with Axis Bank. However, two related firms maintained accounts with us and on their behalf we have handled import remittances in the past. The prescribed procedures for receipt of cash and for imports have been adhered to by the Bank including regulatory reporting." 

An ICICI Bank spokesperson said, "The bank has adhered to all the norms laid down by RBI with regard to the transactions mentioned." While HDFC Bank spokesperson said: "We have stringent systems and processes in place that flag off any suspicious transactions. Needless to say these transactions get reported to appropriate authorities from time to time as prescribed under law." 

On his part, Kapoor maintained that he had been buying diamonds from Dubai and selling them to dealers in Surat and Mumbai in cash, an ED investigation revealed all the bills generated by him were bogus and he had actually not done any diamond trade. 

All the addresses and names of dealers provided by Kapoor in Surat and Mumbai were verified by ED officials and they, claim sources, turned out to be fake and in some cases dealers denied having ever done any trading with the accused.


 Sources said ED was likely to question the bankers about the deposits. As per the KYC (know your customer) guidelines issued by the RBI, it is mandatory for the banks to report all large cash transaction every month.

SBI to open 800 branches in 2011-12

Source:PTI:Aug 07,2011:Newdelhi
The country's largest lender State Bank of India (SBI) plans to open 800 more
more branches in 2011-12 taking its total network to over 14,000 branches.


."We are planning to open 700-800 branches in the current financial year against 650 set up during the last fiscal," SBI Managing Director and CFO Diwakar Gupta told PTI.

New branches would be spread across all the 14 circles, he said.

At the end March, 2011, the total number of branches was 13,542 while the number of ATMs stood at 20,084 across the country.

Besides, the bank is also looking at expanding its overseas network.

The bank would look at increasing its presence in the neighbouring countries and CIS (Commonwealth of Independent States) countries, he said.

SBI now has 156 offices across 32 countries, including the US, the UK, Singapore, Canada and Mauritius.

The focus of these offices is India-related business, he said, adding the overseas operations take care of international needs of the bank's foreign customers, in addition to conducting retail operations.

At present, the bank's overseas business contributes about 16 per cent to the bank's total business.

The number of foreign offices increased from 142 as on March 31, 2010, to 156 as on March 31, 2011, spread across 32 countries.

The offices comprises 45 branches, 8 Representative Offices, 93 offices of the six foreign banking subsidiaries and 10 other offices.

GOI plans to set up bank to finance women self-help groups

Source :FC: B Krishna Mohan Aug 07 2011 , Hyderabad:

The Government of India has plans to set up an exclusive bank to finance women self-help groups in the country, according to Union Rural Development Minister Jairam Ramesh.

“The proposal to set up an exclusive bank is on but will take some more time,” he said at press conference in Hyderabad on Saturday. The minister also promised support to Andhra Pradesh government’s plan to start an exclusive loan channel for SHGs. “We will support AP’s proposal not just morally and politically but also financially,” Ramesh said.

There were 2.5 million women SHGs in the country and they were getting loans to the tune of Rs 15,000 crore from commercial banks annually.

It may be recalled that Andhra Pradesh, which brought an Act last year to regulate the MFIs, has sought approval of the union government to float a non banking financial institution dedicated to meet the

microfinance needs of poor borrowers.

The proposed NBFC would have institutional ownership with both the state and central governments as key equity contributors. With initial capital of Rs 400 crore, it proposed to act as a for-profit organisation but lending at rates much below the rate given by MFIs.

Mandal Mahila Samakhyas, Andhra Bank and State Bank of India and National Bank for Agriculture and Rural Development are the other equity partners in the proposed NBFC.

Ramesh also said that Comptroller Auditor General of India has agreed to appoint an exclusive wing to conduct financial auditing of rural development ministry. The rural ministry spends about Rs 90,000 crore per annum, the second largest after the defence ministry and hence there is a need for a special audit, he said.

He said the social audit system in Andhra Pradesh was fairly strong.

Why a Loan Against Property is Beneficial ?

Source:Orson Dixon : Sat 06th Aug 2011
The Reserve Bank of India (RBI) always keeps a tight check on the loan against property segment of the lending business. And rightly so.


 It is the reckless borrowing and lending in this segment that happened in the US that brought the world to the brink of economic disaster. 


However, in India, the case is different. A 30%-35% margin requirement ensures that lenders are safe and prevents asset bubbles from brewing.


 It is with such policies that a loan against property becomes an asset for the responsible borrower. Here are the reasons why this is so.


Benefits of Loan Against Property


It is cheaper: A secured loan is always cheaper than an unsecured one. The obvious reason is that the lender has recourse to tangible property if you default. This is why loan against property can save you a lot of money in interest costs. A 2%-3% drop in the interest rates can save you close to Rs5,000/- to Rs7,000/- per month (assuming a principal amount of Rs50 lakhs). You could use these lower interest rates to get rid of some of the expensive overdraft facilities or factoring for your business or for personal reasons like a marriage in the family.


It is versatile: A loan against property is available for almost any purpose that you may desire funds for. The lender will not ask too many questions about the usage of funds. This also reduces the amount of paperwork required by significantly. You may have to declare your intention about using the funds, but it is neither mandatory nor legally binding. In most cases, it is just for the lender's knowledge, a mere formality.


 It is easily available: When a lender has a tangible security backing their loans, they have very little to worry about. No wonder a loan against property is available at express speed. It usually takes less than a week from your first point of contact to having the funds in your loan account. Professional lenders may do it over a couple of nights.


However, here is a word of caution for prospective borrowers. A loan against property is a good way to borrow at lower interests if you are in control of your finances, i.e., you are sure that you will be able to make the payments even in the worst conditions. Failure to make these payments can have very unpleasant consequences. Just like all financial instruments, it is a tool, use it wisely!


About Author 
If you are looking for a loan against property at attractive interest rates, with complete flexibility and brilliant service, log on towww.online.citibank.co.in. With their professional service and lightning fast execution, they can help you save on your interest costs.

MCA introduces Company Law Settlement Scheme, 2011 for default in filing of Annual Return, balance Sheet, P/L a/c, Compliance Certificate

General Circular No.59 /2011, Dated the 05^th Aug, 2011

Subject: Company Law Settlement Scheme, 2011

It has been observed that a large number of companies are not filing their due statutory documents (i.e. Balance Sheets and Annual Returns) timely with the Registrar of Companies. Due to this, the records available in the electronic registry are not updated and thereby are not available to the stakeholders for inspection. Further, due to not filing the documents on time, companies are burdened with additional fee, facing the prosecutions and being debarred from filing other documents electronically as provided in Circular No. 33/2011 dated 01.06.2011 also.

2. In order to give an opportunity to the defaulting companies to enable them to make their default good by filing such belated documents and to become a regular compliant in future, the Ministry, in exercise of the powers under Section 611(2) and 637B (b) of the Companies Act, 1956 has decided to introduce a Scheme namely, “Company Law Settlement Scheme, 2011,” condoning the delay in filing documents with the Registrar, granting immunity from prosecution and charging additional fee of 25 percent of actual additional fee payable for filing belated documents under the Companies Act, 1956 and the rules made there under. The details of the Scheme are as under:-

(i)     The scheme shall come into force on the 12^th Aug, 2011 and shall remain in force up to 31st  Oct, 2011.

(ii) Definitions – In this Scheme, unless the context otherwise requires, -

(a)       “Act” means the Companies Act, 1956 (1 of 1956);

(b)           “company” means a company registered under the Companies Act, 1956 and a foreign company falling under section 591 of the Act;

(c)         “defaulting company” means a company registered under the Companies Act, 1956 and a foreign company falling under section 591 of the Act, which has made a default in filing of documents on the due date(s) specified under the Companies Act, 1956 and rules made there under;

(d)        “designated authority” means the Registrar of Companies having jurisdiction over the registered office of the company.

(iii) Applicability: – Any “defaulting company” is permitted to file belated documents, which were due for filing till 30.06.2011, in accordance with the provisions of this Scheme:

(iv)    Manner of payment of fees and additional fee on filing belated document for seeking immunity under the Scheme – The defaulting company shall pay statutory filing fees as prescribed under the Companies Act and rules made there under along with an additional fee of 25 percent of the actual additional fee standardised under sub­section (2) of Section 611 of the Companies Act, 1956, payable on the date of filing of each belated document;

(v)      Withdrawal of appeal against prosecution launched for the offences- If the defaulting company has filed any appeal against any notice issued or complaint filed before the competent court for violation of the provisions under the Act in respect of which application is made under this Scheme, the applicant shall before filing an application for issue of immunity certificate, withdraw the appeal and furnish the proof of such withdrawal along with the application;

(vi)    Application for issue of immunity in respect of document(s) filed under the scheme - The application for seeking immunity in respect of belated documents filed under the Scheme may be made electronically in the Form annexed, after closure of Scheme and after the document(s) are taken on file, or on record or approved by the Registrar of Companies as the case may be, but not after the expiry of six months from the date of closure of the Scheme. There shall not be any fee payable on this Form;

(vii)      Order by designated authority granting immunity from the penalty and prosecution - The designated authority shall consider the application and upon being satisfied shall grant the immunity certificate in respect of documents filed in the Scheme;

(viii) Scheme not to apply to certain documents –

(a)    This Scheme shall not apply to the filing of documents other that following documents:-

Form 20 B - Form of filing annual return by a company having a share capital

Form 21 A – Particulars of annual return for the company not having share capital

Form 23AC & 23ACA – Form for filing Balance Sheet and Profit & Loss account

Form 66 - Form for submission of Compliance Certificate with the Registrar

(b)      This Scheme shall not apply to companies against which action under sub-section (5) of section 560 of the Act has been initiated by the Registrar of Companies;

(ix) After granting the immunity, the Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s);

3. At the conclusion of the Scheme, the Registrar shall take necessary action under the Companies Act, 1956 against the companies who have not availed this Scheme and are in default in filing of documents in a timely manner.

Yours faithfully,

(Kamna Sharma) Assistant Director

Be vigilant to check NPAs; don't choke credit: FM to banks

Source :PTI:Fri, Aug 05, 2011 at 16:25

Concerned over rising Non- performing Assets (NPAs) of public sector lenders, Finance Minister Pranab Mukherjee today said banks must tackle the problem seriously but without choking credit.

"NPAs in public sector banks have witnessed an upward trend. I had a meeting with chiefs of these banks and drew their attention. I asked them to take care of it. I told them not to choke credit but apply due diligence while sanctioning loans," he told the Lok Sabha during Question Hour.

The gross NPAs of the public sector banks have risen to Rs 78,119 crore as on June this year compared to Rs 44,039 crore in March 2009.

Mukherjee also asked the banks to follow a balanced approach and said there should not be any undue delay in sanctioning of loans.

He assured the House that Indian banking system was strong. "We have seen how the big banks in the world have collapsed (2008) like pack of cards, but Indian banks survived".

This doesn't mean that NPAs should be allowed to rise. "We are always vigilant. But we should not do anything wherein banks start refusing loans to needy," he said.

Expressing concern, Members said the NPAs were rising due to various factors like lack of proper due diligence while giving loans to firms and also rising interest rates.

Meanwhile, replying to a supplementary, Minister of State for Finance Namo Narain Meena said that risk management system has been strengthened and all possible precautions are being taken while sanctioning loan.