‘Any Exclusion under Aadhaar Discriminatory’
Any exclusion under Aadhaar is discrimination, opponents of the unique identity programme contended in the Supreme Court on Tuesday, while urging it to set aside the scheme as it ‘violated’ Fundamental Rights guaranteed under Articles 14, 19, 21 and many other rights enshrined in the Indian Constitution. Appearing for those who have challenged the Aadhaar Act, senior advocate Gopal Subramanium argued that assigning a number to a citizen to identify oneself was against right to dignity. Even the mere suggestion that a citizen reveal oneself to claim a benefit was anathema to affirmative action, he said. A person’s existential identity and transactional identity were protected under the Constitution and were his inalienable rights. The state cannot insist that exercise of such Fundamental Rights would be conditional on such proof identification.
Fitch, Moody’s place PNB under review for downgrade
Global rating companies Moody’s and Fitch have raised doubts on the Punjab National Bank’s creditworthiness citing the country’s biggest banking fraud. Both of them have placed the bank under rating watch, a kind of scrutiny before a possible rating downgrade or a cut in outlook. Moody’s Investors Service has put under review for downgrade PNB’s local and foreign currency deposit rating of Baa3/P-3 and foreign currency issuer rating Baa3. “Likely financial impact of the fraudulent transactions is the key driver for the review for downgrade,” Moody’s said in a release on Tuesday.“The primary driver for today’s rating action is the risk of weakening of the bank’s standalone credit profile, as a result of the discovery of a number of fraudulent transactions.”
Law coming soon to ban unregulated deposit schemes
The Union Cabinet on Tuesday gave its nod for the introduction in Parliament of a comprehensive Bill to deal with illicit deposit schemes. The new Bill — The Banning of Unregulated Deposit Schemes Bill 2018 — provides for complete prohibition of unregulated deposit taking activity. It also provides for deterrent punishment for promoting or operating an unregulated deposit-taking scheme. There will also be stringent punishment for fraudulent default in repayment to depositors. The Bill will provide for designation of a competent authority by the State government to ensure repayment of deposits in the event of default by a deposit-taking establishment.
Rotomac bank fraud: I-T dept attaches 14 bank accounts
After the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED), the Income Tax Department has stepped up action against the Rotomac group and its promoters attaching 14 bank accounts in connection with an alleged tax evasion probe against them, officials said on Tuesday. While 11 accounts that are in various bank branches in Uttar Pradesh were attached last night, three were put under similar prohibitory orders last month, they said. The provisional attachment action has been carried out to “recover outstanding tax demands”, understood to be about Rs85 crore, they said. They added that while the 11 accounts frozen last night are in the name of the Rotomac group, the rest three are in the name of the Kothari family. The Kanpur-based group is being probed by the CBI and the Enforcement Directorate in connection with an alleged bank loan fraud of Rs3,695 crore, given by a consortium of seven banks.
Move to amend Act: Chit fund players see no reason to cheer
The Union Cabinet’s approval to introduce Chit Funds (Amendment) Bill, 2018 in Parliament has not gone down well with the Rs 45,000-crore chit fund industry of the country. Expressing disappointment, the apex body of chit fund companies, All India Association of Chit Funds (AIACF), on Tuesday said that the Bill in its current form will not solve the main purpose of bringing the unorganized players into the organized sector. It was of the view that the proposed amendment will not provide the desired investor protection, badly needed to safeguard public money. The Union Cabinet on Tuesday gave its nod to introduce the Chit Funds (Amendment) Bill, 2018, in Parliament. The Bill is aimed at facilitating orderly growth of the chit funds sector and removing bottlenecks faced by the industry.
India Inc improves on governance standards: IFC
Corporate governance standards of Indian Inc has improved in 2017, finds a new study. According to a joint study by IFC, a member of the World Bank Group, BSE and Institutional Investor Advisory Services India (IiAS), an advisory firm focused on corporate governance research, the Corporate Governance Scorecard for 2017 showed that companies (of S&P CNX BSE-100) aim to increase transparency and provide confidence to investors globally. The study suggests that more than 90 per cent of the Sensex 30 companies have provided adequate disclosures and inducted more women directors. The 2017 Scorecard highlights several areas of improvement for Indian companies including better clarity on effectiveness of policies, improvement in board effectiveness and enforcement of shareholder rights. The number of Sensex 30 companies giving detailed minutes of the annual general meetings, disclosures on succession planning and facilitating shareholder participation doubled in the last one year, the study revealed further.
Frauds are a growth industry in Indian banking
The CIBIL database has details of willful defaulters (a euphemism for those who have defrauded banks) with loans outstanding of over Rs25 Lakh, in which lawsuits have been filed. The total amount outstanding of these suit-filed accounts has gone up from Rs28, 416.93 crore as of 30 September 2013 to Rs1.11 trillion four years later, as of 30 September 2017. That works out to a compounded annual growth rate (CAGR) of 40.82%. Clearly, frauds are a growth industry. As of 30 September 2013, nationalized banks accounted for 32.8% of the total amount outstanding in these willful defaulter accounts. Four years later, their share had gone up to 58.7%. The CAGR of the amounts in these accounts with nationalized banks was a staggering 62.92%. For Punjab National Bank (PNB), the CAGR was an eye-popping 95.13%.
RBI issues new KYC norms for payments banks
The Reserve Bank of India (RBI) on Tuesday directed payments banks to get their customers’ information verified by third parties, in a blow to Bharti Airtel Ltd which runs a payments bank with customer data verified by its own telecom business. An RBI letter sent to chief executive officers of payments banks said “reliance on KYC (know-your-customer) done by telecom companies is not permissible”. Mint has reviewed a copy of the letter. The third party has to be regulated, supervised, monitored and should have steps in place for compliance with customer due diligence and record-keeping requirements, in line with the requirements of the Prevention of Money Laundering Act, RBI said.
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