IRDAI allows LIC to buy up to 51% stake in debt-ridden IDBI Bank
The Insurance Regulatory and Development Authority of India (IRDAI) board on Friday approved Life Insurance Corporation’s investment in IDBI Bank, allowing LIC to own up to 51 per cent in the beleaguered lender. LIC will now be able to pump Rs 100-130 billion into IDBI Bank in tranches through a preferential allotment of new equity shares at a price determined by a formula under the Securities and Exchange Board of India’s (Sebi’s) rules. However, IRDAI put some caveats and directed the insurer to bring down its stake in IDBI Bank over a period of five-seven years.
RBI to take action against erring bank auditors
The Reserve Bank of India has decided to put in place a framework to take appropriate action against banks’ Statutory Auditors (SAs) for any lapses observed in conducting the audit. The move comes in the backdrop of bad loans and frauds coming to light in the banking system in a big way in recent years. The central bank said this is in the interest of improving audit quality and with a view to instituting a transparent mechanism to examine accountability of SAs in a consistent manner. The framework would cover instances of divergence identified in asset classification and provisioning during the RBI inspection vis-à-vis the audited financial statements of banks.
Former IAS officer G. C. Chaturvedi appointed non-executive Chairman of ICICI Bank
Private sector ICICI Bank on Friday announced the appointment of former IAS officer GC Chaturvedi as an independent director and said his name has been proposed for the post of non-executive part-time Chairman. “The Board of Directors of ICICI Bank at its meeting held on Friday appointed Girish Chandra Chaturvedi as an Additional (Independent) Director effective July 1, 2018 for a period of three years subject to the approval of shareholders,” the bank said in a regulatory filing. The term of office of MK Sharma expires on June 30, 2018.
Sebi orders audit of Fortis Healthcare, SFIO suspect’s fraud
The findings of an investigation into Fortis Healthcare Ltd have exposed former promoters Malvinder Singh and Shivinder Singh to further legal trouble with Sebi initiating a forensic audit and the Serious Fraud Investigation Office (SFIO) suspecting fraud, two people with direct knowledge of the matter said. Markets regulator Securities and Exchange Board of India (Sebi) has ordered a forensic audit into the affairs of the company following suspicion of financial fraud of Rs. 473 crore. It believes the money was siphoned off by parties related to the former promoters.
RBI’s Sudarshan Sen warns bankers against non-compliance
The Reserve Bank of India (RBI) has given a long rope to bankers so far, but it now has zero tolerance for non-compliance, RBI executive director Sudarshan Sen told Mint’s banking conclave on Friday. Stressing the need for greater compliance with banking rules and regulation, Sen urged banks not to resort to creative solutions for non-compliance. “We have given a long rope in the past, but we are cutting the slack. And the banking regulation act enables RBI to take action not only against banks but also against bank officials,” said Sen.
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