Sunday, August 31, 2014

Bank of Baroda Fined By Court

Bank told to pay Rs1Lac  relief over loan bungle

The Thane district consumer dispute redressal forum recently held Bank of Baroda, Mumbai, responsible for causing mental agony to one of its customers and asked the bank cough up a compensation of Rs1 lakh. While the bank is required to pay the money to the customer within 45 days, it will also have pay the complainant Rs 10,000 towards legal expenses.

As per the complainant, Jayprakash Kushwaha, a resident of Nalasopara, had approached Bank of Baroda for a home loan of Rs3,13,000. Kushwaha had purchased flat owned by Rahul Lokhande, the cost of the house was Rs4 lakh. Kushwaha had paid a token amount of Rs 87,000 to Lokhande and promised him to pay the remaining amount once loan formalities were cleared.

Meanwhile, Kushwaha applied for loan. The bank had asked Kushwaha for basic documents before processing his loans. Accordingly the complainant, bank gave clearance for loan on April 12, 2007, thus informing him that the loan will be disbursed within a small period of time. Bank also promised that the said loan amount will be directly transferred to Lokhande's bank account.

"However even after paying for the bank fees, the bank failed to clear the loan amount. Finally when the complainant approached the bank asking for a clarification for the same, the bank officials claimed that they had misplaced the loan file and hence the loan was not cleared," reads the complainant's version.

Aggrieved by the bank's negligent attitude, the complainant approached the forum in August 2008 and filed a complaint. The forum after going through the complaint, asked the bank to file its reply.
The bank in its reply claimed the one of the document, which the complainant submitted was allegedly forged document, and thus the loan was canceled.


 The forum after going through the evidence, said that if bank felt that the documents were forged, then, it should have informed Kushwaha before issuing loan clearance letter to the complainant. It held the bank responsible of its negligent and careless behavior towards its consumer. The forum asked the bank to decide on the loan transaction within a period of 30 days.

Reserve Bank shouldn't see things the same way as govt, Raghuram Rajan says-Times of India

MUMBAI: Reserve Bank of India governor Raghuram Rajan has dismissed talk of a growing wedge between him and the NDA government, saying, "The press always wants to find something interesting. Small things are blown up."

At the same time, he added, "I don't think it's good for RBI to see everything in the same way as the government does. We are the keepers of stability, and therefore the government actually relies on us to stop them sometimes."

In the course of an hour-long interview with TOI earlier in the week, Rajan said, "We understand there is a need for growth and there are certain actions needed to push growth. It may have some effect on stability. There may be trade-offs on how much risk of instability are we prepared to tolerate in order to get more growth."

Although Rajan and finance minister Arun Jaitley have put up a unified front, it's being said in certain quarters that the government is keen that RBI should cut rates to spur growth, but the central bank is being cautious for fear that such a move might stoke inflation.

 The 51-year-old economist with a storied track record acknowledged that the situation in public sector banks was "of concern", but "not scary", and called for an overhaul of the governance structure, including a review of the appointments process to cut out corruption.

Sitting in his 18th office overlooking the Arabian Sea, Rajan, who completes a year in office in a few days, said privatisation of staterun-banks was not the sole solution to improve corporate governance standards. He spoke of a report commissioned by the RBI which has suggested ideas such as splitting the chairman and MD posts, induction of professionals and greater autonomy for bank boards.

'Must pay price to build good systems'

"All that needs to be done is to change the process of appointment (of heads of banks). For example, when you are putting someone in charge of Rs 5 lakh crore of assets you need an appointment process that is state of the art," Rajan said amid a string of controversies that have engulfed state lenders, including the arrest of Syndicate Bank chairman and MD SK Jain on bribery charges.

http://timesofindia.indiatimes.com/Business/India-Business/Reserve-Bank-shouldnt-see-things-the-same-way-as-govt-Raghuram-Rajan-says/articleshow/41297374.cms

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