The Bombay High Court has issued notice to the Reserve Bank of India in connection with a PIL which alleges that the non-performing assets (NPA) of nationalised banks swelled up from Rs 455 crore for the year ended March 2008 to Rs 9,190 crore in March 2012.
However, according to the RBI annual report, gross NPAs for public sector banks for FY 14 stood at 4.7 per cent of gross advances, or approximately Rs 2.8 lakh crore.
Justices AS Oka and GS Kulkarni gave the direction while acting on a PIL filed by activist Ketan Tirodkar, seeking directions to the RBI to register a case with the CBI to probe into the “fraudulent sanctions” leading to such huge NPAs. Once the borrower has failed to make interest or principal payments for 90 days, the bank loan is considered to be a NPA.
Relying on RTI replies obtained from the RBI, Tirodkar told the HC that there were over 140 cases of fraud of around Rs 15 crore each reported to the CBI by various banks between the years 2008 and 2012. However, he alleged, there was no information about whether or not cases of NPAs were registered with the investigating agency. Nationalised banks have not complied with the Banking Regulation Act, 1969, which mandates periodical submission of audit reports to the RBI, alleged the petitioner
. “The Act is not complied with in order to suppress the NPA scenario and shield the culprit beneficiaries working in collusion with the banking authorities,” the PIL alleged. The involvement of bank authorities commences at the stage when a would-be defaulter approaches the bank to extract a loan against a flimsy proposal / asset with the intention to dupe the bank in future, said the PIL. While stating the “modus operandi” of banking authorities, the petitioner said they act in connivance with the future defaulters, decorate artificially the feasibility report, to sanction the proposal.
“The NPAs start accumulating at the end of the quarter which goes unreported to the RBI for a long time. Subsequently, such huge volumes of NPA, when they finally get reported to the RBI, have passed the stage of correction, and the RBI and the banks are forced to either write them off completely or to settle them for peanuts,” Tirodkar claimed. While issuing the notice, the HC has posted the hearing on December 9
Link Financial Express
Andhra Bank chief hits the streets to boost biz-HBL
In a novel move, a public sector bank chief went from shop to shop in a business area in a marketing campaign.
CVR Rajendran, Chairman and Managing Director, Andhra Bank, along with a team of officials, undertook the exercise, covering over 350 shops/business establishments in a commercial area in Hyderabad.
“We have launched a shop-to-shop campaign to market credit and current account facilities among businesses. But as some staff were either shy or slow, I told them I would also join them, and we almost covered every shop, over two hours,” said Rajendran in a chat with BusinessLine.
Andhra Bank plans to continue this marketing initiative in important business centres in major cities/towns involving both top executives in the general manager cadre and lower-rung officials.
The campaign also doubled up as a customer survey as every businessman was asked details of his bank account, what he expects from his banker, and so on.
“We have got very good feedback. I understand that most of them have accounts with private banks because of the facilities they were offering long back. But now, public sector banks like Andhra Bank also offer them, which has to be communicated to them properly,” he said. Another takeaway was the need for cash-swiping machines (point-of-sale terminals) for businessmen, he said. The bank has decided to focus on this unmet need by providing the machines to the shop-owners.
Cash flow
It was noticed that the day-to-day cash-flow from unorganised business establishments is weak as many a bank’s working hours are not conducive.
Andhra Bank sees good scope in this segment by ramping up its cash-deposit machines in select shop.
“We have ordered 1,200 machines and 120 have already arrived. We will be installing them on a priority basis,” Rajendran said.
Cap of 3 free ATM transactionsmay apply in cities near metros
If you are staying in a city abutting one of the six metros then you may not get to enjoy the convenience of five free transactions a month at other bank ATMs in the city of your residence.
Reason: banks are planning to consider cities lying on the outskirts of the six metros as part of the metros and rationalise the number of free transactions (from five to three per month) with effect from November 1.
In August, the RBI had identified six metros — Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad — for the purpose of rationalisation of the number of free transactions for savings bank account customers at other banks’ ATMs.
The central bank also said that at other locations — other than the six metro centres mentioned above — the present facility of five free transactions for savings bank account customers will remain unchanged.
This reduction will, however, not apply to small / no frills / Basic Savings Bank Deposit account holders, who will continue to enjoy five free transactions.
With the RBI asking banks to determine the jurisdiction of the six metros, bankers are of the view that since cities on the periphery of the metros have also seen proliferation of ATMs such areas too should be included within the jurisdiction of metros.
Uniformity in application
According to a senior State Bank of India official, banks are jointly drawing up jurisdiction of the six metros to ensure that there is uniformity in the applicability of free transactions at other bank ATMs.
According to a senior State Bank of India official, banks are jointly drawing up jurisdiction of the six metros to ensure that there is uniformity in the applicability of free transactions at other bank ATMs.
What this could mean is that for the purpose of rationalising the number of free ATM transactions Thane and Navi Mumbai will be considered as coming under the jurisdiction of the Greater Mumbai urban agglomeration (metro).
Similarly, Gurgaon, Ghaziabad, Noida and Faridabad will be considered as coming under the Delhi urban agglomeration; and Howrah, North and South Paraganas under the Kolkata urban agglomeration.
According to National Payments Corporation of India (NPCI) data, as at September-end 2014, the number of ATMs in the country stood at 1,80,494. Of these, about 97 per cent belonged to direct member banks of the Corporation’s National Financial Switch.
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