The constituents of the new panels remain the same: bureaucrats of the finance ministry, representatives of RBI and the so-called external experts.
Both the CBI and government-appointed panel found the procedures rotten, but has the government taken any step against the members of the old appointment committee who selected Jain?
Scrapping the list of selected candidates for the top posts in PSBs is welcome, but what about the accountability of the members of the panel who selected them?
Unless we change the selectors and radically overhaul the entire selection process, formation of sub-committees will not yield any result—this is nothing but serving old wine in a new bottle.
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It will be foolish to imagine of reforming PS banks by carrying out little surgery . Need of the hour is carry on thorough scrutiny of all processes and punish the guilty in all cases so that clear message is conveyed to all government officials, bankers and other concerned officials that corruption at any level will not be tolerated.
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Bank credit up just 1.76% in March-Sept: RBI-Business Standard
Mumbai, November 3,,, 2014:
Despite the boom in financial markets, the economy as a whole is yet to see a turnaround. This is borne out by the RBI’s latest credit deployment data, which show that growth in bank credit to almost all sectors has slowed.
In the six months between March 21 and September 19 this year — the bulk of which period also coincides with the term of the new government in office — gross credit of the banking system grew by a tepid 1.76 per cent (or by ₹99,700 crore versus ₹3,32,700 crore in the year-ago period).
Lack of credit demand from corporates and banks’ reluctance to lend to the sector in the face of rising non-performing loans dragged down the overall credit growth.
“We have not witnessed any up-tick in credit demand as corporates are still de-leveraging. It will take about a year or so for the government’s measures to impact the banking and financial sector,” said Bank of India Chairperson and Managing Director Vijayalakshmi Iyer.
In the same period, bank credit to industry decreased a tad. Industry constitutes about 43 per cent of the total bank credit. Within industry, medium and large enterprises contributed to the fall.
“Deceleration in credit growth to industry was observed in major sub-sectors, barring construction, glass and glassware, beverages and tobacco, and mining and quarrying,” the RBI said.
At the same time, priority sector loans by banks rose 1.4 per cent as banks lent more during the period to agriculture and allied activities and low-cost housing, the RBI data showed.
Agriculture
and allied activities got ₹55,400 crore of bank credit till September 19, 2014, compared with ₹20,100 in the year-ago period. Despite this, much of the agricultural sector remains outside the formal banking channel.
According to the RBI data, in the first six months of the current financial year, non-food bank credit grew only by ₹85,500 crore compared with ₹3,32,400 crore in the year-ago period. This segment comprises bank loans to the industry, services sector, personal loans and priority sector loans.
Rs6000 crore Fresh NPA of GTL Infra--Business Standard: 04.11.2014
A series of failed loan recast programmes continues to haunt banks. More than a dozen banks are now staring at Rs 6,000 crore of fresh non-performing assets, as GTL Infrastructure, a Mumbai-based company in the business of shared passive telecom infrastructure in the country, has failed to repay its restructured loans.
Sources claimed Indian Overseas Bank, one of the lenders to GTL Infra, had already classified its advances to the firm as NPA; other lenders were expected to follow suit. This is likely to deteriorate the already-stressed asset quality of banks.
GTL Infra is the latest addition to banks' failed loan restructuring programme list, which also includes Vijay Mallya-controlled Kingfisher Airlines. GTL Infra had opted for a corporate debt restructuring in September 2011, with SBI Caps as advisor. Like in the case of Kingfisher Airlines, banks had taken a hair-cut while restructuring their loans to the telecom infra firm.
SBI Caps had, in fact, helped GTL Infra raise syndicated loans from a group of banks in June 2010 to pay for Aircel Cellular's tower business. A year later, the loans were recast as part of efforts to help the company manage a financial crisis.
Banks had also converted a portion of the loans into equity as part of the restructuring package. But the company's shares have plunged from a high of Rs 44.10 in 2011 to Rs 1.34 apiece (according to BSE data), leaving banks without much scope to recover dues even through share sale.
P-Notes, Ponzi Schems And PE Should Be focused In Black Money Debate: Business Standard--04.11.2014
A lot has been said and written about the black money stashed abroad and ways of bringing it back. Surprisingly, not much of it is related to stock markets. People have tended to focus on "Swiss accounts" as that resonates with the average Joe more than other convoluted methods of storing and laundering ill-gotten money. But, if Prime Minister Narendra Modi's promise of 'Black Money Mukt Bharat' (He didn't say it in as many words, I'm just helping him with a new acronym: BMMB) is to materialise, the efforts and debate have to grow beyond the narrow "Swiss accounts".
In fact, it is highly likely that most of the black money is neither in Switzerland nor lying in an "account". It can take the form of a high-end property in Southeast Asia, a cruise ship floating on the Mediterranean or shares of a blue-chip company held through an offshore fund manager.
The white paper on black money prepared by the finance ministry under the then finance minister Pranab Mukherjee in May 2012 had a boxed item on participatory notes (P-notes or PNs). "These instruments are traded overseas outside the direct purview of Sebi surveillance, thereby raising many apprehensions about the beneficial ownership and the nature of funds invested in these instruments. Concerns have been raised that some of the money coming into the market via PNs could be unaccounted wealth camouflaged under the guise of FII investment. Sebi has been taking measures to ensure that PNs are not used as conduits for black money or terrorist funding," the white paper said. Sebi has since tweaked disclosure norms and the entire framework for foreign investments has been rejigged and renamed as foreign portfolio investors.
Interestingly, 10 months later, P Chidambaram, who took over as finance minister after Mukherjee moved to Rashtrapati Bhavan, told the Lok Sabha, "Sebi and the Directorate of Enforcement, which have a regulatory role in the matter, have not come across any instances of PNs being used for money laundering." He added, "FIIs are also required to provide an undertaking that they have not issued the PNs to Indian residents or non-resident Indians and KYC compliance norms have been followed for the beneficial owner of the PN." How genuine and truthful are these undertakings given by FIIs? What are the chances that a wrong undertaking is detected? How many have been punished for wrong undertakings? Does this make "violation" a profitable business proposition? As of September, assets held through P-notes stood at Rs 2.22 lakh crore.
Many private equity funds investing in India also use tax havens and complicated structures. The ultimate investor in these funds is also obfuscated through multiple funds and offshore accounts. For example, when the International Consortium of Investigative Journalists (ICIJ) put out a list of offshore accounts held by people of various nationalities, one could clearly see links between Indian residents and offshore funds, which in turn invested as limited partners into India-focused private equity funds. Sebi has laid down a framework for Alternative Investment Funds. But, many foreign-domiciled PE funds do not register with Sebi.
Lastly, a lot of black money is laundered through numerous investment schemes floated across the countryside. Often, investors are either not traceable or fictitious. It is again likely that some big fish is laundering through these schemes. Sebi, which has worked over the past couple of years to build a nationwide network of branches, approaches it from the investor protection viewpoint, but someone needs to attack these wearing a "black money lens". That's my two cents for a BMMB by 2019.
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