Nearly every Indian household has a bank account-Business Standard
Jan Dhan data suggest all but 23,000 households in India have access to banking services, but a large proportion of inoperative accounts and Aadhaar seeding remain a challenge
If the latest figures for the Pradhan Mantri Jan Dhan Yojana (PMJDY) are anything to go by, all but 23,000 Indian households have already been made part of the banking system - an impressive coverage for the government's ambitious financial-inclusion programme.
According to the PMJDY website, a little more than 127 million new bank accounts have been opened since launch of the scheme on August 28, 2014. Overall, that takes the number of households in the country with at least one individual bank account to 210.5 million.
According to the PMJDY website, a little more than 127 million new bank accounts have been opened since launch of the scheme on August 28, 2014. Overall, that takes the number of households in the country with at least one individual bank account to 210.5 million.
Banking on autonomHBL
Considering that the Centre has been routinely meeting the capital needs of state-owned banks in the past, its decision to infuse ₹6,990 crore into them this year would appear to be business as usual, but for its tightfistedness. ₹58,600 crore has been infused over the last four years (2011-14), with ₹14,000 crore in the last fiscal alone, into 20 public sector banks. This time, the amount is down to half the budgeted figure, and only nine banks will gain from recapitalisation. Given the lack of fiscal elbow room, the Centre’s decision to spend only half the ₹11,200 crore earmarked for recapitalisation in the Interim Budget isn’t surprising. What is striking, though, is the shift in the Centre’s criterion for selecting banks for infusion. Until last year, it was need-based: banks in dire need of capital to grow and meet their regulatory requirements got the money. Now, the Centre has adopted a new criterion — only banks that are more ‘efficient’, or have delivered above average returns over the last three years, will be rewarded with additional capital.
The move to nudge inefficient banks to put their house in order and fend for themselves is a step in the right direction, albeit long delayed. The sharp fall in profitability and stretched capital of state-owned banks can no longer be ignored. Bad loans have ballooned in the last three years, a symptom of lax prudential norms. Alarmingly, December quarter results indicate more pain ahead. This would have increased the outlays on recapitalisation of PSBs over the next couple of years. Against this backdrop, the Centre’s move to consider the Return on Assets (RoA) and return on equity to gauge efficiency is sound. Both these ratios measure how efficiently a bank manages its asset base or equity. Today, private banks average an RoA of about three times that of public sector banks. Asking PSBs to deliver returns on a par with their peer set is neither onerous nor unfair.
But that cannot be the end of the story. To materially improve PSB returns and efficiency, the Centre will have to hasten reforms to materially improve governance in PSU banks. External constraints, such as dual regulation, by the finance ministry and the Reserve Bank of India, board constitution, widening compensation differences with private sector banks, and so on need to be dealt with. For starters, there has to be transparency in the way PSU bank chiefs are selected; also, bank managements need greater autonomy in functioning. Reducing the government’s stake can be the first step towards creating a conducive environment for these banks to compete. But investor appetite can only be kindled if there is a change in the governance structure and confidence that profitability will improve. This will not happen unless the Centre creates a genuinely level playing field for the banks it owns.
Iran exports scam: UCO says eight firms received Rs 946 crore in advance remittances-DNA
"At the instructions of the Iranian banks, advance remittances for conducting future exports to Iran in total amounting to Rs 945.91 crore were released to the current accounts of eight companies. Out of the total advance payment received, Rs 374.67 crore were received by the companies before one year," UCO Bank said in response to a query from the stock exchanges in relation to reports in dna.
It was earlier reported in dna that eight foreign nationals including seven Iranians and one from Azerbaijan had visited India on student visas, created bogus companies in Chandigarh and opened accounts with UCO Bank to divert funds to Dubai and Iran, transactions which is now being investigating by the Enforcement Directorate.
It was also subsequently reported, quoting UCO chairman managing director Arun Kaul that ED has taken details of accounts and transactions from the bank over possible misuse of FEMA (Foreign Exchange Management Act) rules by exporters to Iran.
UCO, however, clarified on Wednesday that the payments don't involve any credit facilities from the bank.
"The payment is from the deposits of the Iranian Bank available with our bank and no credit facility is involved," the bank said in the statement.
Following the dna exposé, Reserve Bank of India on Monday directed banks to plug loopholes in export finance deals, especially when it comes to advance payments for yet-to-be-undertaken exports.
"An exporter receiving an advance payment for exports (with or without interest) from a buyer outside India shall be under an obligation to ensure that the shipment of goods is made within the stipulated period from the date of receipt of advance payment. As it has been observed that there is substantial increase in the number and amount of advances received for exports remaining outstanding beyond the stipulated period on account of non-performance of such exports. Category –I banks are advised to efficiently follow up with the concerned exporters in order to ensure that export performance (shipments in case of export of goods) are completed within the stipulated time period," RBI had said on Monday in a letter.
"In some cases of advance payments made to (Indian) exporters, exports have to be made within a year under FEMA guidelines. Probably, the parties didn't do that. That's why ED inquired about those accounts. They asked us to give details of those accounts and we have provided them," Kaul had said.
dna exclusive: Swiss banks penetrating India like never before: Whistleblower
Swiss bank HSBC Holdings Plc, which makes significant profits by handling secret accounts of politicians, top businessmen and diamond merchants with India connections, is not alone.In an e-mail query sent by dna, a whistleblower, Stephanie Gibaud, a former public relations officer of UBS France, told dna that several Swiss banks have penetrated Indian market in search of its wealthy clients, and there are many more accounts to be discovered.
She said Swiss banks expanded their networks right after the 2008 crisis in Europe. They shifted their teams and departments to BRICS (Brazil, Russia, India, China and South Africa) and other emerging nations in search of money bags.
She also explained her experience with UBS and the modus operandi of money deals. She raised questions on how Switzerland's assets under management have tremendously gone up since the 2008 crisis.
"Swiss banks have the same core business. What's true with HSBC is true with UBS and all their peers. Are any banks under investigation in India? Has India asked other private banks, such as Credit Suisse, UBS, Julius Baer, etc," she asked.She also raised an alarm regarding major cities like Mumbai becoming a hub for such banks to attract wealthy clients.
Is it easy for Indian government to get their details or money back?
The core business of the Swiss banks today is to target the BRICS nations because their relation is complicated with Europe and the US. I thus doubt that they would wish to cooperate.
Does UBS and other Swiss bank branches in Mumbai and other cities play a major role?
All client advisors from "onshore" locations are in contact with client advisors from "offshore" offices. If not client advisors themselves, then it's their desk heads (which means their bosses).
Is UBS involved in black money deals outside BRICS?
UBS has just opened its Nigeria office. You will get an idea once you touch base with Nigeria-based clients. This information is linked to investments from Asia, and also with 'blood diamond' stories (Nigeria is notorious for using tribal and poor people for illegal sale of diamonds to fund conflicts in war-torn areas), which brings me to the question why is UBS in Nigeria.
Do banks adopt separate strategies?
The strategy nowadays is not only for Indian clients but for clients across BRICS nations and developing countries. UBS has mentioned it in their communication and the media.
What is your experience with UBS?
I was organising exclusive events that were not just harmless entertainment but were in fact being organised to facilitate meetings for Swiss client advisers who were hunting for French clients to help them hide their wealth in order to cheat tax authorities. "I later discovered that I was part of something that was illicit."
Has Indian government ever approached you?
I offered to help Indian authorities and "explain very clearly" to investigators what strategy is used by the bank to approach clients, where and how they are approached and how "the bank penetrates all its networks everywhere on the planet and the focus is per country, per city, per network.
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