‘Business interest not driven by PMC Bank alone’

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Jaspal Bindra

The Reserve Bank of India (RBI) may have paved the way for the resolution of PMC Bank by granting an in-principle approval for small finance Bank (SFB) to Centrum Financial Services, but its executive chairman Jaspal Bindra says the business interest was not driven by PMC Bank alone. In an Interview with Ankur Mishra, he says the new bank is going to have all of the Centrum’s NBFC business, a good portion of BharatPe’s business, and PMC will also fold into the bank. He also says PMC Bank depositors will have to wait for clarity till the amalgamation scheme is finalised by the regulator. Excerpts:

What has been the reason for showing interest in PMC Bank?

We looked at it on a standalone basis and thought it (PMC Bank) is resolvable. We basically wanted to find a resolution which was better than liquidation for the lender. Our business interest was not driven by PMC Bank alone. We have looked at it as a bank which will also have PMC as a component. The new bank is going to have all of the Centrum’s NBFC business, a good portion of BharatPe’s business, and PMC will also fold into the bank. The reason for looking for a banking licence was to get a deposit franchise.

What was your proposal for the resolution of PMC Bank?

We are putting in some amount of capital. Now it is for RBI to draft a scheme and the government of India to approve it.

How much capital you are going to put into the new bank?

We have underwritten Rs 1,800 crore between partners (CFS and BharatPe), before we start diluting. Whether we dilute or not, Rs 1,800 crore is underwritten by us, of which Rs 500 crore will be there on Day one. Another Rs400 crore will be there within the first year, and other Rs900 crore will be available on tap from the partners. We will increase it as and when required depending on the growth of the business.

How will the procedure of acquiring PMC Bank work out?

Before we can amalgamate the PMC Bank, we will have to be an operational bank. Under Section 45 of the Banking Regulation Act, one can only prepare a merger scheme between two banks and therefore the process will start only once we have been converted into a bank. So, you need to necessarily become a bank first. Then an amalgamation scheme will be proposed to the government of India and then final notification will come after approvals.

How soon can we see small finance bank shaping up?

Our effort is to do as soon as possible, but there is some procedural time in terms of an EGM has to be called, and we have to incorporate our company. Some of these timelines are beyond our control. However, we are hoping to complete it as soon as possible. It will definitely happen within 120 days timeline.

You would have gone through the latest balance sheet of PMC Bank in detail. What are the immediate pain points and how you are going to deal with it?

In terms of pain points, there is a negative net worth and that is an issue in any financial institution. How I am going to deal with it? I cannot tell, because a lot of it will depend on what gets approved in the amalgamation scheme. So, the biggest pain point is the negative net worth which was created due to poor management and fraudulent transactions in the lending side. Otherwise, the bank was well known for good service. And that is what is really hurting depositors, because their money got misused.

What should PMC Bank depositors expect from new owners What is your intent to deal with depositors?

The intent is to start, we must get to a point which is better than liquidation. How much that will be dependent on the scheme.

Was there any discussion with RBI on PMC depositors?

Till this time, the clock was on standstill for PMC Bank depositors, and now at least the clock has started. Now, the question for depositors is when and how much they will be able to withdraw? I think after getting the licence we will be in position to discuss it with RBI.

How will you control PMC depositors moving out of the bank? What is the strategy there?

We will not want to stop PMC depositors. However, we will convince them that there is a new management and a new set-up. We will be able to manage things better. We will try that to an extent that is possible. However, one of the reasons we have been given licence is that if somebody calls for money, we will have to pay.

Is there any incentive you have planned for the depositors?

Over the next four months, we will be giving a thought to these kinds of things to create some incentives. Is there a way we can create some financial incentives? We will work on that. SFBs anyway pay higher than the market even today to depositors.

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Reserve Bank of India – Tenders

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The Reserve Bank of India proposes to call tenders for Appointment of structural consultant for design check, seismic analysis and repair, rehabilitation & retrofitting works of Bank’s Main Office Building (MOB) and its Annexe building, Ahmedabad and issuing certificate of structural safety and soundness of the buildings. Interested/desirous consultants, who strictly meet the pre-qualification criteria may respond.

2. The prequalification criteria and other details as well as format for submission of basic information can be downloaded from the RBI’s website (https://www.rbi.org.in/) under the section ‘Tenders’.

3. Last date and time for Submission of Tenders: Up to July 13, 2021, 03.00 P. M.

4. The Bank reserves the right to reject any or all tenders without assigning any reason thereof and no correspondence will be entertained in this regard.

Address

The Regional Director
Reserve Bank of India,
Ahmedabad

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Reserve Bank of India – Tenders

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1. Tenders by e- tendering process are invited for the “Comprehensive Annual Maintenance Service Contract for Operation & Maintenance of Sewage Treatment Plant installed at Staff Quarters, Baramunda”. The tender will be applicable for initial period of 7-months w.e.f. September 01, 2021 to March 31, 2022. However, the contract can be extended for further period of two years (one year at a time) subject to satisfactory performance of the successful bidder and adherence to contractual obligations by the service provider. 2. All pre-Qualification documents shall be uploaded with Techno-commercial bid (Part-I) on MSTC portal. Those who do not upload the Pre-qualification documents would not be considered for this tender process. Further, the contractor should submit the original of the documents to the Bank when demanded to qualify for further tendering process. 3. Only those firms who are GST registered and have minimum 5 years of experience in the field of work of similar nature and have executed three or more similar works individually costing not less than 40% of the estimated cost “OR” two works costing not less than 50% of the estimated cost “OR” one work costing not less than 80% of the estimated cost during the last 3 years ended March 31, 2021 and have a minimum yearly turnover of 100% of the estimated cost during the 3 financial years i.e. 2020-21, 2019-20 and 2018-19 are eligible for tender.

Similar works means undertaking the Comprehensive maintenance of environmental machines installed for recycling of Wastes, Sewage Water, etc.

4. Only those contractors will be considered eligible who will invariably furnish, at the time of applying for e-tender, the following information to satisfy the Bank about their eligibility for participating in the tendering process. 4.(a) Composition of the firm Full particulars (whether contractor is an individual, or a partnership firm, or a company etc.) of the composition of the firm of contractors in detail should be uploaded along with name(s) and address (es) of the partners, copy of the Articles of Association / Power of Attorney / any other relevant document. 4.(b) Work experience & Completion of similar works of specified value during the specified period. Copies of the detailed work order indicating date of award, value of awarded work, time given for completing the work, etc. and the corresponding completion certificates indicating actual date of completion and actual value of executed similar works should be uploaded in proof of the work experience.     The details along with documentary evidences of previous experience, if any, of carrying out works for the Reserve Bank of India at any center should also be given. 4.(c) Creditworthiness of the contractor & their Turn over during the specified period. Copies of the Income Tax Clearance Certificates / Income Tax Assessment Orders along with the latest final accounts of the business of the contractor duly certified by a Chartered Accountant should be uploaded in proof of their creditworthiness and turnover for three years i.e. 2020-21, 2019-20 and 2018-19. 4.(d) Name(s) & address (es) of the Bankers and their present contact executives Written information about the names and addresses of their bankers along with full details, like names postal addresses, e-mail IDs, telephone (landline and mobile) nos. fax nos., etc., of the contact executives (i.e. the persons who can be contacted at the office of their banker by the Bank in case it is so needed) should be uploaded. 4.(e) Details of bank accounts Full particulars of their bank accounts, like account No., type, when opened, etc. should be given. 4.(f) Name (s) & address (es) of the Clients and their present contact executives Information about the names and addresses of their clients along with full details, like names postal addresses, e-mail IDs, telephone (landline and mobile) nos. fax nos., etc., of the contact executives (i.e. the persons who can be contacted at the office of their banker by the Bank in case it is so needed) should be furnished. 4.(g) Details of completed works The Client-wise names of work(s), year(s) of execution of work(s), awarded and actual cost(s) of executed work(s), completion time stipulated in the contract (s) and actual time taken to complete the work (s), name(s) and full contact-details of the officer / authorities / departments under whom the work (s) was / were executed should be furnished. 4.(h) Client Certificates The tenderers are advised to upload the Client Certificate as per enclosed Proforma from at least two of their clients for whom they have carried out eligible works in terms of eligibility (Pre-qualification) criteria described in the notice inviting tender Client Certificates shall be accepted by the applicant / tender inviting authority of Reserve Bank of India only when the same are signed by an official of the rank of Executive Engineer or equivalent in respect of a Government / Semi Government organization or a PSU and only when they are supported by adequate proof of payment received by the tender for the work done by them. The client certificate issued by the private organization shall also accompany Tax Deducted at source (TDS) certificate. Applications / tenders received without the specified certificates in specified format shall be rejected and the Bank shall have the right to independently verify the submitted certificates, if felt necessary. 4.(i) Banker’s certificate The tenderers are advised to upload the Banker’s certificate from their banker / bankers as per the Annex-C. Such certificate shall be addressed to the application / Tender inviting Authority of the Reserve Bank of India and shall be submitted along with their application / tender. 4.(j) Registration Certificate – Shram Suvidha Portal The tenderers are required to upload the EPF/ESIC registration Certificates issued on Shram Suvidha Portal. 5. Interested tenderers have to upload relevant documents satisfying all the points as stated above along with techno-commercial (Part-I) bid of tender. The same Eligibility documents and the scanned copy of EMD should be uploaded with Techno Commercial Bid (Part-I) on the MSTC portal.

It is to be duly noted that the tender process shall be executed on the MSTC portal through e-Tendering.

6. In the event of intending tenderers’ failure to satisfy the Bank; the Bank reserves the right to refuse their participation.   Tender forms will be available for downloading w.e.f. June 21, 2021 from 6:00 pm. A pre-bid meeting will be held on July 20, 2021 at 11:00 am in the Estate Department, RBI Bhubaneswar.   Tenders form can be downloaded for viewing from RBI website www.rbi.org.in or www.mstcecommerece.com/eprochome/rbi. The pre-Qualification papers and scanned copy of proof of EMD payment should be uploaded with Techno Commercial Bid (Part-I) on the MSTC portal. The Demand Draft or Bank Guarantee for EMD should reach in original in a sealed envelope to Estate Department, Reserve Bank of India, Bhubaneswar by 02:00 PM on August 02, 2021. If paid through NEFT, the NEFT receipt should be uploaded along with pre- qualification documents. 7. Interested vendors/firms can participate in e – Tender after getting registration with www.Mstcecommerce.com/eprocurement/rbi). Online Part I – Techno-Commercial Bid and Part II – Price Bid shall be opened through www.mstcecommerce.com/eprocurement/rbi and applicable transaction charges have to be paid by the firm. 8.

Tender in prescribed format shall be uploaded on MSTC website. Part-I of tender will contain the Bank’s standard technical and commercial conditions for the proposed work, tenderers’ covering letter only.

The EMD of ₹ 14,066 (Rupees Fourteen Thousand Sixty-six only) (2% of estimated cost) should be submitted through NEFT transfer to A/C No-186004001, Reserve Bank of India, IFSC Code-RBIS0BBPA01, Branch Name – Bhubaneswar Or by a demand draft issued by a Scheduled Bank in favor of ‘Reserve Bank of India, Bhubaneswar’ Or in the form of an irrevocable bank guarantee issued by a scheduled bank in the Bank’s standard proforma which is available in the tender-form along with pre-Qualification documents.

Part-II of the tender will contain no conditions but Tenderer’s Price Bid, Bank’s Schedule of quantities, if any, only.

9. The schedule of the tender is as follows:   Activity Tentative date i. e-Tender no. RBI/Bhubaneswar/Estate/4/21-22/ET/4 ii. Mode of Tender e-Procurement System
(Online Part I – Techno-Commercial Bid and Part II – Price Bid through www.mstcecommerce.com/eprochome/rbi) iii. Estimated Cost ₹ 7,03,280 (Rupees Seven Lakh Three Thousand Two Hundred Eighty only) iv. Date of NIT (along with complete tender) available to parties to download – Tender activation on portal-Tender ‘Live’ for all June 21, 2021 @ 6:00 pm onwards v. Date & time for start of Off-line Pre-bid meeting July 20, 2021 @ 11:00 am vi. Earnest Money Deposit ₹ 14,066 (Rupees Fourteen Thousand Sixty-six only) vii. Tender Fees Nil viii. Transaction Fee
Please note that the vendors will have the access to online e-tender only after payment of transaction fees online. Payment of Transaction fee through MSTC Gateway/NEFT/RTGS in favor of MSTC Limited, as advised by M/s MSTC Ltd. ix. Last date of submission of EMD in the Estate Department of RBI, Bhubaneswar August 02, 2021 @ 02:00 pm x. Start Bid date – Date of Starting of e-Tender for submission of online Techno-Commercial Bid and Price Bid at www.mstcecommerce.com/eprochome/rbi July 21, 2021 @ 02:00 pm xi. Close Bid date – Date of closing of online e–tender for submission of Techno-Commercial Bid & Price Bid August 02, 2021 @ 02:00 pm xii. Part I Bid opening date August 02, 2021 @ 03:00 pm xiii. Part II Bid opening date Shall be informed separately to parties 10. Part-I of the tender will be submitted by the Tenderers in MSTC portal. The same will be opened by RBI on August 02, 2021 at 03:00 PM. Those tenderers, who would like to depute their representatives, may depute their representatives to Estate Department, Reserve Bank of India, Bhubaneswar for the same. Part II of the tender will be opened later. Due intimations will be given for the same. 11. The Bank shall obtain reports on the past performance of the tenderer from his clients and banker. The Bank shall evaluate the said reports before opening of the Part-II of the tender. If any tenderer is not found to possess the required eligibility for participating in the tendering process at any point of time and / or his performance reports received from his clients and / or his bankers and found unsatisfactory, the Bank reserves the right to reject his offer even after opening of Part-I of the tender. The Bank is not bound to assign any reason for doing so. 12. The Bank is not bound to accept the lowest tender and reserves the right to accept either in full or in part of any tender. The Bank also reserves the right to reject all the tenders without assigning any reason thereof.

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Reserve Bank of India – Tenders

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Department of Communication (DoC), Reserve Bank of India (RBI), 9th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001, invites proposals for selection of agency/agencies for preparing creatives for RBI’s multi-media, multi-lingual, pan India public awareness campaigns

The bidders intending to participate in the tendering process should submit their bids online as per the Tender Document, which may be downloaded from ‘Tenders’ section on RBI website (https://rbi.org.in) and MSTC website (https://www.mstcecommerce.com/eprochome/rbi/).

Important Dates:

Tender Start View Date: Monday, June 21, 2021 at 1600 hrs

Bid Start Date: Monday, June 21, 2021 at 1600 hrs

Bid Close Date: Monday, July 12, 2021 at 1500 hrs

Bid Opening Date and Time: Monday, July 12, 2021 at 1600 hrs

Note: Any further Addenda/Corrigenda/extension of dates, Clarifications/ Responses to bidders’ queries in respect of the above tender shall be posted on Bank’s website (www.rbi.org.in) only and no separate notification shall be issued in the press

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These Nifty Stocks Gave The Highest Dividend In FY21

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1. BPCL:

The divestment or privatization bound state-run oil marketing company announced the good dividend for the FY21 of Rs. 79 per equity share. Of which Rs. 58 has been announced as the final dividend for the FY while Rs. 21 was announced as the interim dividend. This turns out to be a healthy dividend yield of 16.63%, considering the last traded price of Rs. 475.05 per share on the NSE.

Also, it is being said that the proposal for 100 percent foreign direct investment (FDI) in oil PSUs can hasten the process of BPCL divestment/privatization.

2.	IOC:

2. IOC:

This is again a Nifty 50 stock that has paid a good dividend over the FY21. The company released two interim dividends of amount Rs. 7.5 and Rs. 3. In addition on May 20, while announcing Q4 and full year financial results, the oil marketing company announced a final dividend of Rs.1.5 per share. Thus taking the total dividend pay out for FY 21 to be Rs. 12 per equity share. Hence, the dividend yield considering the last share price of Rs. 112.65 comes out to be 10.65%.

3.	ITC:

3. ITC:

FMCG conglomerate with presence across verticals is known to be a good dividend paying stock. For the FY, the company’s dividend is as though Rs. 5 as interim and Rs. 5.75 as final, so dividend yield is 5.258%, considering the last traded price of Rs. 204.45 per share on the NSE.

4.	TCS:

4. TCS:

This is another Nifty stock that has topped the charts in terms of dividend pay-out. For the FY21, the company gave out dividends four times in amounts of Rs. 5, 12 and 6 while the last Rs. 15 has been given as a final dividend, taking the total dividend pay out for the FY 2021 to be 38. So, dividend yield for TCS turns out to be 1.16% taking the last traded price of Rs. 3273.10.

5. Infosys:

5. Infosys:

The IT company has in total announced the dividend of Rs. 27 in two installments, taking the dividend yield to be 1.8%. Infosys stock last ended at a price of Rs. 1500.3 per share on the NSE and it trades close to its 52-week high price of Rs.1515.80.

Note dividend yield of a company is compared with the industry average to which the company belongs.

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Reserve Bank of India – Tenders

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e-Tender No. RBI/Central Office/DIT/19/20-21/ET/753

Please refer to the tender notice for the captioned tender published on the Bank’s website www.rbi.org.in on May 11, 2021 inviting application from eligible vendors for the tender through e-tender on MSTC website (https://www.mstcecommerce.com/eprochome/rbi/) and the subsequent corrigendum. It has been decided to extend the timeline for submission and opening of the tender as mentioned below:

Sl. No. Tendering Process Revised Date and Time
1 Date and time of closing of tender for submission of Technical Bid and Price Bid June 30, 2021, upto 15:00 hrs
2 Date & time of opening of Technical Bid June 30, 2021, 15:30 hrs

* All other terms and conditions mentioned in the tender remain unchanged.

Chief General Manager-in-Charge
DIT, Central Office

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Small Finance Banks Lower Fixed Deposit Rates: Check New Rates Here

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Planning

oi-Roshni Agarwal

|

To establish their foothold in the market, Small Finance Banks began their operations by offering a higher rate on bank fixed deposits in comparison to most public run and private sector bank in the country.

Pointers to note if you are opening Fixed Deposit scheme with Small Finance Banks in India

1. Small Finance banks function as per the rules and norms laid down by the apex bank of the country i.e. RBI. But herein as the focus of these banks is primarily financial inclusion and they have a differentiated business, RBI came up with separate operating guidelines for them. Nonetheless other stipulations such as with respect to capital adequacy, CRR and SLR are to be adhered by these banks similar to commercial banks in the country. So, there are being administered and regulated at par with other private and public banking entities in the country.

2. Interest wise FDs at Small Finance Bank still offer a better rate with interest rate ranging between 5.6-6.75% for a 1 to 3 year tenure. In comparison, FDs at private and public sector banks offer a maximum of 5.3% for a similar tenure.

3. Deposits at Small Finance Banks similar to other banks in the country are insured by the DICGC or Deposit Insurance Credit Guarantee Corporation to the maximum of Rs. 5 lakh. So, as these term or fixed deposits at SFBs are also backed by an insurance of up to Rs. 5 lakh, investing in them shall be secure to the extent of insured amount.

1-Year FD Rates At Various Small Finance Banks

1-Year FD Rates At Various Small Finance Banks

Small Finance Bank New Interest rate for a 1-year FD Senior citizen FD rates Revised rate applicable from
Suryoday Small Finance Bank 6.5% 6.75% Effective from June 21, 2021
Capital Small Finance Bank 6% 6.5% June 3, 2021
Equitas Small Finance Bank 6.35% 6.85% June 1, 2021
Fincare Small Finance Bank 5.6% 6.1% May 17, 2021
Jana Small Finance Bank 6.25% 6.75% May 7, 2021
Utkarsh Small Finance Bank 6.75% 7.25% October 19, 2020

As can be analyzed from the table above, the maximum interest rate on a 1-year FD among Small Finance banks is offered by Utkarsh Finance Bank of 6.75% and similarly senior citizens are also able to fetch a better rate of over 7.25% per annum.

3-Year FD Rates At Various Small Finance Banks

3-Year FD Rates At Various Small Finance Banks

Small Finance Bank New Interest rate for a 3-year FD Senior citizen FD rates Revised rate applicable from
Suryoday Small Finance Bank 6.25% 6.5% Effective from June 21, 2021
Capital Small Finance Bank 6% 6.5% June 3, 2021
Equitas Small Finance Bank 6.35% 6.85% June 1, 2021
Fincare Small Finance Bank 6.25% 6.75% May 17, 2021
Jana Small Finance Bank 6.5% 7% May 7, 2021
Utkarsh Small Finance Bank 6.75% 7.25% October 19, 2020

Here for the FD tenure of 3 years also Utkarsh Small Finance Bank is topping the list with a return of 6.75%.

5-Year FD Rates At Various Small Finance Banks

5-Year FD Rates At Various Small Finance Banks

Small Finance Bank New Interest rate for a 5-year FD Senior citizen FD rates Revised rate applicable from
Suryoday Small Finance Bank 6.25% 6.5% Effective from June 21, 2021
Capital Small Finance Bank 6% 6.5% June 3, 2021
Equitas Small Finance Bank 6.25% 6.75% June 1, 2021
Fincare Small Finance Bank 6% 6.5% May 17, 2021
Jana Small Finance Bank 6.5% 7% May 7, 2021
Utkarsh Small Finance Bank 6.75% 7.25% October 19, 2020

Here it is worth mentioning that Suryoday Finance Bank has brought about a steepest cut for FDs of 5 year tenure as earlier a 5-year FD with the bank earned 7.25% return p.a.

Special FD schemes of Small Finance Bank

Special FD schemes of Small Finance Bank

Also, these small finance banks have rolled out some special tenure FDs that carry a slightly better rate. Say for instance, Capital Small Finance Bank offers 900 days FD that offers the highest rate of 6.25%. Likewise, Equitas Small Finance Bank offers the highest rate of 6.5% on 888 days deposit. Notably, 5-years 1 day to 10 years FD at the bank also offers the same rate i.e. 6.5%.

Utkarsh Small Finance Bank’s 700 days FD is the only one offering 7% return and for senior citizens the return on it is 7.5%.

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Reserve Bank of India – Press Releases

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The Reserve Bank of India (RBI) has imposed, by an order dated June 21, 2021, a monetary penalty of ₹1 lakh (Rupees One lakh only) on The Baramati Sahakari Bank Limited, Baramati (the bank) for contravention of the directions issued by RBI on Exposure Norms and Statutory/Other Restrictions – UCBs. This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by the RBI.

The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

The inspection report of the bank based on its financial position as on March 31, 2019, revealed that the bank had exceeded prudential inter-bank (single bank) exposure limit. Based on the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.

After considering the bank’s reply to the notice, oral submissions made during the personal hearing, the RBI came to the conclusion that the aforesaid charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/404

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Reserve Bank of India – Press Releases

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The Reserve Bank of India (RBI) has imposed, by an order dated June 21, 2021, a monetary penalty of ₹ 12 lakh (Rupees Twelve lakh only) on Mogaveera Co-operative Bank Limited, Mumbai (the bank) for contravention of the provisions of section 26-A read with section 56 of the Act, directions issued by the RBI on Maintenance of Deposit Accounts and Know Your Customer (KYC) Directions. This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (the Act), taking into account the failure of the bank to adhere to the aforesaid directions issued by the RBI.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

The inspection report of the bank, based on its financial position as on March 31, 2019, revealed that the bank had (i) not fully transferred unclaimed deposits to Depositor Education and Awareness (DEA) Fund (ii) not conducted annual review of inoperative accounts (iii) no system of periodic review of risk categorization of accounts and (iv) customers with multiple Unique Customer Identification Codes (UCICs) for multiple accounts and also multiple customers with same UCICs. Based on the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with and contravention of the provisions of the Act and the directions issued under the Act, as stated therein.

After considering the bank’s reply to the notice, the RBI came to the conclusion that the aforesaid charges of non-compliance with and contravention of the provisions of the Act and the directions issued under the Act were substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/405

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SBI to raise up to ₹14,000 cr via AT-1 capital

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State Bank of India’s Central Board on Monday accorded approval for raising fresh Additional Tier 1 (AT-1) capital up to an amount of ₹14,000 crore.

The fundraising, subject to the Government’s concurrence, will be through the issuance of Basel III compliant debt instruments in US Dollar and /or Indian Rupee during FY 22, India’s largest bank said in a regulatory filing.

During FY21, SBI mopped up ₹6,500 crore via Basel III compliant debt instruments under AT-1 and ₹20,931 crore via Tier – 2 capital, as per the bank’s annual report.

During FY21, the bank redeemed AT-1 Bonds aggregating to ₹200 crore and Tier-2 Bonds aggregating to ₹16,647.83 crore.

In the annual report, Dinesh Kumar Khara, Chairman, said: “The bank is comfortably placed in terms of growth capital. Opportunities for lending in promising sectors will be explored to diversify the portfolio and contain risk.”

Capital adequacy

The report observed that the capital adequacy of the bank improved during the last financial year on the back of better capital planning, internal resource generation and containment of risk in banking books as reflected in 202 basis point (bps) reduction in credit risk-weighted assets on advances to gross advances ratio.

The capital adequacy position of the bank improved from 13.06 per cent in March last year to 13.74 per cent in March 2021. The CET (Common Equity Tier) 1 capital and AT-1 capital ratios put together increased by 44 bps to 11.44 per cent.

The bank also increased its Tier-II capital base to 2.30 per cent in March 2021 from 2.06 per cent the previous year.

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