Tag: directors

UP police files FIR against SREI promoters, directors

Banking & Finance

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The Uttar Pradesh police has registered a first information report (FIR) against crisis-ridden SREI Group’s promoters and directors of its certain companies for an alleged bank fraud. The FIR was registered at a police station at Kautwali Jaunpur, Uttar Pradesh on the basis of a complaint filed by one Bhupendra Nath.

The Jaunpur police station has now forwarded the matter to the Economic Offences Wing (EOW).

The Jaunpur Police has, in the FIR, named 22 directors and promoters of SREI Group under U/S-420/ 467/ 468/ 471/ 474/ 476/ 323/ 504/ 506/ 511 R/w-120-B of Indian Penal Code.

When contacted, brothers Hemant Kanoria and Sunil Kanoria, former promoters of SREI Infrastructure Finance, said they were not aware of any such FIR.

It maybe recalled that the Reserve Bank of India had, on October 4, superseded the board of SREI Infrastructure Finance Ltd (SIFL) and SREI Equipment Finance Limited, owing to governance concerns and defaults by the the two companies in meeting their various payment obligations. Rajneesh Sharma, Ex- Chief General Manager of Bank of Baroda, was appointed as Administrator of these companies.

FIR COMPLAINT

The FIR has been registered upon the complaint of one Bhupendra Nath who went to Srei-run Jan Suvidha Kendra for some work, and there he was allegedly duped by the employees of Srei. Bhupendra Nath found that many alleged criminal activities were being carried out at the Jan Suvidha Kendra, including bank fraud of more than ₹16,000 crore. He also reported the fact that at the Jan Suvidha Kendras, money was charged at the whims and fancies of the employees and the amount varied from ₹1,000 to ₹2,5000 for the works which are either free or for which a very nominal fee of not more than ₹100 is charged.

Initially, he filed the police complaint and seeing no effective action he approached the court with 4,000-5,000 pages documentary evidence; upon which the Chief Judicial Magistrate ordered the registration of FIR against the accused persons. The 29-pages of the FIR covers detailed methodology as to how the Jan Suvidha Kendras are run and also how the alleged bank fraud to the tune of ₹16,000 crore was perpetrated through such Kendras.

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AIBEA wants director posts filled in all public sector banks

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The All India Bank Employees’ Association (AIBEA) has urged the finance ministry to expedite steps to fill the vacant posts of directors in nationalised banks. It claimed that the bank boards were functioning with skeletal strength.

CH Venkatachalam, General Secretary, AIBEA, said in a letter to Finance Minister Nirmala Sitharaman, that 52 per cent of the director posts in the 11 nationalised banks were vacant.

The vacancies would defeat the purpose of these important posts — namely, taking care of the varied interests of banking operations, he said.

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“It also runs counter to the much-professed principles of good governance,” he said.

According to the association, the posts of Workman Director and Officer Director, representing the employees and officers of the banks, respectively, were incorporated in 1970 and had remained filled for 44 years without interruption.

Since 2014, however, when the NDA government came to power, these posts have stayed vacant, the letter added.

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Venkatachalam emphasised that the association had submitted a panel of names to the banks concerned and the government, as prescribed, but none had been appointed all these years.

The association has learnt that the names it proposed “have been duly recommended by the concerned Banks to the Department of Financial Services in the Ministry of Finance, Government of India, and all these proposals and recommendations are pending consideration by the Government”, he wrote.

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RBI raises loan limit to Directors on bank boards to Rs 5 cr, BFSI News, ET BFSI

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Mumbai, The Reserve Bank of India (RBI) has raised the limit of loan that can be given by banks to a Director on the board of a bank to Rs 5 crore from the previous cap of Rs 25 lakh.

In a circular issued on Friday, the central bank said that unless sanctioned by the Board of Directors or the Management Committee, banks should not grant loans and advances aggregating Rs 5 crore and above to any relative other than spouse and minor or dependent children of their own Chairmen and Managing Directors or other Directors. Same would be the rule in terms of relatives of Chairman or Managing Director or other directors of other banks.

Further, any credit facility given to the Directors and relatives of Directors have to be sanctioned by the appropriate authority in the financing bank, and the matter has to be reported to the board, it said.

Board approval would be required for loans given to major shareholders of the bank, or his relatives, where the shareholder holds more than 10 per cent in the bank.

There have been instances in the past wherein existing Directors allegedly misused their position to grant loans to favour their family members, as in the case of the former ICICI bank MD & CEO Chanda Kochhar who is alleged to have misused her official post to grant a massive Rs 3,250 crore loan to Videocon.

Allegedly, the loan was part of a quid pro quo arrangement under which Venugopal Dhoot invested Rs 64 crore in Chanda Kochhar’s husband’s NuPower Renewables.



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RBI ups threshold for personal loans given by a bank to directors of other banks

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The Reserve Bank of India (RBI) has upped the threshold up to which a bank can grant personal loans to any director of other banks by 20 times from ₹25 lakh to ₹5 crore.

The upward revision in the threshold is aimed at reflecting the increase in general prices, encourage professionals with the expertise to join the boards, and reduce the cases requiring approval at the board/management committee level without diluting the regulatory intent. The ₹25 lakh threshold was fixed way back in 1996.

However, the RBI said unless sanctioned by the board of Directors/Management Committee, banks cannot grant loans and advances aggregating ₹5 crore and above (hitherto ₹25 lakh and above) to any relative (other than spouse) and dependent children of Chairmen, Managing Directors or other Directors of their own bank as well as other banks.

The central bank said the proposals for credit facilities of an amount less than ₹25 lakh or ₹5 crore to these borrowers may be sanctioned by the appropriate authority in the financing bank under powers vested in such authority, but the matter should be reported to the board.

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Shareholders to file plaints against directors of Madgaum coop bank, BFSI News, ET BFSI

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Shareholders of the Madgaum urban cooperative bank on Sunday took a resolution to file criminal complaints against the board of directors of the bank and take legal action if FIRs are not registered.

Shareholders of Madgaum urban bank had the meeting after the AGM of Dec 26 that was adjourned to Jan 10 was cancelled by the BoD.

They also resolved to demand a list of defaulters and all details as promised in the AGM on December 26 within ten days.

If the list is not provided within the stipulated time, then the shareholders have resolved to gherao all directors at their place of residence or work to force them to resolve the crisis.

The shareholders stated that they must be provided with a list of movable properties, immovable and collateral securities and liquid cash with the bank as on date.

The staff of the bank must be reduced, especially contract staff, and the bank must cut down on its rent they stated.

The shareholders also resolved that the bank should resolve the locker issue by adopting an easy legal procedure as those who have lockers are facing a problem accessing them and stated that the bank must support them to find a solution to it as it doesn’t come under the purview of the RBI.

The shareholders appealed to directors to support them and inform them of the discrepancies of other directors instead of hiding it from them.



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