Social media: Marathe raises debate on future of credit co-ops

Link : http://www.indiancooperative.com/from-states/social-media-marathe-raises-debate-on-future-of-credit-co-ops/

Veteran cooperator and former President of Sahakar Bharati Satish Marathe has raised a debate on social media about the future of urban cooperative banks and credit cooperative societies. While several of his friends on Facebook agreed with him, there were some who thought it unrealistic.

Marathe worte “Small Finance Banks ( SFBs) and Payment Banks (PBs) together will open about 3600 Branches in the very first year of operation. Collectively, SFBs and PBs would bring in Rs 7400 crore as capital.

Entry of these new categories of banks will be a big threat to the existing Urban Co-op Banks.

Unless the UCBs quickly refashion their internal working, reduce operating costs, improve productivity, concentrate on capacity building, fully harness technology and particularly make available emerging payment gateways eg IMPs ( Mobile Payment ), e- Wallets, Internet access, etc , there is every chance of UCBs losing a large chunk of their secure and profitable business.

Business of the well run Dist Central Banks and large Credit Co-operative societies will also be affected by the entry of these new banks, particularly SFBs.

It is a wake-up call for the Co-Op Banking Sector.”

Kashinath Ranade, one of Marathe’s friends says “Just see the history some of the known co-op banks that are under moratorium. Some are struggling to remain under RBI’s norms for payment of dividend to share holders and adopting various tactics to remain within RBI’s norms.

Another friend Makarand Khanolkar felt “I honestly think that this is a pseudo threat. Neither the SFBs nor PBs nor Post offices would be able to provide the service a Co-op Bank does. Yes, I do agree that more transparency is required for survival in the Banking Sector.

Agreeing to Marathe’s point of view one of his FB friends wrote” Add to it the proposal of post office getting converted into banks. With their ubiquitous presence in villages, UCB may become an endangered species.”

Banks, insurers to align with global accounting rules from April 1, 2018

Link : http://www.thehindubusinessline.com/economy/roadmap-announced-for-ind-as-implementation-by-banks-insurers/article8123347.ece

Centre announces roadmap for implementing Ind AS in the financial sector

NEW DELHI, JAN 19:  

The Centre has announced the much-awaited roadmap for implementing the Indian Accounting Standards (Ind AS) by banks, insurers and non-banking finance companies (NBFCs).

Ind AS are a set of accounting standards developed by Indian authorities, which converge with the International Financial Reporting Standards (IFRS).

According to the roadmap, scheduled commercial banks (excluding regional rural banks) and insurers, will be required to prepare Ind AS-based financial statements for accounting periods beginning April 1, 2018. This would have to be done with comparatives ending March 31, 2018 or thereafter.

Ind AS would be applicable to both consolidated financial statements. The roadmap would also apply to all-India term-lending refinancing institutions, such as Exim Bank, NACAS, NHB and SIDBI, an official release said.

Urban cooperative banks and regional rural banks are not required to apply Ind AS and can continue to comply with the existing standards for the present, the release added.

The new roadmap is being implemented as a follow-up of the 2015-16 Budget announcement made by Finance Minister Arun Jaitley. Also, the Centre has now stipulated that commercial banks cannot voluntarily adopt Ind AS prior to the roadmap date.

The roadmap also clarifies that holding company, subsidiary, joint venture and associate entities of commercial banks, insurers and NBFCs will also have to comply with the standards.

NBFCs have been asked to prepare Ind AS-based financial statements in two phases.

Under phase I, NBFCs having net worth of ₹500 crore or more would have to prepare the statements for accounting periods beginning April 1, 2018.

Under phase II, NBFCs whose equity and/or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and have net worth less than ₹500 crore should prepare the statements from April 1, 2019.

The same roadmap will apply to unlisted NBFCs having net worth of ₹250 crore or more, but less than ₹500 crore.

srivats.kr@thehindu.co.in

Karimnagar Co-op Urban Bank penalized

http://www.indiancooperative.com/co-op-news-snippets/karimnagar-co-op-urban-bank-penalized/

The Reserve Bank of India has imposed a monetary penalty on The Karimnagar Co-operative Urban Bank Ltd., Karimnagar, Telangana, in exercise of the powers vested in it.

The UCB was found guilty of violation of guidelines and directives of Reserve Bank of India on loans and advances to directors and their relatives.

The Reserve Bank of India had issued a show-cause notice to the bank, in response to which the bank submitted a written reply.

After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of penalty.

Urban cooperative banks misused for money laundering

http://articles.economictimes.indiatimes.com/2013-10-30/news/43528981_1_money-laundering-urban-cooperative-banks-new-delhi

NEW DELHI: Urban Cooperative Banks (UCBs), which hold deposits of over Rs two lakh crore, are being misused for money laundering causing alarm to the government.
The matter of misuse of UCBs, over which there is dual control by central or state governments through multi-state cooperative societies or state cooperative societies, was discussed during a a recent meeting of Economic Intelligence Council (EIC), chaired by Finance Minister P Chidambaram.

DA ORDER FOR Kerala State

Download the DA Order from the link below :

https://docs.google.com/file/d/0B0A2MsukKkXheVpYWU1fQzVhRVk/edit?usp=sharing

Saradha scam: 13 co-op banks under RBI scanner

Sumantha Ray Chowdhary wrote in the Hindustan Times (April 26)

The Reserve Bank of India (RBI) is probing the role of 13 cooperative banks in West Bengal where the tainted Saradha Group managed to park funds for conducting illegal transactions. According to RBI sources, these banks include two each in South 24 Parganas, North 24 Parganas, Howrah,

Hooghly, Kolkata and one each in Nadia, East Midnapore and West Midnapore. The RBI is of the opinion that the tainted group was able to open fake accounts either due to a lacklustre approach in verifying credentials of account holders through the know your customer (KYC) system or owing to the direct involvement of a section of bank officials, who are believed to be close to officials of the tainted group.
The apex bank’s regional head office in Kolkata has been instructed to carry out detailed investigation into such fake accounts in urban corporative banks as well as scheduled commercial banks in the state.
“Be it negligence on part of the authorities in verifying credentials of account holders or their proximity to group officials, we are determined to take stringent action against staff members who are found guilty,” said a senior RBI official.
In fact, only on February 25, 2013, urban cooperative banks were cautioned by the RBI to conduct periodic reviews of high-risk customers and also ensure that KYC guidelines are adhered to.
The apex bank also expressed dissatisfaction over the performance of a section of urban cooperative banks.
“There have been instances of urban co-operative banks being used as conduits for money laundering and other unlawful activities primarily due to non-adherence to KYC and other such guidelines, including absence of risk profiling of customers and lack of proper monitoring of transactions,” the circular read.
“Caution was sounded earlier but it did not have any impact on the management or officials of the 13 cooperative banks in West Bengal. So, we will identify the officials responsible and take action,” the RBI official added.
Recently, West Bengal Infrastructure Development Finance Corporation and West Bengal State Cooperative Bank became victims of forgery to the tune of Rs. 120 crore and Rs. 20 crore respectively. In both the cases, fake accounts held in UCO Bank were used to facilitate the fraud.

RBI approves merger of Mehsana Urban co-op bank and Surat Nagrik Sahkari bank

Melvyn Thomas wrote in the Times of India (April 26) :


SURAT : The Reserve Bank of India (RBI) has approved the merger of the Surat Nagrik Shahkari Bank with the Mehsana Urban Cooperative Bank, giving a big succor to the 44000 account holders and depositors in the city.
The account holders and depositors of Surat Nagrik Sahkari bank were on the tenterhooks after the bank was placed under directions by the RBI under section 25(a) of the Banking Regulation Act, 1949 on March 1.
Samir Patchigar, managing director of Surat Nagrik Sahkari Bank said, "We are grateful to the RBI for taking prompt decision on our bank's merger with the Mehsana Urban Cooperative Bank. This will end the 40 long years of Surat Nagrik bank's performance in the city. Now, the depositors and account holders will be catered by the Mehsana Urban bank"


"We were making all our efforts for getting the approval from the RBI regarding the merger of both the cooperative banks. It was only after the NoC was issued by the state registrar of banks that our merger procedure was completed at the earliest" added Patchigar.
Sources said that the Surat Nagrik Cooperative Bank had lost a whopping Rs 25 crore in the Madhavpura bank and Home Trade scams.

RBI may suspend licence of Amanath Bank

The fate of thousands of small-time investors and savings bank account holders is uncertain as the Indian banking regulators started tightening its noose around minority cooperative society Amanath Bank.
Now, the bank is staring a possible suspension of its licence by Reserve Bank of India (RBI) in the face.
Amidst the allegations is Union Minister for Minority Affairs K Rahman Khan, who was one of the founders of the bank, also served as its president when irregularities allegedly took place.
Khan and his associates are alleged to have siphoned off over `110 crore from the bank on the pretext of giving loans to close relatives of the minister. Sources told Express that the bank gave away loans to Khan’s relatives, but they were not recovered.
“Many of them did not pay interest and the board approved closing the loans with a fraction of payment. This resulted in enormous non-performing assets (NPA),” they said. However, Khan admitted that loans were given to his relatives, who defaulted, but he stopped short of taking responsibility for it.
“There are no loans pending from my side. As per co-operative regulations, directors and relatives can take loans... My relatives have taken loans because they are shareholders of the bank and have the right to borrow,” Khan told Express.
“I have not given any concessions, they were given by subsequent boards as part of recovery process. (State Minorities Commission Chairman Anwar) Manpaddy and others are complicating the situation unnecessarily,” he said.
The RBI which is said to have taken note of the ‘dubious’ transactions over a period of time had shut down operations of the bank, allowing only `1,000 transaction per account for a period of six months.
Unaware of this development, small investors and customers are now making frequent trips to the bank to see if they have access to their savings of many years. Sources said the bank had provided insurance of up to `1 lakh and any one with savings more than that amount was likely to be affected if the RBI decided to shut operations.
Amjad Khan, who runs a military equipment store in Shivaji Nagar, says, “We (neighbours) all have invested in the bank and run our families with the interest amount. Now we hear it will be merged and that this crisis is politically motivated, but what about the normal people like us?” The bank’s NPA is said to be around 3 per cent now, but sources said this was fabricated to mislead the RBI and the investors.

news from : www.newindianexpress.com

Shree Ganesh Sahakari Bank under RBI direction

The Reserve Bank of India has placed Shree Ganesh Sahakari Bank Ltd., Nashik, Maharashtra, under Directions. According to the Directions, depositors will be allowed to withdraw a sum not exceeding Rupees one thousand of the total balance held in every savings bank or current account or any other deposit account.
The Urban cooperative Bank will, without prior approval in writing from the Reserve Bank, also not be able to grant or renew any loans and advances, make any investment, incur any liability.
It also cannot enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Directions dated April 01, 2013.
The Directions have been issued from the close of business on April 02, 2013.
The Reserve Bank has, however, clarified, that issue of the Directions by the Reserve Bank should not per se be construed as cancellation of banking licence. Rather, Shree Ganesh Sahakari Bank Ltd. will continue to undertake banking business but with restrictions till its financial position improves.
The Reserve Bank may consider modifications of these Directions depending upon circumstances.

News from : www.indiancooperative.com

Gujarat Mercantile Co-op bank penalized

Reserve Bank of India penalized Gujarat Mercantile Co-operative Bank based Ahmedabad in Gujarat a couple of days ago.
The apex bank imposed a monetary penalty of Rupees two lakh on Gujarat Mercantile Co-operative Bank for violation of the Banking Regulation Act, 1949 (AACS). It was also found flouting RBI directives.
The Urban Cooperative Bank failed to comply with RBI’s instructions relating to prohibition of loans and advances to directors/ relatives/related concerns.

RBI has issued Show Cause Notice to the bank in the response to which the bank has submitted a written reply and after considering facts of the case, bank’s reply and personal submission in the matter, RBI came to the conclusion that the violations were sustained and warranted imposition of penalty.

News from : www.indiancooperative.com