For 'biggest scam in India's history', RBI, two private sector banks get threat mails

The sender also claimed to have planted bombs at 11 locations across Mumbai, where the three banks – HDFC and ICICI are the other two – are headquartered.

The Reserve Bank of India (RBI), which is headquartered in Mumbai, and two city-based private sector banks (HDFC and ICICI) on Tuesday received threat mails, in which the sender accused the RBI and private sector banks of carrying out the ‘biggest scam in the history of India,’ and claimed to have planted bombs at 11 locations across the financial capital, Mint reported citing Mumbai Police.

The sender also demanded the resignation of Union finance minister Nirmala Sitharaman and RBI governor Shaktikanta Das, among others, for their 'involvement' in the so-called ‘scam.’

“We demand that both RBI Governor and Finance Minister to immediately resign from their posts and release a press statement with a full disclosure of the scam. We also demand government to give them both and all those who are involved the punishment they deserve,” the emails said, as per Mint.

Where were the ‘bombs’ planted?

Three of the locations at which the sender claimed to have planted bombs were: RBI-New Central Building, Fort; HDFC House-Churchgate; and ICICI Bank Towers, BKC (Bandra-Kurla Complex). Also, the mails warned that the explosives would detonate at 1:30 pm.

What did the police find?

The Mumbai Police said that upon being made aware of the mails, they sent their personnel to each of the 11 locations, though nothing was found.

“A case has been registered and the probe is underway,” a police official told news agency ANI.

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Latest Bank merger news of PSU banks and PSU Insurance Company

 

A government document shared on social media has triggered speculation about possible PSU bank mergers between Union Bank and UCO Bank, and Bank of India and Bank of Maharashtra. The document, whose source couldn't be verified, said that a Parliamentary committee will hold discussions with four PSU banks in the first week of January under banking laws, which govern mergers and acquisitions, among other things.

However, the government has not yet provided official information regarding the merger. Neither of the four PSU banks mentioned have made any stock exchange filings in this regard.

The document being circulated on X (formerly Twitter) is a government PDF issued in the name of Ramesh Yadav, Under Secretary of the Government of India. The letter is issued to the Governor, Reserve Bank of India, Chairman of LIC, IRDAI, and NABARD, along with MD and CEOs of UCO Bank, Bank of Maharashtra, Bank of India, and Union Bank of India.

The PDF is also addressed to CMDs of New India Assurance Company, United India Insurance Company, Oriental Insurance Company, National Insurance Company, and MD & CEO of SBI Life Insurance Company. The subject of the alleged government PDF states 'Study Visit programme of the Committee on Subordinate Legislation, Lok Sabha to Mumbai and Goa from 2 to 6 January 2024'.

The 2-day programme includes informal discussions with the representatives of Union Bank of India and UCO Bank on January 2, and with representatives of Bank of Maharashtra and Bank of India on January 4, 2024, on rules/regulations framed under Banking Regulations Act 1949 and other relevant Acts as applicable to them and the regulatory mechanism in post-merger scenario.

The Finance Ministry has reportedly issued a clarification, saying that this is a parliamentary committee on subordinate legislation, and it has no connection whatsoever with the policies of bank mergers, according to CNBC-Awaaz. Amid the merger buzz, the ministry reportedly changed the agenda of its meeting. According to the new agenda, there is no mention of the word “Merger”, which simply means that there is no proposal for a merger between Union Bank of India and UCO Bank, Bank of India, and Bank of Maharashtra, said CNBC Awaaz in its report.

Meanwhile, No proposal to merge the public sector banks is being considered by the government and the discussions were part of a ‘routine exercise, Reuters also reported citing two sources from the Ministry of Finance.

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Government To Meet RBI, NPCI And TRAI After UCO Bank Incident: What Caused 'Rs 820 Crore Technical Glitch' At The Bank

Public sector UCO Bank on Thursday said it has been able to recover around Rs 649 crore out of Rs 820 crore, which is about 79 per cent of the amount “erroneously credited” to some customers due to a technical issue in the Immediate Payment Service (IMPS).

“The bank has initiated requisite actions to recover the balance amount of Rs 171 crore and the matter has also been reported to the law enforcement agencies for necessary action,” it said in an exchange filing.

During the period from November 10 to 13, the bank observed that due to technical issue in IMPS, certain transactions initiated by holders of other banks have resulted in credit to the account holders in UCO Bank without actual receipt of money from these banks, UCO bank said in another filing. Money is instantly transferred in the IMPS system from one account to another account.

“The bank, as a precautionary measure, has made the IMPS channel offline and is working closely with the stakeholders to resolve the issue and restore the IMPS services at the earliest,” it said.

“The bank re-iterates and assures that all other critical systems are operational and available. The bank continues to provide safe and secured services to customers,” it said.

The financial impact, if any, due to the development is yet to be ascertained and the bank will endeavour to intimate the ascertainment, the bank said.

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RBI supersedes board of large Cooperative Bank for a year, cites poor governance

 

Abhyudaya Cooperative Bank's net non-performing assets (NPAs) ratio have zoomed up to 12 per cent, sources said on November 25. A day after the Reserve Bank superseded the city-headquartered bank's board, it has emerged that the cooperative bank's cost-to-income ratio had zoomed up to 80 per cent.

The RBI order on November 24 had superseded the board for 12 months on material concerns emanating from poor governance standards observed in the bank" but refrained from putting any business restrictions. They placed an administrator and an advisory panel to assist him.

People in the know said that poor governance led to gradual accumulation of NPAs and deterioration on the cost-to-income ratio. According to sources, the bank management led by chairman Sandeep Ghandat had hired excessively to win over voters in the Parbhani district of Maharashtra, which is a political base for the family.

In what should allay any concerns among customers, sources said the bank had made an operating profit in FY23, and has a sizeable proportion of the deposits in the low-cost current and savings account. The bank has also consistently maintained the statutory liquidity ratio and cash reserve ratio, those in the know said.

With the professional team looking after the day-to-day affairs of the bank, it will recover its bad loan to clean up its balance sheet and also improve operating efficiency," a person in the know said. The person added that Abhyudaya Bank will continue its normal business as there are no restrictions placed on it.

On November 24, there were reports saying that the RBI has agreed to open its currency chest for the next three days in order to ensure that all the ATMs of the lender dispense cash as sought by the depositors. The regulatory move against the bank was one of the biggest such actions against any cooperative lender after the PMC Bank case, where strong restrictions were put on the depositors as well.Abhyudaya Cooperative Bank's net non-performing assets (NPAs) ratio have zoomed up to 12 per cent, sources said on November 25. A day after the Reserve Bank superseded the city-headquartered bank's board, it has emerged that the cooperative bank's cost-to-income ratio had zoomed up to 80 per cent.

The RBI order on November 24 had superseded the board for 12 months on material concerns emanating from poor governance standards observed in the bank" but refrained from putting any business restrictions. They placed an administrator and an advisory panel to assist him.

People in the know said that poor governance led to gradual accumulation of NPAs and deterioration on the cost-to-income ratio. According to sources, the bank management led by chairman Sandeep Ghandat had hired excessively to win over voters in the Parbhani district of Maharashtra, which is a political base for the family.

In what should allay any concerns among customers, sources said the bank had made an operating profit in FY23, and has a sizeable proportion of the deposits in the low-cost current and savings account. The bank has also consistently maintained the statutory liquidity ratio and cash reserve ratio, those in the know said.

With the professional team looking after the day-to-day affairs of the bank, it will recover its bad loan to clean up its balance sheet and also improve operating efficiency," a person in the know said. The person added that Abhyudaya Bank will continue its normal business as there are no restrictions placed on it.

On November 24, there were reports saying that the RBI has agreed to open its currency chest for the next three days in order to ensure that all the ATMs of the lender dispense cash as sought by the depositors. The regulatory move against the bank was one of the biggest such actions against any cooperative lender after the PMC Bank case, where strong restrictions were put on the depositors as well.

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RBI Monetary Policy Meeting Highlights: RBI keeps interest rates unchanged

 The Monetary Policy Committee has on August 10 unanimously voted to leave the repo rate unchanged at 6.5 percent, RBI Governor Shaktikanta Das announced today. The Standing Deposit Facility rate is also retained at 6.25 percent; and the Marginal Standing Facility rate, Bank Rate is also retained at 6.75 percent. The MPC has also decided to remain focused on the withdrawal of accommodation with preparedness to act should the situation so warrant.The Reserve Bank of India's Monetary Policy Committee (MPC), has three members from the RBI and three external members. During the last MPC meeting in June, the repo rate was left unchanged. Today's decision marks the third time rates have been left unchanged. The central bank had earlier raised repo rates by a total of 250 bps since May 2022 with an aim to tackle inflation.

This is the third MPC meeting this fiscal. The MPC consists of three external members and three officials of the RBI. The external members of the panel are Shashanka Bhide, Ashima Goyal, and Jayanth R Varma. Besides Governor Shaktikanta Das, the other RBI officials in MPC are Rajiv Ranjan (Executive Director) and Michael Debabrata Patra (Deputy Governor).

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RBI imposes Rs. 2.5 crore penalty on three banks

The Reserve Bank of India (RBI) imposed a monetary penalty on three private and public sector lenders on Friday. The central bank charged Jammu & Kashmir Bank with Rs.2.5 crore penalty, while the Bank of Maharashtra faced a fine of Rs.1.45 crore. Axis Bank received the least amount of penalty among them to the tune of Rs.30 lakh.

Jammu & Kashmir Bank:

RBI imposed a Rs.2.5 crore penalty on J&K Bank for non-compliance with certain directions issued by RBI on ‘Creation of a Central Repository of Large Common Exposures-Across Banks’, read with ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’, ‘Loans and Advances – Statutory and other Restrictions’ and ‘Time-bound implementation and strengthening of SWIFT-related operational controls’.

According to RBI's inspection, J&K Bank non-complied in --- (i) failed to ensure integrity and quality of data submitted to CRILC, (ii) extended term loans to a corporation (a) without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects are sufficient to take care of the debt servicing obligations and (b) failing to ensure that the repayment/servicing of said term loans were not made out of budgetary resources and (iii) created financial/non-financial messages in SWIFT without first ensuring that the underlying transactions have been duly reflected in the CBS.

Bank of Maharashtra:

This government-owned bank was imposed with Rs.1.45 crore penalty for non-compliance with certain directions issued by RBI on ‘Loans and Advances – Statutory and Other Restrictions’ and Advisory on ‘Man in the Middle (MiTM) Attacks in ATMs’ (the Advisory).

BoM committed non-compliance in the extent of --- (1) it sanctioned a term loan to a Corporation (i) in lieu of or to substitute budgetary resources envisaged for certain projects; (ii) without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects were sufficient to take care of the debt servicing obligations; and (iii) the repayment/servicing of which was made out of budgetary resources, and (2) it failed to implement required control measures for ATMs relating to end-to-end encryption of communication between the ATM terminal/PC and the ATM Switch, within the prescribed timeline.

Axis Bank:

Axis Bank, one of the leading private sector lenders, was penalised with Rs.30 lakh due to its non-compliance with certain provisions of the RBI directions on ‘Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances – Credit Card Accounts’.

As per RBI's inspection, Axis Bank had levied penal charges in certain accounts for late payment of credit card dues though the customers had paid the dues by the due date, through third party platforms.

Notably, before imposing the charges, RBI had sent notices to these three banks --- advising them to show cause as to why a penalty should not be imposed on them for failure to comply with the directions issued.

After considering the banks' reply to the notice, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted the imposition of monetary penalty on these banks.

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85% People Have Chosen To Deposit Rs 2,000 Notes Instead Of Exchanging Them, Reveals RBI Governor

 

In line with industry-wide expectations, the RBI today announced its decision to keep the repo rate unchanged for the second consecutive time in its MPC meeting. Given that this was RBI’s first MPC meeting after the Rs 2,000 note withdrawal decision, the RBI governor Shaktikanta Das did give an update regarding what the trends have been in the past three weeks. 

“Approximately half of the total Rs 2,000 notes in circulation have come back to the banks,” the RBI governor mentioned at the press conference after the MPC meeting this morning.

Citing bank data, the RBI governor said Rs 2,000 notes worth Rs 3.62 lakh crore were in circulation as of the end of March 2023, of which notes worth Rs 1.8 lakh crore have come back. About 85% of these notes that returned to banks have come back as deposits, Das revealed. This is in line with expectations, he said.

The RBI announced the Rs 2000 note withdrawal on May 19, 2023.

Following the announcement to scrap India's highest-denomination banknotes, economists had said they expected bank deposits to rise by as much as Rs 2 lakh crore, as per ET.

According to analysts, higher deposits will bring down banks’ deposit costs and likely impact their net interest margins or NIMs positively as credit demand remains broadly unchanged. As per RBI data, the percentage of Rs 2,000 notes at the time of their withdrawal was just 10.8% of total notes in circulation, which is a big drop from Rs 6.73 lakh crore at its peak in March 2018. 

Why The RBI Decided To Withdraw Rs 2000 Notes

The RBI withdrew Rs 2,000 notes from circulation in May as part of its 'clean note policy'. At the time of withdrawal, the central bank justified its move by saying these notes have served their purpose. As per an official announcement, people who hold these notes with them can get them exchanged or deposit them by September 30.

Unlike in the case of 2016's demonetisation, the present Rs 2,000 notes will continue to remain legal tender, as per RBI's statement.

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RBI imposes Rs 84.50 lakh penalty on this PSU Bank

 

RBI on Friday said it has imposed a penalty of Rs 84.50 lakh on Central Bank of India (the bank) for non-compliance with certain provisions of norms related to frauds classification and reporting. The Reserve Bank had conducted statutory inspection for supervisory evaluation of the bank with reference to its financial position as on March 31, 2021.

Examination of the reports revealed that the public sector lender had failed to report as fraud to RBI certain accounts within seven days of decision of Joint Lenders' Forum (JLF) to declare the accounts as fraud.

It had recovered SMS alert charges from its customers on flat basis rather than on actual usage basis.

The RBI had issued a notice to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions.

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

RBI, however, added the penalty is based on the 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.

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