RBI warns banks on real estate valuation frauds

Alarmed by inflated valuations of real estate properties for the purpose of loans, the Reserve Bank of India (RBI) has asked all banks to submit an action-taken report on the issue. The matter was raised last week by RBI Governor D Subbarao during a meeting of the Board for Financial Supervision (BFS). After this, top RBI officials met representatives of the banking industry earlier this week. The regulator reminded bankers about the prudential norms on valuation of assets and asked them to follow these in both letter and spirit. Sources close...

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Sidbi crosses Rs 2 lakh cr in cumulative disbursement

The Small Industries Development Bank of India (Sidbi) today said that it had crossed the milestone of cumulative disbursement of Rs 2 lakh crore as on March 31, 2011. During 2010-11, Sidbi's outstanding credit to the MSME sector increased by 22% to Rs 46,331 crore. Its asset portfolio crossed Rs 50,000 crore as at March 31, 2011. The net profit after tax increased by 22% to Rs 514 crore from Rs 421 crore. The net worth of the bank increased to Rs 5,979 crore and the Earnings per share (EPS) improved to Rs 11.42 from Rs 9.36. Net NPA as percentage...

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IDBI wins NBCC mandate on low fee

IDBI Capital has won the mandate to manage the initial public offer (IPO) of National Building Construction Corp Ltd (NBCC). Most of the other bankers were not willing to match the low fee it quoted. Last month, the department of disinvestment had called for bids to appoint two merchant bankers for the issue. The government selects bankers through a two stage-process of technical and financial bids. According to the rules, other bidders have to match the fee quoted by the lowest bidder (L1). Last week, 10 domestic banks applied for the mandate,...

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Demat must for promoter holdings: SEBI

Mumbai: Market regulator SEBI today asked the promoters of listed companies to convert their entire equity holding in the dematerialized form by September 2011, failing which it will ban trading of such shares in the normal segment of the market. "The securities of companies shall be traded in the normal segment of the exchange if and only if, the company has achieved 100 per cent of promoter's and promoter group's shareholding in dematerialized form latest by the quarter ended September 2011", Sebi said in a circular. It further said trading...

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Banks' investments in mutual funds dip 23%

Banks have been withdrawing from mutual funds after the regulator mandated a cap on their investments in liquid schemes in May 2011. Bank investments have dropped by 23 per cent in a month since the announcement. According to the data provided by the Reserve Bank of India (RBI), bank investments in mutual funds were down from Rs 1,20,854 crore on May 6 to Rs 93,334 crore on June 3. In its annual monetary and credit policy for 2011-12, RBI said banks were permitted to invest in mutual funds only to the extent of 10 per cent of their net worth. “Most...

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RBI strengthens ties with DFSA

DUBAI: The Reserve Bank of India (RBI) signed a Memorandum of Understanding with the Dubai Financial Services Authority (DFSA) during the visit of a senior DFSA official to Mumbai this week, it has been announced. The MoU was signed by the Chief Executive of the DFSA, Paul Koster, and RBI Executive Director G Gopalakrishna during a visit by Koster and senior DFSA executives to Mumbai, a statement released here said. The ceremony at the central office of the RBI took place in the presence of RBI Deputy Governor K C Chakrabarty . One of the DFSA...

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RBI reshuffles ED portfolios

The Reserve Bank of India (RBI) has re-allocated the portfolios of its executive directors (EDs) following the induction of two new ones. RBI has increased the number of executive directors to nine from seven earlier. Among the two new ones, B Mahapatra has been given the charge of four departments, including the department of banking operations and development and department of government and bank accounts. P Vijaya Bhasker has taken charge of the department of banking supervision and the department of non-banking supervision, apart from the central...

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