RBI looking into record high gold imports

The sharp rise in gold imports has drawn the central bank’s attention and it is studying the factors contributing to this.

Reserve Bank of India (RBI) Governor D Subbarao on Tuesday said they were looking into the reasons. “We are trying to solve why gold imports were at a record high,” he said. This, coupled with high oil imports, had led to widening of the current account deficit, which in turn contributed to rupee depreciation.

In 2011, the country imported 969 tonnes of the yellow metal, according to World Gold Council data. India’s gold import in 2010 was quite high, at 958 tonnes. Imports, however, have started tapering after the government recently quadrupled import duty. In value terms, imports in financial year 2011-12 were a little less then $60 billion. According to data released by the government yesterday, gold and silver imports in April and May came down to $4.3 billion, compared with $9.2 billion last year.

Referring to the issue of rupee depreciation, he said the fall in the currency exchange rate since March was because of both global and domestic factors. In the earlier phase of August to December 2011, the rupee had depreciated on the back of global uncertainty and had appreciated in the following phase, January to February 2012, due to measures taken by RBI.

“We will continue to follow the policy of intervening only to smoothen volatility in the foreign exchange market,” he said. The rupee has fallen 25 per cent in the past 12 months.


Source: Business Standard

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SBI has increased agricultural advances in Northeast India

India's largest banker, State Bank of India (SBI) has increased its agriculture advances in Northeast India from Rs 1272 Crore in 2009-10 to Rs 1745 Crore.

Chairman of SBI, Pratip Chaudhuri is on two day visit to Northeast India to take stock of the bank's activity in the region. Chaudhuri met Assam chief minister, Tarun Gogoi and discussed banks activity in the state.

The credit deposit ratio (CD) of SBI in Assam has improved from 36 percent of 2010-11 to 38 percent in 2011-12. Presently Assam has a CD ratio of 39.5 percent.

The number of Kisan Credit Card (KCC) disbursed by SBI has increased from 70539 to 139411 in Northeast India.



Source: EconomicTimes

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Banks may not have to file FIRs on detecting fake currency

The filing of first information report by banks when fake currency notes are detected may be waived, according to a Finance Ministry report. This is aimed at improving reporting of such cases.

Reporting of fake notes should be limited to making the information available to the Reserve Bank of India/Financial Intelligence Unit – India, said the report.

Banks’ branches are generally hesitant to report fake notes to RBI/FIU-IND and in lodging first information report (FIR) with the police. This is primarily because of the fear of police harassment, said the report on reforms in currency chest operations and management.

The report suggests that employees of banks need to be assured that mere reporting of fake currency notes would not land them in trouble and they should be encouraged to promptly report such instances without any sense of fear.

Current dispensation

As the situation obtains now, commercial banks are required to impound all counterfeit notes detected by them and send them to the police for lodging an FIR.

The Criminal Procedure Code requires every person, aware of the commission, or intention, of any other person to commit certain offences, including those relating to counterfeiting of currency, to immediately give information about such commission or intention to the nearest magistrate or police officer.

As per RBI data 4,35,607 fake notes were detected in 2010-11 against 4,01,476 in the previous year. Almost 90 per cent of the counterfeit notes identified were detected at bank branches, with the balance being detected at the RBI.

Recommendation

The report has recommended that the central bank frame a policy for mandatorily providing note sorting machines (NSMs) at all bank branches with average cash receipt of Rs 25 lakh and above so that the detection of forged notes can be made at the point of entry at each counter.

Further, the RBI should incentivise banks to use of NSMs and other fake note detecting devices.

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Loan default: Citicorp Finance to apologise

Four years ago, a Delhi district court described it as a “classic” case when Citicorp Finance, a lending and finance company, sent goons and reclaimed a vehicle from a man who allegedly defaulted in paying loan instalments.

Last month, the Delhi High Court held the company guilty of contempt of court and read out a unique punishment — apology to be published in leading national dailies in the country’s four metros. The apology would unequivocally mention the company’s resolve not to ever reclaim a loaned vehicle using force.

Reproaching the company for reportedly reclaiming a vehicle from a man by employing goons despite a district court’s restraint order, Justice Vipin Sanghi said the firm must get exemplary punishment because they overreached a judicial order and “apparently” used extra-judicial methods.

“It is clear that if the petitioner is allowed to go unpunished, it would shake the confidence of the litigating public in the rule of law. It would also lower the dignity and majesty of this court and courts subordinate to it,” the judge said.

Cautioning Citicorp from repeating the act, Justice Sanghi said: “In these circumstances, while once again warning the contemnor against resorting to such tactics in future, I direct the company to publish, in leading national dailies published from metro cities of Delhi, Mumbai, Kolkata and Chennai, public notices stating they shall not resort to taking forcible possession of vehicles or assets, which are taken on hire-purchase by their customer, and that possession shall be taken only in accordance with the due process of law.”

The incident took place in January-February 2008 when Citicorp moved an application before a district court. It said Kailash Prajapat had defaulted in paying instalments for his loan and, hence, the company required to reclaim the vehicle. The court then appointed an official receiver to get the possession of the vehicle, but restrained the company from selling it till the next date. Subsequently, Prajapat appeared in court and contended that despite appointment of a receiver, his car was forcibly taken away by the company’s goons and was later sold. He also claimed he had no outstanding dues.

The court sought an explanation from the company on Prajapat’s statement. As no cogent explanation came by, the district court sent a reference of contempt of court to the High Court, where the company contended they did not forcibly take away the vehicle. It further said there was some confusion over the period up to which the district court order was in force.

Justice Sanghi was unimpressed with the arguments. He said Citicorp, which has all the wherewithal and resources to make it aware of the laws and the consequences of willful disobedience of a court’s order, could not seek excuse claiming it was not certain about a judicial order.

The court then held the company guilty of civil contempt. Citicorp, in its affidavit, put an unconditional apology with a statement that it had never taken possession of a vehicle without following due process of law after this incident. The company claimed to have paid Rs 2 lakh in compensation to Prajapat.


Source: Financial Express

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Karnataka Bank to open more branches in eastern region

Karnataka Bank will expand its footprint in the eastern region, according to Mr P. Jayarama Bhat, Managing Director of the bank.

Inaugurating the 504th branch of the bank in the country at Bhubaneswar in Odisha on Monday, he said that the bank plans to add 50 more branches during the current financial year. As part of this, branches will be opened at Jamshedpur, Asansol and one more branch in Kolkata City in the eastern region, he said.

The bank has its presence in six eastern states– West Bengal, Assam, Bihar, Jharkhand, Chhattisgarh and Odisha.

The first branch in the eastern region of the country was opened at Kolkata in West Bengal in 1996. The bank has seven branches in Odisha state.

A bank release said here that Ms Jagi Mangat Panda, Managing Director of Ortel Communications Ltd, Bhubaneswar, inaugurated the new branch at Bhubaneswar.

vinayakaj@thehindu.co.in

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