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Showing posts with label department of financial services. Show all posts
Showing posts with label department of financial services. Show all posts

Sunday, 6 March 2016

07:47

SWIFT financial messaging service launched in India

SWIFT financial messaging service launched in India

Financial messaging services provider SWIFT launched its services in India on Thursday, bringing with it a unified messaging protocol that can link banks, financial intermediaries, regulators, and stock exchanges and clearing agencies through one suit that can secure transactions by keeping records in a dematerialised form.

While the services do not facilitate transactions per se, it generates encrypted messages for every transactions made, thereby minimising chances of fraud and easy reconciliation of accounts.

Newly formed Bandhan Bank, IDFC Bank and Tata Consultancy Services were among 13 clients which signed up for the services on the first day.
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SWIFT India is a joint venture between SWIFT SCRL and nine Indian banks — State Bank of India, Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank, Axis Bank, HDFC Bank, ICICI Bank, and Union Bank of India. The entity will be regulated by the Reserve Bank of India (RBI) and the data centre will be located in India, which is a departure from SWIFT’s usual practice.

Under the conditions laid down by RBI, SWIFT would be ready to share data with the regulator, but will not do so as a practice, said Alain Raes, chief executive EMEA and Asia Pacific, SWIFT.

RBI has opted to be in the Euro Zone grouping as the group has stricter data sharing norms. Since the data centre will be located in India, SWIFT will not oblige any country seeking transaction data of Indian banks but will have to approach RBI first.

SWIFT works in over 200 countries, and has clients in 10,800 banks, securities institutions and corporate customers. About 90 per cent of the transactions generate in the domestic market of the operation.


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Saturday, 31 October 2015

09:28

RBI questions banks for lending Rs 5253 cr after CBI uncovers fraud

RBI questions banks for lending Rs 5253 cr after CBI uncovers fraud

Four days after the CBI registered cases against a Kolkata- based company, it has emerged the RBI redflagged loans given to the firm seven months ago, virtually indicting banks for not acting in one of India’s largest banking frauds.

In a confidential letter to the department of financial services (DFS), the Reserve Bank of India raised uncomfortable questions about the role of banks that had lent a colossal Rs 5,253 crore to REI Agro Limited case. The Basmati rice trading firm availed the credit from a consortium of 21 banks.

RBI’s letter came after already asking the lending banks in July 2014 to investigate REI Agro Limited’s operations and report back any fraudulent activities. When the banks didn’t respond, the central bank asked UCO Bank — the largest lender — to hold an emergency meeting of the lending banks, and asked them “to report the fraud and start recovery proceedings immediately”.

The Central Bureau of Investigation lodged a case of criminal conspiracy, cheating and forgery against the firm on Monday.

“Instead of exploring the possibility of treating the case as a fraud and filing a criminal complaint if necessary, the banks were moving in the direction of restructuring the loan,” read the RBI letter to the DFS, the government arm that oversees banks and banking operations.

But the banks didn’t take action for a long time.

The RBI letter also asked the DFS to alert the CBI, Enforcement Directorate and the Serious Fraud Investigation Office (SFIO) to take necessary steps.
The RBI spokesperson refused to comment while calls to the DFS secretary elicited no response. REI Agro could also not be contacted.

“Our bank has reported REI Agro account as default and fraud... recovery action has also been taken,” said SR Bansal, Corporation Bank chief.
But an Axis Bank spokesperson said the bank does not comment on “individual clients and their transactions”. Bank of Baroda executive director BB Joshi did not respond.

A senior official at one of the public banks said the consortium was trying to revive the loan amount to keep it active and not classify it as a non-performing asset, which does not fetch returns.

HT had earlier reported on RBI governor Raghuram Rajan’s letter to the PMO, listing out India’s top 10 bank frauds — led by a Rs 4,276 crore loan by diamond trading firm Winsome — asking the officials to act urgently on the large value banking frauds and “the need to take concerted action in these cases”.

 Source :BankingUpdates.
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