Regulations
ED attaches assets worth Rs20 crore in Citibank fraud case

The attachment orders, freezing two bank accounts of relatives of main accused Shivraj Puri and two properties of two another of his associates, had been issued by ED recently

New Delhi: The Enforcement Directorate (ED) has issued orders attaching assets worth about Rs20 crore in connection with its money laundering probe in the Citibank Gurgaon fraud scam, reports PTI.

 

The attachment orders, freezing two bank accounts of relatives of main accused in the case Shivraj Puri and two properties of two another of his associates, had been issued by the agency recently, sources privy to the development said.

 

Several depositors and high-networth individuals (HNIs) were duped in the Rs460.91-crore alleged fraud engineered by Puri-- a Global Wealth Manager of the bank and was working at its Gurgaon branch.

 

The ED attachment order ensures that the accused are not able to use or derive any benefit out of these properties as they are termed as "proceeds of crime".

 

The accused can challenge the order at the Adjudicating Authority of the anti-money laundering law based in the national capital.

 

The ED had registered a Prevention of Money Laundering (PMLA) offence in this case last year.

 

The Haryana police had earlier this year filed a charge sheet against the fraud accused and capital market regulator SEBI too probed the matter as the fraud money was invested in the stock market.

 

As per a SEBI report, Puri had allegedly taken an exposure of Rs1.13 lakh crore in the equity market using Rs236 crore of 51 high networth individuals and corporates and lost everything following decline in stock markets.

 

The government had earlier said the fraud in the Gurgaon branch of the bank had been going on since September 2009 but major transactions only took place between May 2010 and November 2010.

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COMMENTS

MK Gupta

4 years ago

Could this fraud happen without insider help and profit-sharing basis?

RBI cuts CRR by 0.25%, keeps other rates unchanged

The 25 basis points cut in CRR would infuse Rs17,500 crore in the financial system, thus allowing banks to reduce interest rates on loans to attract borrowers

 
The Reserve Bank of India (RBI), in its second quarter monetary policy review, has the cut cash reserve ratio CRR—the amount of deposits banks keep with the central bank—by 25 basis points (bps) or 0.25% to 4.25%. The central bank, however, kept other policy rates like repo rate, reverse repo rate and bank rate unchanged at 8%, 7% and 9%, respectively. The central bank, however, indicated ‘reasonable’ cut in policy rates soon.
 
The cut in CRR is expected to release Rs17,500 crore into financial system. With additional liquidity by the CRR cut, there is a possibility that banks may reduce the interest rate to attract borrowers.
 
In a statement, D Subbarao, governor, RBI, said, “In reducing CRR, the Reserve Bank intended to pre-empt a prospective tightening of liquidity conditions, thereby keeping liquidity comfortable and supportive of growth. The policy stance anticipates the projected inflation trajectory which indicates a rise in inflation over the next few months before easing in the last quarter. While there are risks to this trajectory, the baseline scenario suggests a reasonable likelihood of further policy easing in the fourth quarter of this fiscal year.”
 
According to Sonal Varma and Aman Mohunta from Nomura, the CRR cut and guidance given by the RBI are in their line of view that headline and core inflation will likely ease from Q1 2013 onwards, thus creating space for the RBI to cut the repo rate. "Given political pressure on the RBI to cut rates at this meeting, we see today's decision as prudent and fortifying the RBI's inflation fighting credibility," the Nomura economists said.
 
Siddhartha Sanyal and Rahul Bajoria from Barclays said, "We maintain our view of further rate cuts in Q1 2013 and continue to forecast a 100bp reduction in the repo rate during H1 13. While holding back from making rate cuts, we think the Indian central bank recognises the need to support faltering growth, and expect it to continue to provide liquidity to meet its money and credit growth targets."
 
India’s headline wholesale price index (WPI) inflation moderated from its peak of 10.9% in April 2010 to an average rate of 7.5% over the period January-August 2012. During this time, growth has slowed and is currently below trend. This slowdown is due to a host of factors, including monetary tightening.
 
“It (inflation) turned up again in September, reflecting the partial pass-through of adjustment of diesel and electricity prices, and elevated inflation in non-food manufactured products. It is, therefore, critical that even as the monetary policy stance shifts further towards addressing growth risks, the objective of containing inflation and anchoring inflation expectations is not de-emphasised,” the RBI governor said.
 
"FICCI believes that while a reduction in interest rate is imperative to revive investment growth, there would be some leeway now for banks to lend more to the productive sector via the CRR cut," said RV Kanoria, President of FICCI.

RBI said the loss of growth momentum that started in 2011-12 has extended into 2012-13 though the pace of deceleration moderated in the first quarter. Nevertheless, growth remains below trend and persisting weakness in investment activity has clouded the outlook. After decelerating over four successive quarters from 9.2% year-on-year (y-o-y) during fourth quarter of FY11 to 5.3% in same period of FY12, GDP growth was marginally higher at 5.5% in Q1 of FY13. The slight improvement in GDP growth in Q1 of FY13 was mainly driven by growth in construction, and supported by better than expected growth in agriculture.
 
"While liquidity has been accorded top priority, relatively smaller magnitude of CRR cut, no announcement of open market operations (OMOs) and scaling down of monetary projections by 1% point to continued tight liquidity condition going forward. If however, RBI conducts ad hoc OMOs to ease liquidity then it can still infuse a downward bias to interest rates that would help the market and the economy," said Motilal Oswal, CMD, Motilal Oswal Financial Services Ltd.
 
Meanwhile, stock markets, which were expecting more cuts in policy rates from the RBI, fell by over 1% after the policy announcement. At 11.50am, the BSE Sensex was trading 1.1% down at 18,436, while the NSE Nifty was down by 1.2% at 5,598. 
 
Sandesh Kirkire, CEO Kotak Mutual Fund, said, "This deferment of the repo rate cut has disappointed the market to certain extent. With growth rate regressing; and with most of the inflation factors like oil prices and food supply largely unresponsive to the monetary policy influence; it is only a matter of time that we would see the repo rate easing over the next few quarters."
 
"We think a further cut in the CRR is possible if the liquidity situation warrants, but the RBI will likely use this tool less aggressively, given that the rate has already been reduced by 175bp in 2012 and is at an historical low. Open market operations (OMOs), which have been used to inject over INR800bn of liquidity during FY 12-13, will likely remain a key tool to inject liquidity in the coming months, in our view," Sanyal and  Bajoria from Barclays added.

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COMMENTS

Vinayak Bhimarao Mudholkar

4 years ago

Reducing interest rates for the reckless borrowers including the Govt. is nothing but a slow poisoning for our country. These selfish people want to loot the hard earned savings of 'Mango People'
We have to change the western definition of growth. Follow people like Anand D. Karve & others trying to find out ways of sustainable development.

REPLY

M G WARRIER

In Reply to Vinayak Bhimarao Mudholkar 4 years ago

We are all being misled by what Sucheta dalal calls ‘nexus’ in some other context. The ‘rate cut’ by RBI can do precious little, if there is no political will to help the small savers, small investors, small entrepreneurs, small farmers and the workers and employees struggling to make both ends meet. I have said it earlier, but worth repeating the net interest margins(NIMs) in India are higher than the base interest rates in some other countries. Not that NIMs can be brought down overnight. But there should be some effort to bring down operational costs, increase costs of credit where profit margins are high (this principle is being applied only to microfinance today!), plough back resources being hoarded by individuals, corporates and institutions (accumulation of cash and bank balances, surplus SLR maintained by banks, availing bank credit while sitting on huge cash are all symptoms which need correction) and so on.

M G WARRIER

4 years ago

The FM by some fast moves as late as on October 29, gave an impression that he was pressing for a cut in the base rates by RBI on October 30. Outsiders have been given an impression that RBI didn’t oblige. The sound and fury about interest rates and CRR are perhaps affecting the coordinated efforts by GOI and RBI to flush out the funds available in the form of excess SLR maintained by banks, huge amounts of cash with PSUs and corporates which should be prudentially deployed to reduce liquidity constraints in the system. Perhaps such measures may make available more funds than that released by the present CRR cut.

More trouble ahead for Kingfisher Airlines over dues

The Revenue Department has decided to move the Supreme Court to expedite recovery of about Rs330 crore dues from Vijay Mallya-owned Kingfisher 

 
New Delhi: Kingfisher Airlines, which days ago emerged out of an impasse over salary payment to its staff, is likely to face more trouble soon with the Revenue Department deciding to move the Supreme Court to expedite recovery of about Rs330 crore dues, reports PTI.
 
The department's decision to move a special leave petition (SLP) comes in the backdrop of the Airports Authority of India (AAI) also asking it to vacate two hangars in Kolkata and Chennai airports to recover dues worth Rs293 crore, official sources said.
 
The SLP, which is to be filed jointly by the Income Tax and Service Tax departments, would apprise the apex court "of the magnitude of pending dues to the government" and seek vacation of a 26th September Karnataka High Court order restraining the I-T department from making "further recovery".
 
Following this, the I-T department had lifted its attachment orders on the airline's bank accounts.
 
While the I-T department dues stand at around Rs269 crore, the airline owes Rs60 crore to Service Tax department.
 
The sources said the SLP would be moved soon by both the arms of the Revenue Department jointly.
 
The decision to move the SLP was taken recently by the apex policy making body of both the departments - the Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC) - at a meeting in the Finance Ministry.
 
"It has been decided in the meeting that a proposal should be moved by the Chief Commissioner Income Tax Bangalore for filing SLP against the vacation of stay of recovery proceedings (against Kingfisher) granted by the Karnataka High court," a note prepared by the CBDT said. The beleaguered carrier is assessed by the Bangalore I-T circle.
 
In a separate development, the AAI has shot off a letter to Kingfisher asking it to vacate two hangars it occupies at Kolkata and Chennai airports, official sources said.
 

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COMMENTS

rajeshpai

4 years ago

Isn't it possible to initiate criminal action against the great Dr Vijay Mallya, for having misused and utilised Government money that he had no business to divert in the first place??
Why are the agencies going slow on this?
Because he is the King Of Good Times??

Till such time he clears everyone to the last rupee, his airline should not be allowed to fly.
Otherwise the same story will repeat.
Has he paid all his creditors including the oil companies?
He has been taking everybody for a royal ride using his name and connections at high places.

It is time he is brought down to earth or rather shot down and shown his real place.Why not change him for incompetent management from all of his group companies??

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