Gold smuggling in 2013 has jumped seven times and has left narcotics behind as the most popular product among smugglers, according to sources in customs department. From travellers laden head-to-toe in jewellery to passengers who conceal carbon-wrapped gold pieces in their bodies, Indians are smuggling in more bullion than ever before, since the government put massive restrictions on gold imports to control India’s current account deficit. India imposed a 10% duty on bullion and a 15% tariff on jewellery which led to a plunge in imports from a record 162 tonnes in May to 24 tonnes in October.
But the World Gold Council estimates that 150 to 200 tonnes of smuggled gold will enter India in 2013, in addition to the 900 tonnes of official demand. Official data, showing a sharp fall in gold buying which has helped narrow India’s current account gap, underestimate the real level of gold flows. India’s customs department doubled seizure of gold between April and September compared to that in the entire 2012. Seizures reflect just 1%-2% of the gold smuggled.
RBI has issued draft guidelines permitting banks to enter the insurance broking business with riders such as mandatory disclosure of remuneration received from insurers and having dedicated staff for the department. Currently, under the bancassurance model, banks are allowed to become corporate agents of one life and one general insurer while, under the broking business, they will be able to sell products of multiple companies.
RBI wants banks to disclose details of remuneration in any form from the broking business to the customers and report fees/ brokerage in the ‘notes to accounts’ in their balance-sheets. There should be dedicated and specialised staff for the insurance broking business who should not be given any incentive for getting business for their performance, according to the guidelines. The public has been given time till 31st December for feedback on the draft guidelines.
The Bombay High Court refused to stop publication of photographs of a defaulter firm in newspapers, saying that it was in larger public interest. The division bench of Justices VM Kanade and MS Sonak refused to grant relief to the firm DJ Exim and its directors. State Bank of India, on 10 October 2013, had issued the firm a letter warning that if it did not repay the loan amount, photographs of the directors would be published in national newspapers. The company moved the High Court against this saying that no rule permits banks to publish photos.
The Court observed that publishing of photographs serves the purpose of creating awareness and cautioning prospective clients. “In our view, there would be no impediment to publication of photos of the defaulters. There is no legal bar which expressly prohibits the bank from publishing photos. However, the decision to resort to such measures should be taken by a very senior level official not below the rank of general manager of the bank.”