Companies & Sectors
HSBC to pay $1.9 billion to settle US claims: report

The figure includes nearly $1.3 billion, a record amount for a bank, as part of a deferred prosecution agreement besides a civil fine of more than %650 million that HSBC may have to shell out

 
Washington: US authorities plan to announce a record $1.9 billion settlement with British bank HSBC to end allegations of money laundering, reports PTI quoting a story from The Wall Street Journal website.
 
The deal could be announced as early as today in New York, officials told the Journal.
 
Citing people familiar with the matter, the Journal said yesterday that the figure includes nearly $1.3 billion, a record amount for a bank, as part of a deferred prosecution agreement.
 
The London-based bank also would pay a civil fine of more than $650 million, according to people briefed on the issue, the newspaper said.
 
US lawmakers have accused the global bank of giving Iran, terrorists and drug dealers access to the US financial system.
 
Criminal investigators have been pursuing some of the same allegations highlighted in the Senate probe, the Journal noted.
 
HSBC in July admitted to poor anti-laundering controls.
 
The settlement would resolve investigations by the Justice and Treasury departments and other federal agencies, as well as the Manhattan district attorney.
 
As part of the HSBC settlement deal, the Journal said, citing a government official, it will admit to violating the Bank Secrecy Act and the Trading with the Enemy Act.
 
The US Treasury declined to comment on the Journal report.
 
In early November HSBC said it had increased the amount set aside for fines linked to money-laundering in the United States to $1.5 billion.
 
The Journal report came the same day the US Treasury announced that another British bank, Standard Chartered, would pay $327 million to settle charges it violated US sanctions on Iran, Myanmar, Libya and Sudan.
 
For Standard Chartered, the fines from the Treasury and other US federal and local regulators brought to $667 million the total it has been charged for sanctions violations. 
 

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RBI’s KYC guidelines: You can now open a bank account with just one document

The latest RBI KYC guidelines for opening new bank accounts make it a lot easier for common man as only one document would suffice as proof of identity and proof of residence

 
The Reserve Bank of India (RBI) has come with modifications in KYC (Know Your Customer) guidelines. These modifications have been introduced as per the circular date 10 December 2012 (RBI/2012-13/322 DBOD.AML.BC. No. 65/14.01.001/2012-13). It is important to note that modifications are part of Second Quarter Review of Monetary Policy 2012-13 announced on 30 October 2012, which proposed to review the existing KYC norms for simplifying them within the provisions of PML Act/Rules and international standards.
Following are major modifications introduced in the KYC guidelines:

One document to be accepted as Proof of Identity and Proof of Residence: As per the circular, if a customer submits a document which has his identity details as well as address details, the bank should not insist on two separate documents for POA (Proof of Address) and POI (Proof of Identity). The circular says, “If the address on the document submitted for identity proof by the prospective customer is same as that declared by him/her in the account opening form, the document may be accepted as a valid proof of both identity and address”. This is indeed a significant change as customers will not be required to carry two sets of documents if one single document like passport has both address and identity details.

Introduction not mandatory for opening accounts: The latest circular has explicitly mentioned that introduction is not mandatory for opening bank accounts. The circular categorically states, “Since introduction is not necessary for opening of accounts under PML Act and Rules or Reserve Bank’s extant KYC instructions, banks should not insist on introduction for opening bank accounts of customers”. 
 
Acceptance of Aadhaar letter for KYC purposes: Based on the feedback received from Unique Identification Authority of India (UIDAI), RBI has instructed banks to accept Aadhaar letters for the purpose of POA, if the address provided by the account holder is the same as that on Aadhaar letter.
 
Other Changes: As part other important modifications introduced in the KYC guidelines, the RBI has asked banks to accept NREGA (National Rural Employment Guarantee Act) cards as an officially valid document for opening of bank accounts. Also in cases of small accounts the RBI has asked banks to open accounts to increase financial inclusion in the country. 
 
Read other articles from Vivek Sharma, here.
 
(Vivek Sharma has worked for 17 years in the stock market, debt market and banking. He is a post graduate in Economics and MBA in Finance. He writes on personal finance and economics and is invited as an expert on personal finance shows.)
 

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COMMENTS

Suresh

3 years ago

Why these instructions are not incorporated in RBI's subsequent Master circular No.DBOD.AML.BC.No.24/14.01.001/2013-14 dated July 1, 2013

Vaibhav Dhoka

4 years ago

RBI should see that all banks across country enforce the same in word and spirit.

REPLY

vivek sharma

In Reply to Vaibhav Dhoka 4 years ago

Mr Vaibhav Dhoka,

I fully agree with you. It is extremely important that KYC guidelines are implemented by all banks so that customers could benefit from it.

RTI Judgement Series: Citizens must get info without citing any reason or credential check

The citizen needs to give no reasons nor are his credentials to be checked for giving the information. If the third party objects to giving the information, the PIO must take his objections and see if any of the exemption clauses of Section 8(1) apply. If none of the exemption clauses apply, information has to be given. This is the seventh in a series of important judgements given by Shailesh Gandhi, former CIC that can be used or quoted in an RTI application

 
The Public Information Officer (PIO) is obliged to provide information sought under the Right to Information (RTI) Act. Under this Act, providing information is the rule and denial an exception and the citizen needs to give no reasons nor are his credentials to be checked for giving the information. While giving this important judgement, Shailesh Gandhi, former Central Information Commissioner ratified that information, which cannot be denied to the Parliament or a state legislature, shall not be denied to a person.
 
“Any attempt to constrict or deny information to the Sovereign Citizen of India without the explicit sanction of the law will be going against the rule of law. If the third party objects to giving the information, the PIO must take his objections and see if any of the exemption clauses of Section 8(1) apply. If any of the exemption clauses apply, the PIO is then obliged to see if there is a larger public interest in disclosure. If none of the exemption clauses apply, information has to be given,” the Central Information Commission (CIC) said in its order issued on 27 February 2009.
 
Delhi-based Mahesh Kumar Sharma has asked the Delhi Jal Board for certified copies of the documents submitted by Zile Singh for getting a water connection number 62261K sanctioned on 7 August 2000. The PIO, considering this a third party case, sought no objection certificate from Zile Singh. However, instead of Zile Singh, one Archana Sharma and Rakesh Kumar Sharma sent the reply stating that they did not want to disclose any information regarding above property to anyone including Mahesh Kumar Sharma.
 
Ms Sharma sent a second letter requesting “not to give or allow any details through certified copies, uncertified copies of personnel inspection about the property B-497, where the water connection was provided and which she had purchased from Zile Singh.”
 
The PIO therefore denied the information to Mahesh Kumar, who then approached the First Appellate Authority (FAA). He told the FAA that he is also son of Zile Singh who is dead. Here, instead of considering and dealing with his application under the provisions of the RTI Act, the FAA “has chosen to give gratuitous advice of how RTI should be used,” the Commission noted.
 
During the hearing before the Commission, the PIO contented that the information sought by the appellant (Mahesh Kumar) has no relationship to public interest and the credentials of the information-seeker must be ascertained. The PIO also contended that the information is provided by the consumer in a fiduciary relationship and hence cannot be given.
 
Section 3 of the Act defines the purpose of the Act very succinctly:
‘Subject to the provisions of this Act, all citizens shall have the right to information.’
 
“With a great economy of words this section is perhaps the most important section of the RTI Act, 2005. The Sovereign Citizen of India has the right to access all information since he owns it, and this right may be curtailed only by the limited provisions of this Act,” the CIC said.
 
In his order, Mr Gandhi, the CIC said, “It will be important to note that in sub-section 1(b)(xii) & (xiii), the Act mandates that public authorities will suo moto declare details of beneficiaries of subsidy programmes as well as particulars of recipients of concessions, permits or authorisations granted by it.”
 
Section 6(2) states, ‘An applicant making a request for information shall not be required to give any reason for requesting the information or any other personal details except those that may be necessary for contacting him.’
 
Section 8(1) specifies the information which is exempted. The relevant provisions in this case are, ‘Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen,-
(e) information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information;  and
(j) information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual unless the Central Public Information Officer or the State Public Information Officer or the appellate authority, as the case may be, is satisfied that the larger public interest justifies the disclosure of such information’
 
Parliament has clarified the exemptions of Section 8(1) with the proviso,
‘Provided that the information, which cannot be denied to the Parliament or a state legislature shall not be denied to any person.’
 
With this sentence Parliament has recognized that the individual citizen—the sovereign of this democracy—gives it legitimacy, and therefore its right to get information cannot exceed the right of its master, the Commission said.
 
Mr Gandhi said, even if the exemptions of Section 8(1) apply in a particular matter, if there is larger public interest, information shall be disclosed. “It is useful to comment here that an applicant does not have to show any public interest for disclosure of any information, unless a specific exemption under Section 8(1) is established,” he said.
 
The Commission said, in this matter, where the information belongs to late Zile Singh and not to Archana Sharma, who has objected. Mahesh Kumar claims to be son of Zile Singh, which is contested by third party (Ms Sharma). However, the Commission said it does not find it necessary to rule on these matters.
 
In the case, the third party invoked the protection of Section 8(1)(e) of the RTI Act. The traditional definition of a fiduciary is a person who occupies a position of trust in relation to someone else, therefore requiring him to act for the latter’s benefit within the scope of that relationship.
 
“In the instant case a key element of the relationship between the applicant for a water connection and the Delhi Jal Board certainly cannot be said to be primarily of trust by the applicant in the Public authority, nor can it be said that the information was given for the benefit of the giver. The information was provided to get an authorization for a water connection,” the Commission said.
 
Under Section 8(1)(j) information which has been exempted is defined as:
“information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual unless the Central Public Information Officer or the State Public Information Officer or the appellate authority, as the case may be, is satisfied that the larger public interest justifies the disclosure of such information.”
To qualify for this exemption the information must satisfy the following criteria:
1. It must be personal information.  
   
The Commission said, “In common language we would ascribe the adjective ‘personal’ to an attribute which applies to an individual and not to an Institution or a Corporate. From this it flows that ‘personal’ cannot be related to institutions, organisations or corporates. Hence we could state that Section 8(1)(j) cannot be applied when the information concerns institutions, organisations or corporates.”
 
Where the State routinely obtains information from citizens, this information is in relationship to a public activity and will not be an intrusion on privacy. However, the concept of ‘privacy’ is related to the society and different societies would look at these differently. India has not codified this right so far, hence in balancing the Right to Information of Citizens and the individual's Right to Privacy, the Citizen's Right to Information would be given greater weightage, Mr Gandhi noted in the order.
 
He said, “...we can accept that disclosure of information which is routinely collected by the public authority and routinely provided by individuals, would not be an invasion on the privacy of an individual and there will only be a few exceptions to this rule which might relate to information which is obtained by a public authority while using extraordinary powers such as in the case of a raid or phone-tapping.”
 
“If the third party objects to giving the information, the PIO must take his objections and see if any of the exemption clauses of Section 8(1) apply. If the any of the exemption clauses apply, the PIO is then obliged to see if there is a larger Public interest in disclosure. If none of the exemption clauses apply, information has to be given,” the Commission said.
 
The Commission disallowed the third party’s objections made about the exemptions of Section 8(1)(e) & (j) and asked the PIO to provide the information before 15 March 2009.
 
CENTRAL INFORMATION COMMISSION
 
Decision No. CIC /AT/A/2008/01262//SG/2109
 
Appeal No. CIC/AT/A/2008/01262/
 
 
Appellant                                                            : Mahesh Kumar Sharma,            
                                                                                      Delhi -110034.
                                                                     
Respondent 1                                                    : PIO,
                                                                                      Delhi Jal Board,
                                                                                      Govt. of NCT of Delhi.
                                                                                      Varunalaya Phase - II, Jhandewalan
                                                                                      Karol Bagh,
                                                                                      New Delhi-110005. 
 

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COMMENTS

SUJIT KATYAL

4 years ago

Hon. Shailesh Gandhi has done yeoman service for India.

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