HSBC, which had to pay US authorities $1.9 billion in settlement on money laundering charges, said that to continue providing services to these groups and individuals in UK would be outside the bank’s risk appetite
In a controversial move, global private banking major HSBC has closed a number of “risky” accounts belonging to Muslim groups and individuals in the UK.
HSBC has written to one of London’s biggest mosques at Finsbury Park and other organisations, including an Islamic think tank, saying that to continue providing services would be outside the bank’s “risk appetite”.
It said decisions to close accounts were “absolutely not based on race or religion”.
The bank’s statement said, “We do not discuss relationships we may or may not have with a customer, nor confirm whether an individual or business is, or has been a customer.
“Discrimination against customers on grounds of race or religion is immoral, unacceptable and illegal, and HSBC has comprehensive rules and policies in place to ensure race or religion are never factors in banking decisions,” it said.
Khalid Oumar, one of the trustees of Finsbury Park mosque, questioned the motives behind the letters. He said, “The letters that have been sent and the letters that we received do not give any reason why the accounts were closed in the first place”.
“That has led us to believe that the only reason this has happened is because of an Islamophobic campaign targeting Muslim charities in the UK,” he added.
Until 2005, the mosque was run by Abu Hamza, who in May this year was convicted of terrorism offences in the US.
“The positive work we have done since taking over from Abu Hamza to change the image of the mosque, there is nothing really that can explain (HSBC’s decision),” mosque chairman Mohammed Kozbar told the BBC.
In December 2012, HSBC had to pay US authorities $1.9 billion (£1.2 billion) in a settlement over money laundering, the largest paid in such a case.
It was alleged to have helped launder money belonging to drug cartels and states under US sanctions.
In August last year, it was reported that HSBC asked more than 40 embassies, consulates and High Commissions in the UK to close their accounts.
At the time, the bank said “HSBC has been applying a rolling programme of ‘five filter’ assessments to all its businesses since May 2011, and our services for embassies are no exception”.
ONGC will pay Rs13,200.10 crore and another Rs1,846.55 crore will come from OIL as fuel subsidy for paying to oil marketing companies like Indian Oil, HPCL and BPCL
The Oil Ministry has fixed the subsidy payout by upstream companies such as Oil and Natural Gas Corp (ONGC) and Oil India Ltd at Rs15,546.65 crore for the April-June quarter. Of this, ONGC will pay Rs13,200.10 crore and another Rs1,846.55 crore will come from OIL. State gas utility GAIL will pay Rs500 crore, official sources said.
Indian Oil Corp (IOC) will get Rs8,107 crore from upstream companies in fuel subsidy support for the first quarter, while Hindustan Petroleum Corp Ltd (HPCL) will get Rs3,608.88 crore. Bharat Petroleum Corp Ltd (BPCL) will get Rs3,830.56 crore from the fuel subsidy.
Fuel retailers IOC, HPCL and BPCL sell diesel, domestic LPG and kerosene at Government controlled rates which are way below the cost. The losses they incur are compensated through a combination of Government cash subsidy and support from upstream firms.
Insurance Bill is likely to be taken up for discussion in the Rajya Sabha on Monday
The Rajya Sabha is likely to take up on Monday the Insurance Bill, which seeks to hike foreign investment cap in the sector to 49% with a rider that management control remains with Indian promoters.
The Bill, which was listed in the Rajya Sabha agenda on Thursday, could not be taken up for discussion as the Opposition wanted more time to go through the amendments. The government has proposed as many as 97 amendments to the original Bill.
Finance Minister, Arun Jaitley, in the Budget 2014-15 speech had said that the insurance sector was investment starved and there was a need to increase the composite cap in the sector to 49%, with full Indian management and control, through the FIPB route.
Once approved by Parliament, it would help insurers to get the much needed capital from overseas partners.
Last week, the Cabinet gave a go-ahead to hike the foreign direct investment (FDI) cap in insurance sector to 49% with a rider that management control will remain in the hands of Indian promoters.
The approval to hike the FDI limit from the current 26%, a proposal which has been pending since 2008, is expected to attract long-term capital, besides improving the overall investment climate.