Companies & Sectors
ICICI Bank pays Rs53 lakh in gold coin duty evasion case

ICICI Bank has manufactured branded gold coins through job-worker for their corporate customers and sold or redeemed through their branches located across India during 1 March 2011 to 16 March 2012 without paying the duty

 
New Delhi: Country's largest private sector lender ICICI Bank has paid Rs53 lakh in a duty evasion case relating to manufacture and sale of gold coins, reports PTI.
 
"ICICI Bank being the brand owner has admitted the facts and implication (in the duty evasion case) and paid an amount of Rs53.08 lakh towards their duty liability including interest of Rs7.29 lakh," Central Excise Commissionerate (Kolkata) said in a statement.
 
The duty evasion on manufacture and sale of gold coins by the ICICI Bank was discovered by the Anti-Evasion Unit of the Kolkata Commissionerate, it added.
 
Although the ICICI Bank has admitted the facts and paid Rs53 lakhs, it said, "further investigation is in progress".
 
During inquiry, the statement added, it was "revealed that ICICI Bank has manufactured branded gold coins through job-worker for their corporate customers and sold/redeemed through their branches located throughout India during 1 March 2011 to 16 March 2012 without payment of duty...and thereby evaded central excise duty to the tune of Rs 45.79 lakh".
 
The duty was imposed under Rule 12AA of the Central Excise Rules, 2002 which deals with registration, maintenance of accounts, payment of duty etc. with regard to manufacture of jewellery on job work basis.
 
Job-worker has been defined as a person engaged in manufacture or processing of article of jewellery on behalf and under the instructions of the brand owner.
 

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RBI widens StanChart, HSBC probe to other foreign banks

Besides RBI, capital market regulator SEBI may also join the investigations, as there are concerns of funds from these banks being routed to stock markets through foreign investors and other entities

 
New Delhi: The Reserve Bank of India (RBI) has widened its probe into the affairs of British banking giants HSBC and Standard Chartered to a host of other foreign banks for alleged breach of controls against money laundering and terror financing, reports PTI.
 
Besides, capital market regulator Securities and Exchange Board of India (SEBI) may also join the investigations, as there are concerns of funds from these banks being routed to the stock market through foreign investors and other entities, sources said.
 
Standard Chartered Bank (StanChart) is listed in the Indian stock market.
 
A senior regulatory authority official said the inspections are being conducted to ensure these banks' compliance to various fair banking norms in the wake of certain global events.
 
However, executives at some of the banks admitted that queries being raised by the regulators are serious in nature and particularly aimed at ensuring effective controls against money laundering and financing of terrorism, among others.
 
The investigations by Indian agencies follow developments in the US, where a host of European banks, besides StanChart and HSBC, are being investigated for their alleged role in exposing the American financial system to money laundering and terror financing risks.
 
Sources said Indian investigations would not be affected by the recent settlement reached by StanChart in the US, wherein it agreed to pay $340 million to settle charges that it entered into secret transactions involving $250 billion with Iran despite sanctions against that country.
 
The settlement has been reached only with respect to an investigation by the New York state banking regulator, the New York Department of Financial Services and does not cover the probes being conducted by the various federal regulators in the US, including the Treasury Department.
 
Last week, the Indian government informed the Parliament that Reserve Bank of India (RBI) is scrutinising the anti- money laundering (AML) and know your customer (KYC) systems of StanChart and HSBC.
 
Besides, Financial Intelligence Unit-India (FIU-IND) has also initiated a fact-finding exercise related to HSBC's operations in India and its compliance to AML and counter financing of terrorism (CFT) regime.
 
RBI is also seeking details from British financial sector regulator Financial Services Authority (FSA) about the two UK-based global banking giants, who have significant presence in India and whose outsourcing of key oversight jobs to India has come under the US scanner in separate probes related to issues like money laundering and terror financing.
 
Both the matters have come to the fore within a month's time, raising serious concerns over the impact on the image of Indian outsourcing industry and possible implication on India's fight against money laundering and terror funding.
 
Indian agencies are gathering all possible details about the two banks, as also various other banks under scanner of the US regulators, for any possible lapse in their compliance to controls against money laundering and terror financing.
 
RBI and UK's FSA signed a new memorandum of understanding (MoU) last month for exchange of information and co-operation in surveillance operations.
 
The MoU provides for period discussions between RBI and FSA about matters like HSBC and StanChart, along with other supervisory developments and matters concerning banks having operations in India and the UK.
 
New York state's key banking regulator, the Department of Financial Services (DFS), had accused StanChart of hiding about 60,000 secret transactions with the Iranian government, involving a whopping $250 billion, and exposing the US financial system to terrorists, weapon dealers and drug kingpins.
 
HSBC's staff in India have also come under the scanner in a separate probe in the US for deficiencies in their role as "offshore reviewers" of the global banking giant's compliance to safety mechanism against money laundering and terrorist financing.
 
Stanchart was also charged of having deficient money laundering controls in its outsourcing of work to a captive unit in India.
 
Another probe found that an OCC (Office of Comptroller of the Currency, which is the primary federal regulator for banks in the US) visit to India in 2007 had revealed "weak monitoring procedures" in HSBC's internal control systems.
 
While HSBC has been charged with outsourcing these jobs mostly as cost saving measures, Stanchart has been accused of sending such important functions to offshore locations to escape "watchful eye" of the US regulators.
 
Besides seeking information from the UK regulator, the RBI is also waiting for inputs from the US regulators, including the US Federal Reserve, state regulators and other agencies, sources said.
 
RBI's main focus is on the banking operations of HSBC and Stanchart in India and therefore it is relying mostly on assistance from the UK, where these banks are headquartered.
 

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SEBI mulls IPO investments through mobile, credit cards

A final decision would be taken by SEBI after examining operational and legal feasibilities of enabling investors to make payments for IPOs through ATM, debit and credit cards and mobile banking

 
New Delhi: In a major leap towards using latest technology in financial markets, market regulator Securities and Exchange Board of India (SEBI) plans to allow investors to make payments for initial public offerings (IPOs) through ATM, debit and credit cards, as also via mobile banking, reports PTI.
 
A final decision would be taken by SEBI after examining operational and legal feasibilities of enabling investors to make such payments for IPOs, a senior official said.
 
The proposed move is part of SEBI's efforts to attract more and more investors to the market through IPO route.
 
SEBI has already announced various steps for reforms in the primary market, which include increasing the reach of IPOs in electronic form through nation-wide broker network of stock exchanges.
 
After its last board meeting on 16th August, SEBI Chairman UK Sinha said investors can approach brokers at over 1,000 locations to apply in IPOs physically or electronically.
 
Stock exchanges have also been asked to facilitate investors to view the status of their IPO applications on the websites, similar to the secondary market transactions.
 
Besides, SEBI has modified its rules to enable retail applicants to get a minimum lot of shares in IPOs.
 
SEBI has also decided to make the brokers responsible for uploading the bid on the exchange platform and for banking the cheque and handling of application supported by blocked amount (ASBA) system. In ASBA system, the money remains in the applicant's bank account till the time of share allotment.
 
The brokers would be compensated by the issuer, so that they are interested in directly or indirectly marketing the issue as well.
 

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