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RBI asked to keep close watch on fund diversion
There are a few instances where defaulting borrowers diverted funds by opening multiple current accounts outside the members of the consortium that provided the debt
 
The Finance Ministry has asked Reserve Bank of India (RBI) to tighten lending norms to prevent borrowers from opening multiple current account outside their consortium of banks.
 
There are a few instances where defaulting borrowers indulged in diversion of funds have taken place by opening of multiple current account outside the members of the consortium.
 
Therefore, sources said, the Finance Ministry has urged RBI to tighten the norms and monitoring system so that such activities could be prevented.
 
According to sources, Kingfisher Airlines allegedly diverted funds by opening a current account in HDFC Bank and has a balance of Rs7.5 crore as on date.
 
This fact was not known to the consortium of lenders headed by State Bank of India (SBI). These banks have an outstanding debt of Rs6,521 crore from the now-grounded carrier.
 
Such diversion can be monitored by Reserve Bank as it is sector regulator and there is a need to strengthen the monitoring mechanism.
 
There has been a spate of defaults taking place in banking system. Majority of them are due to slow economic growth but there is small proportion of cases where defaults are intentional.
 
Recently, the Finance Ministry had ordered limited forensic audit into some non-performing accounts of Kolkata— based UCO Bank to find out whether there were any irregularities in sanction of loans.
 
Forensic audit is being conducted against Dena Bank and Oriental Bank of Commerce (OBC) where some officials were suspected of misappropriating funds worth Rs436 crore from their fixed deposit customers.
 
Gross NPA of the public sector banks increased to Rs2.27 lakh crore at the end of March 2014 from Rs1.64 lakh crore a year ago.
 
Financial Stability Report released by RBI recently said that infrastructure, iron and steel, textiles, mining and aviation services contributed significantly to the level of stressed advances.
 
The share of these five sub-sectors in total advances is the highest for public sector banks.
 
The amount of loan restructured rose more than 11-fold between 2010-11 and 2012-13.
 
At the end of 2010-11, the restructured loans stood at Rs6,614.40 crore that rose significantly to Rs76,479.06 crore at the end of 2012-13.

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COMMENTS

rs

2 years ago

There should be restriction on the bank which allows opening of current account in the name of customers who have borrowed from elsewhere. If banks knowingly open it, they should be penalised. The consortium members also should not be careless as any movement of funds from their account to another Bank should put them on alert.

Supreme Court rejects Nithyananda’s plea against potency test
The apex court had also said that there is no reason why an accused in a rape case should not be subjected to potency test
 
Controversial self-proclaimed godman Nithyananda will have to undergo potency test in a 2010 rape case with the Supreme Court on Wednesday dismissing his plea. 
 
Nithyananda had challenged the Karnataka High Court’s order directing him to take the medical test.
 
A Bench headed by Justice Ranjana Prakash Desai refused to give any relief to Nithyananda.
 
The Bench, while hearing the case, on 20th August had questioned the controversial godman for his reluctance to undergo the test, saying such examinations are becoming necessary day-by-day in view of rise in rape cases.
 
The Bench had also said that there is no reason why an accused in a rape case should not be subjected to potency test and had questioned the police for delay in conducting the test in the 2010 case.
 
The apex court had on 21st August reserved its verdict on Nithyananda’s plea.
 
The Karnataka High Court had on 1st August stayed the non-bailable arrest warrant issued by a Ramanagaram court against Nithyananda and four of his followers in connection with the case.
 
It had directed Nithyananda to present himself before the investigating officer for the medical test and also to appear before the Chief Judicial Magistrate (CJM), Ramanagaram, on 18th August.
 
It had passed the order on the petitions filed by Nithyananda and his followers questioning the 28th July order of the CJM.
 
They had claimed that the Chief Judicial Magistrate was not justified in issuing the non-bailable arrest warrant against them as the high court in its 16th July order did not direct them to be present before the CJM on 28th July, but it was the date given for the trial court to commence hearing in the rape case, which was pending for four years.
 
In its 16th July order, the High Court had upheld the 2012 order of the CJM, who had allowed the plea of the Criminal Investigation Department (CID) to subject Nithyananda to medical test to find out whether or not he was capable of having sexual intercourse, and also to collect his blood and voice samples.
 
Observing that Nithyananda had been granted regular bail, the high court in the 16th July order had made it clear that he should be taken into custody only for the limited purpose of subjecting him to medical test and for collecting voice and blood samples, if he voluntarily failed to appear before the investigating officer.

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COMMENTS

M P Rao

2 years ago

1) Anybody who is accused of sexual misconduct should not be allowed to refuse to undergo potency test, especially if he denies it.
2) Only those who have something to hide and avoid or delay the Investigation and / prosecution only indulge in legal obstructions.
3) Anyone who indulged in sexual misconduct cannot be a godman and shouldn't be allowed to become a Mathadhipathi. :(

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