Maharashtra has rejected 265 premium-for-FSI proposals because it want flats from builders so that it can be given to needy people from Mumbai through lottery
Mumbai: Turning down a demand that builders be allowed to get additional floor space index (FSI) by paying premium in redeveloping old buildings of Maharashtra Housing & Area Development Authority (MHADA) in Mumbai, state Chief Minister Prithviraj Chavan on Tuesday said they would have to share housing stock with the Authority in redeveloped buildings, reports PTI.
Replying to a calling-attention notice by Subhash Desai (Shiv Sena) and others, Chavan said a meeting of local legislators would be held after the monsoon session on the issue. However, there would be no compromise on the flat sharing formula, he said.
Some members of the ruling Congress and Nationalist Congress Party (NCP) also backed the Opposition's demand, saying scrap the flat sharing formula and allow only premium payment for getting extra FSI.
In 2010, the state government amended the re-development scheme, Chavan said. In addition to premium payment, the state also gave builders an option of sharing flats for free with MHADA for procuring more FSI, he said.
But few builders opted for the flat sharing scheme because it is not profitable to them. "We have rejected 265 premium-for-FSI proposals because we want flats from builders so that they can be given to the needy persons through lottery. We don't want money because MHADA does not have land to build houses," he said.
Only 17 proposals for sharing of flats were cleared, he said adding 36 were being scrutinised. In this scheme, MHADA gets two shares of flats built for free while builder keeps one portion for selling them in open market or giving them to the members of redeveloped society.
The area of the rehabilitation component has a cap of 300 square feet or of the size before re-development. In any case, the flat should not be bigger than 750 sq ft.
The US Senate's Permanent Sub-committee on Investigations, said HSBC was found to be doing business with Al Rajhi Bank, whose key founder was an early financial benefactor of al Qaeda, and also have provided US dollars and services to some banks in Saudi Arabia and Bangladesh despite their links to terrorist financing
Washington: A US Senate panel has accused global banking giant HSBC of exposing the country's financial system to various terror financing, money laundering and drug trafficking activities with transactions worth billions of dollars, due to poor risk control systems at the bank, reports PTI.
Among others, HSBC was found to be doing business with Saudi Arabia's Al Rajhi Bank, whose key founder "was an early financial benefactor of al Qaeda," the US Senate's Permanent Sub-committee on Investigations has said after a year-long probe into the affairs of the global banking major.
The bank has also been accused of indulging in various questionable transactions with entities from countries like Mexico, Iran, North Korea, Saudi Arabia, Bangladesh, Syria, Cuba, Sudan, Burma, Cayman Islands, Japan and Russia.
Specifically, the bank has been alleged to have provided US dollars and banking services to some banks in Saudi Arabia and Bangladesh despite links to terrorist financing.
Reacting to the report from the Senate Sub-Committee, HSBC said in a statement that it would apologise for failing to meet regulatory and customer standards in the past.
The bank said it recognises that its "controls could and should have been stronger and more effective in order to spot and deal with unacceptable behaviour."
The Senate Sub-Committee last night released a 17-page summary report of its probe. The entire 330-page report, prepared after a year-long investigation into HSBC, along with more than 100 other documents including bank records and internal emails, is being released at a hearing here today.
The hearing would include testimony from HSBC officials and federal regulators, the sub-committee Chairman and Senator Carl Levin said in a statement.
The bank operates in many jurisdictions with weak Anti-Money Laundering (AML) controls, high risk clients, and high risk financial activities, including in Asia, the Middle East, and Africa, the Senate sub-committee said.
The sub-committee said that HSBC used its US bank (HBUS) as a gateway into the US financial system for some HSBC affiliates around the world to provide dollar-denominated services to clients "while playing fast and loose with US banking rules".
"For decades, HSBC has been one of the most active global banks in the Middle East, Asia, and Africa, despite being aware of the terrorist financing risks in those regions.
"In particular, HSBC has been active in Saudi Arabia, conducting substantial banking activities through affiliates as well as doing business with Saudi Arabia's largest private financial institution, Al Rajhi Bank," the report said.
"After the 9-11 terrorist attack in 2001, evidence began to emerge that Al Rajhi Bank and some of its owners had links to financing organisations associated with terrorism, including evidence that the bank's key founder was an early financial benefactor of al Qaeda.
"In 2005, HSBC announced internally that its affiliates should sever ties with Al Rajhi Bank, but then reversed itself four months later, leaving the decision up to each affiliate.
HSBC Middle East, among other HSBC affiliates, continued to do business with the bank," it added.
The probe further said that "due to poor AML controls, HBUS exposed the US to Mexican drug money, suspicious travelers cheques, bearer share corporations, and rogue jurisdictions."
Axis Bank reported 22% increase in its first quarter net profit. However, its non-performing assets are showing signs of deterioration which is a serious concern
Axis Bank’s net profit during the quarter ended June 2012 rose to Rs1,154 crore, registering a growth of 22% year-on-year (y-o-y). The bank’s net interest income rose 26% y-o-y to Rs2,180 crore during Q1FY13 from Rs1,724 crore during the same period last year. The net interest margin was 3.37% in Q1FY13, slightly higher compared to 3.28% during Q1FY12. However, over the last few years, its net interest margin has been flat and hardly making significant upwards movement. However, one concern the bank needs to deal with is its rising non-performing assets, which has increased from the previous quarter.
Its operating profit rose 26% y-o-y to Rs1,964 crore during Q1FY13 from Rs1,558 crore during Q1FY12, which is more than its three-quarter y-o-y average growth rate of 21%. It has disappointed on the revenue front, after seeing it grow only 29% to Rs7,818 crore, whereas its three-quarter y-o-y growth rate is 35%. Even though its return on equity is high (20%), its valuation low compared to its bigger peers (i.e. ICICI Bank and HDFC Bank) at an operating profit quoting at little more than five times its market capitalisation. Its low valuation, while cheap, is a cause for concern.
One nagging concern is the non-performing assets. Gross non-performing assets (Gross NPAs) as a proportion of gross customer assets stood at 0.94% as on 31st March 2012.
However, this increased to 1.06%, while net non-performing assets stood at 0.31%, up from 0.25% quarter-on-quarter. However, this number is more or less constant when compared to the same period last year, indicating bank’s difficulty in curtailing it. During the quarter, the slippages were recorded at Rs456 crore which resulted in a closing position of Rs2,092 crore of Gross NPAs as on 30th June 2012, as against Rs1,573 crore as on 30th June 2011. Despite this, the bank’s capital adequacy ratio (CAR) has improved by 50 basis percentage points (bps), to 13.03%, for the current quarter, from corresponding period last year.
It is pertinent to note that the current account portion of the current account savings account (CASA) has been steadily declining, which actually increases the cost of the bank. It has declined by more than 700 bps, or seven percentage points, from 50% it recorded in the 2008-09 fiscal to 43% at the close of the 2011-12 fiscal. According to the company’s press release, the daily average balances, both the current account and savings account put together grew 16% y-o-y, buoyed up by 22% increase in savings bank deposits. If more savings accounts are opened, it means banks will have to spend more money and its costs of funds will increase.
The bank’s loan book grew 30% y-o-y from Rs1,31,900 crore as on 30 June 2011 to Rs1,71,146 crore as on 30th June 2012. However, normalised y-o-y growth in advances would be 21%, adjusting for currency depreciation of roughly 25% during the year and a relatively lower base caused by run-offs in short-term loans in the previous period ended 30 June 2012, said the press release. While its overseas total assets increased by 27% to $6.15 billion, it puts itself more under the risk of exchange rate fluctuations.
One of the major events that took place this quarter was the approval of the demerger of the financial services business from Enam Securities Pvt Ltd. According to the press release, it said, “During the current quarter, pursuant to the order passed by the High Court of Gujarat at Ahmedabad, the equity shareholders and unsecured creditors of the Bank have at their meetings held on 23rd June 2012, approved the Scheme of Arrangement in respect of the demerger of the financial services business from Enam Securities Private Limited to the Bank and a simultaneous sale of such businesses to Axis Sales & Securities Limited, a wholly owned subsidiary of the Bank, with effect from 1st April, 2010. The Bank is now awaiting the necessary approvals under applicable law from various regulatory authorities to the Scheme of Arrangement and consequently, no effect of the acquisition has been given in the results for the current quarter.” Earlier, Enam Securities sold itself to Axis Bank.
The stock reacted negatively to the news and closed down 2.10% at Rs1,023.30 on the BSE.