Bombay High Court has ruled that police are duty-bound to extend assistance to banks or financial institutions when they are acting under the Act to take possession of liquidated properties
Mumbai: In a significant order for the banking sector, Bombay High Court has ruled that police are duty-bound to extend assistance to banks or financial institutions when they are acting under the Maharashtra Cooperative Societies Act to take possession of liquidated properties, reports PTI.
The recent ruling by the division bench of Justices AM Khanvilkar and RD Dhanuka came on a petition which alleged that police did not provide protection to the officers of Kolhapur-based Ravi Cooperative Bank for taking possession of a property.
Petitioner Tulsidas Narsinga Vhatkar had bought the property in an auction conducted by the bank. According to him, after the auction, the bank requested the Superintendent of Police (SP) to provide protection for the purpose of taking possession from the original owner.
But the SP, relying on a Supreme Court decision, said it would not be possible. The petitioner on the other hand cited Maharashtra Government's circular of January 2008 which directs police authorities to give assistance/protection to the officers of the Cooperative Department.
Agreeing with the petitioner, the judges held: "If Respondent No 1 (liquidator of the Bank) seeks assistance/ protection to enable him to take steps and perform his statutory duties, we fail to understand as to how the decision of the Apex Court would come in the way of the Superintendent of Police to provide assistance and protection to the Government servant for discharging his statutory duty."
"It is not the case of the bank that forcible possession is being taken over by other than a due process," the bench noted.
If the liquidator intends to proceed to effectuate the auction, which has attained finality, he/she being a government servant, necessary protection must be extended by the local police, the court ruled.
The fact that the present petition was filed by the auction-purchaser does not absolve the police from performing their duty to give protection to a public servant, the judges said.
The move will provide additional time to some banks that need to enhance their capital base in line with the new norms for strengthening the resilience of the global banking system
Mumbai: The Reserve Bank of India (RBI) has extended the date for implementation of Basel III, the global capital norms for banks, by three months to 1 April 2012, reports PTI.
"The Reserve Bank of India has rescheduled the start date for implementation of Basel III to 1 April 2013 from 1 January 2013," the central bank said.
RBI, however, did not provide reasons behind the rescheduling.
The move, experts said, will provide additional time to some banks that need to enhance their capital base in line with the new norms for strengthening the resilience of the global banking system.
RBI further said that India will closely monitor the progress on Basel III implementation in other countries, particularly the major ones, who are the members of the Basel Committee.
RBI had issued guidelines on the implementation of Basel III capital regulation in India in May this year. These guidelines were to be implemented from 1 January 2013 in a phased manner and were to be fully implemented by March 2018.
As per the new global norms, banks will have to hold core capital of at least 7% of risk weighted assets by 2018.
In September, RBI Governor D Subbarao had said that Indian banks will require an additional capital of Rs5 lakh crore (Rs5 trillion) to meet the new global banking norms, Basel III, RBI Governor D Subbarao said.
Of the total Rs5 lakh crore, equity capital will be Rs1.75 lakh crore, while Rs3.25 lakh crore will have to come as the non-equity portion.
The government, which owns 70% of the banking system, alone will have to pump in Rs90,000 crore equity to retain its shareholding in the public sector banks (PSBs) at the current level to meet the norms.
The Basel Committee recently said that the 11 member jurisdictions including India, Australia, Canada, China and Japan, have published the final set of Basel III regulations effective from the start date of 1 January 2013.
Seven other jurisdictions including the European Union and the United States have issued draft regulations, and have indicated that they are working towards issuing final versions as quickly as possible.
While profit margins are important for sustaining banking operations, the cost of operational inefficiencies of banks should not be passed on to customers by way of higher service charges and fees said the RBI's deputy governor
Chennai: Cautioning banks charging high prices on products offered to customers, Reserve Bank of India (RBI)'s deputy governor KC Chakrabarty said a new set of guidelines would be announced during the coming Ombudsman Conference in Mumbai, reports PTI.
"I am telling you that if you believe that the pricing has become exploratory then we will intervene. We have intervened in the case of micro-finance institutions. What I am saying is that discriminatory pricing (on products offered to customers) should not be there. Pricing should be non-discriminatory," Chakrabarty told reporters.
During the Ombudsman Conference, to be chaired by RBI Governor D Subbarao, on 4th January, new guidelines would be announced. "Some new guidelines will come on how it (RBI) can be more stringent in pricing the products to customers of banks", he said.
"(Banks) you have to understand the customer needs and be reasonable to customers," he said, adding, "do not do lip service."
Observing that banks charge high interest rates for offering educational loans compared to home loans, he said "I am only raising a question why it cannot be reduced."
Earlier, after releasing a book 'Indian Banking Reforms and After', written by banker Dharmalingam Venugopal, also Indian Overseas Bank employee, Chakrabarty said banks need to ensure that they maintain high level of productivity and efficiency in their operations.
"While profit margins are important for sustaining banking operations, the cost of operational inefficiencies of banks should not be passed on to customers by way of higher service charges and fees," he warned.
On restructuring of loans by banks offered to individuals and enterprises, he said an element of discrimination was practiced by the banks in restructuring of loans.
"Analysis of available data indicates that the larger borrowers have invariably received benefit of restructuring of their loans, while the restructuring in case of SMEs has remained low. I believe with a timely intervention and support from the banks, this sector would have definitely shown much lower levels of impaired assets than it does", he said.
Stating that business operations of banks should be "customer-centric" in nature, Chakrabarty said, "this should be reflected in all aspects of banking operations including creation of customised products and services".
To a query on the Union Government's proposal to roll out cash-transfer scheme from 1 January 2013, he said, "we were asking (banks) to do it for more than two years. Now, it has encouraged the government to come out with this particular scheme".
"Now everybody has a bank account and if the money is credited into the account, it can stop the leakages. It will also make the financial inclusion more effective. I am telling them (banks) for the last three years as part of their normal business, but now they (banks) are forced to do." he said.