The RBI has ordered a special audit of Bank of Rajasthan's accounts, suspecting violation of operational norms by the lender, including transparency in lending
The Reserve Bank of India (RBI) has ordered a special audit of private sector lender Bank of Rajasthan (BoR)'s accounts, suspecting violation of operational norms by the lender, including transparency in lending, reports PTI. The apex bank has appointed Deloitte Haskins and Sells to conduct the special audit.
Deloitte is expected to submit the report by the end of this month, which would enable the bank to take corrective measures, primarily the setting up of a credit committee.
Confirming this, Bank of Rajasthan's managing director and chief executive, G Padmanabhan, said, "We have requested the auditing firm to wind up the process by end-March, based on which we can take steps if it is on financial aspects, prior to finalising our Q4 results."
Amongst the issues being probed by the audit team include provisioning for non-performing assets and super-annuation benefits, accounting integrity issues and credit dispensation, Mr Padmanabhan told PTI.
The RBI is apparently not happy with the way BoR offered loans to its corporate clients, which presently forms a significant chunk of the lender's loan-book.
"The Bank traditionally did not have a credit committee, which might have come up as a concern with the central bank. I was in the process of setting up the committee when this order came," Mr Padmanabhan said.
The bank aims to set up the credit committee—the body that decides credit dispensation issues in banks—"as early as possible," Mr Padmanabhan said.
"What is happening is that all other banks have credit committees while we did not have one. These things have to be addressed now," he said.
Last month, the RBI imposed a fine of Rs25 lakh on BoR, charging it with violation of a host of norms including irregularities in transactions and misrepresentation of documents. The Bank has since paid the penalty.
Penalising the lender, the RBI said that the Bank had failed to adhere to norms pertaining to anti-money laundering, Know Your Customer (KYC) and irregularities in the conduct of accounts of a corporate group.
Besides, the apex bank said that BoR has also failed to provide some documents on the grounds that those documents were not available.
However, the ongoing issue will not affect the long-term business prospects of the Bank and it has duly addressed the concerns amongst its customers following the RBI's action, Mr Padmanabhan said.
"I don't think that there are any significant issues (with clients). I'm not saying that there are no issues at all. But these can be tackled. Specific instances, which have come to us, are being addressed," Mr Padmanabhan said.
The Bank started operations in 1943. It has a network of 463 branches across the country and over 20 lakh customers.
For the quarter ended December 2009, the net profit of the bank declined to Rs44.70 crore as against Rs49.20 crore in the year-ago period while its total revenues dropped to Rs373.70 crore from Rs419.80 crore.
The petition, though drafted more than a month ago, was filed today by advocate Devdutt Kamat on behalf of the apex court registry and the case would be argued by Attorney General GE Vahanvati
The Supreme Court (SC) on Monday filed an appeal before itself challenging the judgement of the Delhi High Court holding that the office of the Chief Justice of India (CJI) came under the ambit of the Right to Information (RTI) Act and was liable to reveal information under it, reports PTI.
The petition, which has been filed after CJI KG Balakrishnan had consultations with his fellow judges, raised the point that information held by the CJI is sensitive in nature and its revelation would hamper the judiciary's independence.
The petition, though drafted more than a month ago, was filed today by advocate Devdutt Kamat on behalf of the apex court registry and the case would be argued by Attorney General GE Vahanvati.
The apex court will be seeking an immediate stay on the High Court ruling, otherwise it would be under obligation to reveal information under the RTI Act.
In a path-breaking verdict, the Delhi High Court had on 12th January held that the office of the Chief Justice of India comes under the purview of the RTI Act and rejected a Supreme Court appeal, saying that judicial independence is not a judge's personal privilege but a responsibility cast upon him.
The verdict was being seen as a setback to Mr Balakrishnan, who has consistently been maintaining that his office does not come under the transparency law and hence cannot part with information like disclosure of judges' assets under the RTI Act.
Although the government has operationalised several provisions of the Competition Act, it is yet to notify Sections 5 and 6, which mandate companies to seek the CCI's go-ahead
The Indian government on Monday said that it is ready with the regulations to give teeth to the competition watchdog Competition Commission of India (CCI) for examining mergers and acquisitions (M&As) and would notify it once the Commission develops expertise in tackling such cases.
"A lot of capacity-building is still required (in the CCI). If we notify it (merger norms) today, you know we are not ready because after we notify it a lot of people will come, it will become a very major problem. We must be ready in terms of capacity—staff, expertise and other areas," corporate affairs minister Salman Khurshid told PTI.
Although the government has operationalised several provisions of the Competition Act, it is yet to notify Sections 5 and 6, which mandate companies to seek the CCI's go-ahead.
The ministry of corporate affairs has held extensive deliberations with industry and other stakeholders on the sections relating to takeovers and issues like the time period for vetting M&As.
Mr Khurshid said that all the issues raised by the industry have been addressed and now it was time to strengthen the CCI.
"I think every issue that industry has raised, we have addressed them satisfactorily. They have turned back with a reasonable look of satisfaction," he said.
After notification of the sections, all mergers which would increase the combined assets of the merging entities to more than Rs1,000 crore or raise the turnover to Rs3,000 crore, would require the CCI's approval.
Sources had earlier said that the CCI would hire about 180 personnel for various posts, including that of an adviser.
The CCI, currently employs about 50 professionals with several persons on deputation from various government departments for one year only.
In May last year, the government notified Sections 3 and 4 of the CCI Act, empowering the Commission to take up cases pertaining to anti-competitive agreements and abuse of dominance.
The Commission has become fully functional early this year with the appointment of chairman Dhanendra Kumar and other members. It draws its powers from the Competition Act, passed by Parliament in 2002.