RBI asks banks to refund unclaimed deposits of Rs1,700 crore

A whopping Rs1,723.24 crore in 1.03 crore non-operational accounts in different banks were lying unclaimed as of December 2010.  

In a development which may bring cheer to some, RBI (Reserve Bank of India) asked banks to locate and refund unclaimed deposits estimated at over Rs1,700 crore.

“Keeping in view public interest, it has been decided that banks should...play a more pro-active role in finding the whereabouts of the account holders of unclaimed deposits/ inoperative accounts. Banks are, therefore, advised that they should display the list of unclaimed deposits/inoperative accounts which are inactive/ inoperative for ten years or more on their respective websites,” the Reserve Bank said in an instruction to banks.

A whopping Rs1,723.24 crore in 1.03 crore non-operational accounts in different banks were lying unclaimed as of December 2010.

“Banks should also give on the same website, the information on the process of claiming the unclaimed deposit/activating the inoperative account and the necessary forms and documents for claiming the same,” RBI added.

Banks have been asked to complete the exercise by 30 June 2012 and keep their websites updated at regular intervals

Expressing concern over the “increase in the amount of the unclaimed deposits with banks year after year and the inherent risk associated with such deposits”, RBI said the lists to be displayed on websites should contain only the names of the account holder and his or her address.

“The account number, its type and the name of the branch are not to be disclosed on the concerned bank’s website,” it added.

It also directed banks to give “information on the process of claiming the unclaimed deposit/ activating the inoperative account and the necessary forms and documents for claiming the same”.

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Sebi introduces 15% quota for small investors in buybacks

Norms for share buyback through the tender offer route have been modified by Sebi.

Market regulator the Securities and Exchange Board of India (Sebi) modified norms for share buyback through the tender offer route. Companies will have to reserve 15% of the offer for small shareholders.

"15% of the number of securities, which the company proposes to buy back (through tender offer)... Shall be reserved for small shareholders," the Securities and Exchange Board of India (Buyback of Securities) (Amendment) Regulations 2012 said.  
Small shareholder refers to a shareholder who holds shares not exceeding Rs two lakh of a listed company. The buyback process through the tender offer route can be completed within 41 days of the board approval.

As per the guidelines, a company would have to publish the advertisement in newspapers within 2 days after securing board approval for the buyback and after 5 days it has to file the offer document with the Sebi.

"The offer for buyback shall remain open for 10 working days," Sebi said, adding that within 7 days the company would have to pay the buyback amount to the shareholders.

At present there are two ways by which a company can come out with a buyback -- open market and tender offer. While in open market offer companies can buyback shares from shareholders without knowing the buyer, under tender offer the company has to write to every shareholder saying it is willing to buyback shares in proportion to the issue.

SMC Global head of research Jagannadham Thunuguntla said private companies are unlikey to take the tender offer route to buyback as the process is tedious and time consuming. "The guideline is more theoretical. Companies are likely to execute buyback through the open market route," he said. The last company which came out with buyback by way of tender offer was Piramal Healthcare.

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COMMENTS

Abhishek

5 years ago

This will prove very good for small investors. Though most of the companies not prefer to buy back through tender offer route, this is the best route where the promoters can also participate and avoid triggering SEBI Takeover Regulations. I have my own doubts relating to open market purchase as it suddenly increase the demand of shares in market and insiders can make money. There should be more stricter insider disclosures and supervision in case of buyback through open market.

Bajaj Corp Q3 net profit rises 49%

Bajaj Corp’s standalone total income during the third quarter of this fiscal increased by 30.57% to Rs112.50 crore.

Bajaj Corp reported 48.87% jump in its standalone net profit for the quarter ended 31 December 2011, at Rs28.88 crore.

The company had posted a net profit of Rs19.40 crore in the corresponding period last financial year, Bajaj Corp said in a filing to the BSE.

The standalone total income during the third quarter of this fiscal also increased by 30.57% to Rs112.50 crore from Rs86.16 crore in the year-ago period, it added.

The company also said its board of directors have recommended an interim dividend for 2011-12 at 400%, which is Rs4 per equity share on a face value of Re1 each.

In the early afternoon, Bajaj Corp was trading at around Rs114.75 per share on the Bombay Stock Exchange, 5.28% up from the previous close.

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