Regulations
RBI asks urban co-op banks to modify forms for fixed deposits

Banks will have to incorporate a clause in the FD form to give option of premature withdrawal by survivor in case of death of the other joint account holder

 
Mumbai: The Reserve Bank of India has asked the urban co-operative banks to modify fixed deposit (FD) account opening form to allow pre-mature withdrawal in the event of death of one of the joint account holders without any penalty, reports PTI.
 
Under the modified norms, it would be easier for the surviving joint account holders of FD with 'either or survivor' or 'former or survivor' mandate to go in for pre-mature withdrawal of fixed deposit in the event of death of the other.
 
As per the notification of the Reserve Bank of India (RBI), banks will have to incorporate a clause in the FD form to give option of premature withdrawal by survivor in case of death of the other joint account holder.
 
RBI had earlier asked UCBs to incorporate such a clause in the account opening form, however, it said, "UCBs which have neither incorporated such a clause in the account opening form nor taken adequate measures to make the customers aware of the facility of such mandate, cause unnecessary inconvenience to the 'surviving' deposit account holders(s).
 
"UCBs are, therefore, advised to invariably incorporate the aforesaid clause in the account opening form and also inform their existing as well as future term deposit holders about the availability of such an option." 
 
The joint deposit holders may be permitted to give the mandate either at the time of placing fixed deposit or anytime subsequently during the term/tenure of the deposit.
 
"If such a mandate is obtained, banks can allow pre-mature withdrawal of term/fixed deposits by the surviving depositor without seeking the concurrence of the legal heirs of the deceased joint deposit holder," RBI said.
 
It further clarified that "such premature withdrawal would not attract any penal charge".
 

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Union Bank cuts vehicle loan rates to 10.95%

Union Bank cut interest rates by 1.5% to 2.5% to 10.95% for vehicle loans of up to seven year tenure

Mumbai: Union Bank of India said it has slashed interest rates on vehicle loans in the range of 1.55-2.55% and brought them to a flat 10.95% on zero to seven-year tenor with immediate effect, reports PTI.

 

The public sector lender's move follows a similar decision by other state-run banks such as the State Bank of India (SBI) and Indian Overseas Bank (IOB), among others.

 

Earlier, the rates offered by the Union Bank were 12.5% for 0-3 years and 13.5% for 3-5 years, a release from the state-owned bank said.

 

The bank has also extended its 'The Independence to Republic Day Festive Offer' on vehicle loans by waiving processing fees during this period.

 

"The reduction in interest rates and the festival offer will boost the bank's retail portfolio," Chairman and Managing Director of Union Bank D Sarkar said.

 

Earlier, Union Bank had reduced home loan rates to 10.5% besides waiving 0.5% processing fee on loan amount.

 

SBI recently reduced home loan rates to 10.25% from 10.5% for loans up to Rs30 lakh and 10.4% for loans between Rs30 lakh and Rs75 lakh.

 

Similarly, the country's largest lender has reduced car loan rates to 10.75% from 11.25% earlier.

 

While IOB has reduced home loan rate to 10.5% along with 0.5% reduction in auto loan rates, the Central Bank of India has announced cut in interest on home loans by 25-50 basis point for the amount in Rs30-35 lakh range with effective from 1st September.

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SEBI drops charges against two persons in Bank of Rajasthan probe

The matter relates to SEBI's investigation into the affairs of BoR for a period between June 2007 and December 2009. SEBI said allegations of breach of relevant regulations by these two do not stand established and therefore, they are absolved of the charges

 
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) dropped its charges against two persons in relation to a probe into the affairs of Bank of Rajasthan (BoR) for alleged irregularities on part of the company's former promoters, reports PTI.
 
In two separate orders, SEBI said allegations of breach of relevant regulations by Utpalkumar Anilkumar Mukhopadhya and Tharmapuram Subhramaniam Narayanasami do not stand established and therefore, they are being absolved of the charges.
 
Both of them had served as directors of Krishna Knitwear Technology Ltd (KKTL), a company alleged to be a person acting in concert (PAC) entity of BoR's former promoters.
 
It was alleged that the two had violated various sections of the SEBI Act and the regulations for prohibition of fraudulent and unfair trade practices. For these violations, SEBI can impose monetary penalties.
 
However, SEBI absolved them of any charges after finding out that they were not KKTL directors during the period for which the probe was conducted by SEBI.
 
The matter relates to SEBI's investigation into the affairs of BoR for a period between June 2007 and December 2009. Since then, BoR has been acquired by ICICI Bank.
 
The probe revealed that BoR's then promoters, led by Pravin Kumar Tayal, along with some companies that were connected to him and his relatives, by way of their continuous disclosure publicly announced that their stake had come down from 44.2% as on quarter ending June 2007 to 28.6% as on quarter ending December 2009.
 
However, it was alleged, though as per disclosure their holding seemed to have reduced, but in reality the holding of the promoters actually increased with the active collusion of front entities.
 
Thus, the shareholding of the promoters of BoR with PACs had increased from 46.8% in June 2007 to 63.15% in December 2009. Krishna Knitwear Technology was alleged to be one such PACs.
 
It was alleged that while the promoters conveyed the impression that they were reducing their shareholding, they did not dilute their controlling stake in BoR.
 
On the contrary, it was alleged that they had actually increased their holding in a deceptive manner with the active collusion with their front entities.
 
SEBI appointed an Adjudicating Officer on 25 January 2012 to look into the alleged violations by Mukhopadhya and Narayanasami and the two were issued show cause notices and granted personal hearings later.
 
Narayanasami, however, told SEBI that he was not a director of any of the companies mentioned in the notice during the investigation period and he was appointed as an Additional Director of Krishna KnitWear Technology Ltd for the first time on 15 October 2010, which is beyond probe period.
 
Narayanasami ceased to be a Director of KKTL with effect from 2 February 2012.
 
Taking into account the reply and the documents, SEBI observed that the allegation in the case mainly was about promoters of BoR and their PACs by their act of concealment of correct disclosure, defrauding the investors of BoR and the market at large.
 
SEBI's adjudicating officer further said submissions made by Narayanasami and the data available with the Ministry of Corporate Affairs show that he was appointed as a Director of KKTL on 15 October 2010 and he was not a director during the relevant period.
 
"After taking into consideration all the facts and circumstances of the case and material available on record, I do not find it a fit case to impose any monetary penalty. The case is accordingly disposed of," the SEBI officer ruled.
 
In his submission before SEBI, Mukhopadhya also said he was not a director of any of the companies named in the notice during the investigation period.
 
He appointed as an Additional Director of KKTL for the first time on 5 May 2010, which is after the investigation period and ceased to be a Director of KKTL with effect from 24 February 2012.
 
"Without going into the merits of the alleged manipulation in the matter, if any, evidence shows that the Noticee (Mukhopadhya) was not a director of the company during the relevant period," SEBI order said, while absolving him of the alleged charges.
 

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