Money & Banking
RBI says no ban on gold selling by banks

The Reserve Bank of India while ruling out a ban on the sale of gold by banks has asked lenders to refrain from aggressively selling the precious metal and related products

D Subbarao, the governor of Reserve Bank of India (RBI) on Wednesday ruled out a ban on gold selling by banks.


"We do not want banks to aggressively market gold. We do not want that to become a business. Gold loans are a very small part of the banking business," he told reporters on the sidelines of a financial inclusion conference in Pune.


In a bid to curb demand for gold, on Tuesday the central bank imposed restrictions on banks and non-banking finance companies (NBFCs) for providing loans against gold coins as well as units of gold exchange traded funds (ETFs) and mutual funds.


Subbarao said there were many "unscrupulous schemes" which did not come under regulatory purview which lure people with exorbitant rates of interest.


He also noted that the attractiveness of gold is a "consequence of high inflation". Saying the route of buying gold for genuinely saving should be available to the people, Subbarao emphasised that investment in the financial sector is good for the economy.


RTI Judgement Series: Social welfare department kept pension, other disbursement papers carelessly

The SWD at GNCTD found to have kept papers related with disbursement of money to people who apply for pensions and various entitlements carelessly. This is the 102nd in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while allowing an appeal, directed the Public Information Officer (PIO) of the Social Welfare Department (SWD) at Government of National Capital Territory of Delhi (GNCTD) to ensure that information about people who apply for pensions and various entitlements is displayed on SWD's website.


While giving this judgement on 18 September 2011, Shailesh Gandhi, the then Central Information Commissioner said, “The Commission is distressed with the fact that the papers relating to disbursements of money appear to be kept very haphazardly. Carelessness of this nature is a sure breeding ground for arbitrariness and corruption.”


Delhi resident Ranjana, on 19 May 2009 sought information regarding people who apply for pensions and various entitlements, from the PIO of SWD at GNCTD. Here is the information she sought under the Right to Information (RTI) Act...


i) Daily report regarding two applications filed by the applicant with the department.

ii) Names and posts of the officers who considered the said applications

iii) Dates on which the said applications were considered.

iv) Copies of the reports submitted by the said officers. 

v) Reason for delay in the receipt of the financial aid, if any provided by the department.

vi) Copy of the letter sent to the Applicant by the department regarding any discrepancy, if any in the applications sent by him. 

vii) Copy of any letter sent to the Applicant by the department.

viii) Information regarding the applications submitted by TB patients with the department from 2006 to 15 May 2009 in the following format

     (a)  Serial No.                   (b)    Name of the patient.          (c)   Address of the patient

     (d)  Age of the patient.     (e)    Date of submission of the application

     (f)   Date of inspection.    (g)    Date of issuance of cheque


In his reply, the PIO stated, "The applicant had filed an application with the department for financial aid on 10 July 2006.  However, the department has rejected the requested of financial aid. The required information could not be provided due to lack of staff at the department. The applicant can contact the department for seeking the required information."


Not satisfied with the reply, Ranjana filed her first appeal. However, the First Appellate Authority (FAA) did not pass any orders. She then approached the CIC with her second appeal.


During the hearing, the PIO stated that the records for which the information has been sought are not available since they have been weeded out. The PIO stated that as per a note made by then Welfare Officer KN Mishra "the papers relating to old age, widow and handicapped pensions are kept properly. The papers relating to other schemes are kept elsewhere. Once the audit is over for 2007-08 the papers are kept elsewhere."


Mr Gandhi, the then CIC, said this was an amazing statement. While expressing distress over the fact that the papers relating to disbursements of money were kept very haphazardly, he recommended the secretary of SWD to ensure that information about people who apply for pensions and various entitlements is displayed on the website in fulfilment of its obligation under Section-4 of the RTI Act.


While allowing the appeal, the CIC, said, "The SW Department should put up names and addresses of the people who apply for pensions/ entitlements giving the date of application and mention how it was disposed and on which date. The Commission expects that this should be done from June 2010 onwards. The Commission expects a compliance report of this by 30 July 2010."



Decision No. CIC/SS/A/2009/000173/SG/8053

Appeal No. CIC/SS/A/2009/000173/SG



Appellant                                            : Ranjana,                                                                                                                                                         Delhi-110095


Respondent                                      : Manju Varhney

                                                            Public Information Officer & District Social                                                                                 Welfare Officer (North West)                                                                                                            Social Welfare Department                                                                                                                          Gov. of NCT of Delhi
                                                          GLNS Complex,                                                                    
                                                        Delhi Gate, New Delhi-110006


Money laundering: US indicts seven people in $6 billion Liberty Reserve fraud

The money laundering network, which had spread its wings to 17 countries, including US, UK, China, Russian, Canada, Australia among others was run by a Costa Rican company Liberty Reserve

The US Federal authorities has indicted seven people in a $6 billion money-laundering scheme spread in 17 countries and run by Costa Rica based Liberty Reserve.


Announcing the details of the massive online fraud, the Acting Assistant US Attorney, Mythili Raman said Liberty Reserve processed at least $6 billion for more than a million clients, including two lakh in the US.


“Liberty Reserve operated, on an enormous scale, a digital currency system designed to provide cyber and other criminals with a way to launder their profits without leaving a trace. Liberty Reserve was a massive criminal enterprise servicing more than one million users globally — including 2 lakh in the United States alone,” she told reporters.


“The Company’s very purpose was to launder its users’ criminal proceeds through the US and global financial system,” Raman said.


So committed, in fact, was the principal founder of Liberty Reserve to avoid the reach of US law, that, according to the indictment, in 2011 he formally renounced his US citizenship and became a Costa Rican citizen, telling immigration authorities that he was concerned the software his company was developing “might open him up to liability in the US,” Raman said.


The US authorities also seized five domains, namely, the domain name of Liberty Reserve and the domain names of four exchanger websites that were controlled by one or more of the defendants; 45 bank accounts were restrained or seized; and a civil action was filed against 35 exchanger websites seeking the forfeiture of the exchangers’ domain names because the websites were used to facilitate the Liberty Reserve money laundering conspiracy and constitute property involved in money laundering.


The US Attorney Preet Bharara said the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes — the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers, and traffickers.


The investigation and takedown involved law enforcement action in 17 countries, including Costa Rica, the Netherlands, Spain, Morocco, Sweden, Switzerland, Cyprus, Australia, China, Norway, Latvia, Luxembourg, the United Kingdom, Russia, Canada and the US, the Department of Justice said.


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