Regulations
RBI sets up supervisory bodies for SBI and ICICI Bank

The central bank hopes that these college will become a key tool of consolidated supervision particularly considering the ever expanding footprint of Indian banks abroad

 
Mumbai: The Reserve Bank of India (RBI) has set up two supervisory bodies for State Bank of India (SBI) and ICICI Bank to ensure compliance of global prudential norms and reduce supervisory overlap, reports PTI.
 
"The objective of establishing supervisory college is to deal with supervisory issues revolving around these banks and establish a cooperation mechanism for cross-border supervision," RBI said in a statement.
 
Supervisory colleges have evolved the world over as an important component of effective supervisory oversight of an international banking group, it said.
 
This mechanism was developed with the aim of reducing supervisory overlap and filling in supervisory gaps for better supervisory co-operation enunciated in Basel II Framework, it said.
 
The concept, it said, was enunciated in the Basel Committee for Banking Supervision (BCBS) October 2010 Document, "Good Practice Principles on Supervisory Colleges".
 
Though India does not have any Systemically Important Banks (SIBs), with a view to benchmarking India with the best practices across the globe and in its capacity as the home country supervisor, the RBI decided to establish a supervisory college each for SBI and ICICI Bank. This is because both banks have vast expanse of overseas operations spreading across many supervisory jurisdictions.
 
For SBI there are nine host country supervisors. These are, Bangladesh Bank, Central Bank of Bahrain, National Bank of Belgium, Dubai Financial Services Authority, Financial Services Authority (London), Federal Financial Services Authority (BaFin), Bank of Mauritius, Nepal Rastra Bank and Monetary Authority of Singapore.
 
At the same time, ICICI Bank has seven host country supervisors including Central Bank of Bahrain, National Bank of Belgium, Financial Services Authority (London), Bank of Russia and Monetary Authority of Singapore.
 
RBI Deputy Deputy Governor KC Chakrabarty hoped the college, being a process and not a one-time forum, will become a key tool of consolidated supervision particularly considering the ever expanding footprint of Indian banks abroad.
 

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US Exim Bank approves $2.1 billion assistance to Reliance

The transaction is the single largest Exim Bank has ever authorised for RIL and it includes extending a $1.06 billion direct loan and similar amount to guarantee JPMorgan Chase loan to Reliance's Jamnagar facility

 
Washington: The Export-Import Bank of the United States (Exim Bank) has voted to provide $2.1 billion worth of direct loan and loan guarantee to Reliance Industries Ltd (RIL), which it said would help increase US export to India, reports PTI.
 
The transaction is the single largest Exim Bank has ever authorised for Reliance and it includes extending a $1.06 billion direct loan and similar amount to guarantee JPMorgan Chase loan to Reliance for export of American goods and services destined for use in Reliance's expansion projects at Jamnagar in the Indian state of Gujarat.
 
It also represents Reliance's first attempt at funding through the capital markets with an Exim Bank guaranteed bond issuance, an official release said.
 
The credit will support approximately 12,300 US jobs, according to bank estimates derived from Departments of Commerce and Labor data and methodology.
 
Moreover, 6% of the financing is expected to support American small businesses.
 
"This transaction is a tremendous opportunity for US exporters and US jobs, as revealed by the impressive exporter and job counts," said Exim Bank Chairman and President Fred P Hochberg.
 
"We are very pleased to support Reliance in this important expansion project," added Lillian Labbat, managing director, JP Morgan.
 
Among the more than 65 exporters and suppliers involved in the transaction are Fluor Corporation, Lummus Technology, Univation Technologies LLC, Bechtel, and ConocoPhillips.
 
Located on the Gulf of Kutch, the Jamnagar complex oversees the largest single-location refinery operation in the world.
 
Reliance intends to increase the complex's petrochemical output by constructing a petcoke gasification unit that will top the worlds rosters in size and significantly enhance the efficiency of the companys refinery business.
 
Reliance also plans to erect a refinery off- gas cracker with matching downstream units that will better integrate polymer and polyester production.
 
"We are once again partnering with major US suppliers for cutting edge technology, critical project management services and equipment from a wide section of American exporters for rolling out our next phase of growth," said Alok Agarwal, Reliances chief financial officer.
 

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Kejriwal alleges Narendra Modi bought peace with Congress and judiciary

Arvind Kejriwal alleged that in Gujarat elections, Modi and Congress 'appear' to be politically pitched against each other but documents reveal that behind the curtains, they are happy doing business with each other and with same set of people

 
Arvind Kejriwal, the IRS officer-turned social activist-turned politician on Tuesday alleged that Gujarat chief minister Narendra Modi and Congress party are doing business together while playing opponents in the state election. Kejriwal even alleged that Modi gave away 10% participation interest in state-owned Gujarat State Petroleum Corp (GSPC) to Jubilant Enpro Pvt Ltd, owned by husband of Shobhana Bhartia, who was nominated to the Rajya Sabha by Congress.
 
Here are the allegations made by Kejriwal...
 
Modi ‘gifts’ away 20% of GSPC’s stake
 
Gujarat State petroleum Corporation (GSPC) is an oil and gas exploration company of Gujarat Government. GSPC acquired gas blocks in KG Basin in August 2002. According to government’s own estimates, the gas fields allotted to GSPC were worth $20 billion.
 
Modi government entered into production sharing agreements with Geo Global and Jubilant Enpro Pvt. Ltd. Modi gave away 10% of participating interest to each of these two companies completely free of cost. In turn, Geo Global was supposed to provide technical assistance. The first question is – how were these two companies identified? According to records, it was not through any competitive bidding. These two companies were simply given away the participating interests in these gas fields free of cost.
 
What is the value of benefits given to Geo Global and Jubilant Enpro Pvt Ltd?
 
Mukesh Ambani’s Reliance is an operator of gas fields in the same area. Mukesh Ambani invited British Petroleum last year to provide technical assistance and entered into a similar production sharing agreement giving 30% stake to British Petroleum (BP). Mukesh Ambani’s fields were valued at $ 24 billion at that time. BP had to pay $7.3 billion (Rs35,000 crores) to acquire 30% stake and to provide technical assistance.
 
In sharp contrast, Gujarat government gifted away 10% stake to Geo Global and Jubilant Enpro Pvt Ltd each. Therefore, the value of this “gift” given by Modi Government would be Rs10,000 crores to each of the two companies.
 
Who is Geo Global?
 
Geo Global was incorporated just six days before their agreement with GSPC. On the day of the agreement, its total capital was $64 (Rs3,200) only. The company is owned by some Jean Paul Roy. So, from Rs3,200 worth company, it became a Rs10,000 crore worth company within six days.
 
Whereas Modi government is trying to defend its agreement with Geo Global saying that the company provided technical expertise, Geo Global in its own admission to Securities and Exchange Commission in US has said that it does not have the necessary expertise. CAG has raised serious doubts about Geo Global’s technical competence. In fact, the “technical expertise” provided by Geo Global was so flawed that, according to CAG, Gujarat government had to hire another technical consultant.
 
Therefore, the sole purpose of this transaction seems to be to gift oil fields worth Rs10,000 crores and to gift 10% profits of GSPC to Jean Paul Roy.
 
Interestingly, GSPC has spent $3 billion as cost of exploration. Since Geo Global has 10% stake, 10% of this cost i.e. $300 million (Rs1,500 crore) should have been borne by Geo Global. However, Modi government paid this money on their behalf and did not recover it from them.
 
Why did Modi do that? Who is Jean Paul Roy? What is Modi’s relationship with Jean Paul Roy?
 
Congress partners with Modi in this loot:
 
The following three points indicate how Modi and Congress are joint partners in this business:
 
1.       Who is Jubilant Enpro Pvt Ltd? Jubilant Enpro Pvt. Ltd is owned by Shyam Sunder Bhartia, who is husband of Mrs Shobhana Bhartia. Mrs Shobhana Bhartia was nominated to Rajya Sabha by Congress. She has been known to be extremely close to Congress and Gandhi family.
 
Isn’t it strange that Modi grants a Rs10,000 crore illegal benefit to someone so close to Congress? Isn’t it strange that Congress keeps mum about Modi’s scam for so many years?
 
2.       When CAG started its audit, Modi government perhaps got scared. So, they recommended to the Central Government on 18 Aug 2010 to cancel the agreement with Geo Global. Interestingly, despite tens of letters and reminders to the central Government, UPA government is not giving permission to cancel the agreement with Geo Global. Why? Is Jean Paul Roy related to Congress also? 
 
3.     Interestingly, Jean Paul hasn’t received benefits from just Modi in Gujarat. He has received similar illegal benefits from UPA government at centre also. A look at Geo Global’s website shows that Geo Global received its first contract from Modi government in February 2003. Subsequently, on the basis of that contract, Jean Paul has entered into several production sharing contracts in KG Basin, Cambay Basin, Deccan Syneclise Basin and Bikaner Nagaur basin. Many of these contracts have been entered into with OIL, which is a Central PSU. The contracts with OIL happened during UPA’s regime.
 
Therefore, Jean Paul Roy seems to be both Modi’s and Congress’ man.
 
Modi buys peace with Congress and Judiciary
 
Gujarat Government has been allotting plots of land to its MPs and MLAs in prime areas of Gandhinagar. The plots have been allotted at highly concessional rates of Rs45 per sq meter. The plots were allotted so that the MPs and MLAs could construct their houses on these plots. But most of them have sold these plots at much higher rates.
 
Why did the Congress, which is the Opposition Party, not raise its voice against this scheme? Because MPs and MLAs from Congress also have got plots and they have also benefitted from this scheme.
 
This matter was challenged in Gujarat High Court. Gujarat High Court stayed the sale of these plots. In order to keep the judges also happy, Modi gave concessional plots to all the sitting, retired and promoted judges of Gujarat High Court in April 2010. Barring a few judges, all the other judges accepted this Modi’s offer. Since then, this petition has not been heard by Gujarat High Court. The MPs and MLAs are openly selling their plots despite Gujarat High Court ban on sale.
 
Has Judiciary been effectively silenced?
 
If Congress is Mukesh Ambani’s dukaan, then is Modi government Adani’s dukaan?
 
In 2007, Gujarat needed electricity. Modi government was buying it from Adani on temporary basis at Rs5.45 per unit. Modi government decided to enter into long term power purchase agreements, which would be cheaper. It called for bids. The bids were manipulated to favor Adanis. Gujarat High Court passed a stinging order against Modi Government for brazenly manipulating the bidding process and for favoring Adanis.
 
In February 2007, Gujarat government entered into two agreements with Adanis to supply electricity at Rs2.35 and Rs2.89 per unit, respectively.
 
Interestingly, two months before this, Gujarat Mineral Development Corporation (GMDC), which is Gujarat Government PSU, had offered to the Gujarat Government to supply electricity at the rate of Rs2.25 per unit. This was much cheaper than what Adanis were offering. GMDC had its own coal blocks and it had offered these coal blocks to KSK Energy Ventures Ltd, who in turn agreed to supply electricity cheaper at Rs2.25 per unit.
 
Rather than accept GMDC’s offer to supply cheaper electricity, Modi government decided to purchase electricity at much higher rates from Adanis. Why did Modi do that?
 
A few days after signing the agreement, Adani started blackmailing Gujarat government. They refused to supply electricity till they were supplied coal by Gujarat Government. GMDC said they would be happy to supply coal if Adanis agreed to supply electricity at reduced rates of Rs2.25 per unit, the rates at which KSK was supplying electricity, who was receiving coal from GMDC.
 
Rather than reprimanding Adanis and cancelling their contract for this blackmail, Modi personally intervened. Mr Jose, the Chairman of GMDC was transferred out. GMDC was asked to supply 50% of its coal from Naini block to Adani. Extracts from file noting made by Mr Modi:
 
“M/s Adani had been given a commitment by GMDC for coal to be provided by them from the Morga –II mines project for a 1000 MW plant on the basis of which M/s Adani in turn submitted his bid in the competitive tariff bid at GUVNL at Rs2.35 at Gujarat bus bar. In other words, a commitment of GMDC exists towards M/s Adani. Therefore, it is suggested that the 50% of Naini block of 1750 MW can be considered to be given to M/s Adani with GMDC as the mine developer.”
 
The above file noting made by Mr Modi is completely false. GMDC did not make any commitment, whatsoever, to Adani.
 
Despite this, Adanis unilaterally cancelled their contract for supplying power in 2009. Gujarat government in turn started buying same electricity from Adani under short term contracts at Rs5.5 per unit.
 
So, in effect, Adanis walked away with coal blocks without supplying the electricity at cheaper rates.
 
Therefore, Modi’s love for Adanis cost Gujarat people very dearly. All these years, the people of Gujarat were forced to pay much more for electricity.
 
Finally, Gujarat government had to enter into power purchase agreements with other parties at much higher rates.
 
Adanis granted land at throwaway prices:
Modi has allotted 14306 acres (roughly 5.67 crore sq meters) of land to Adanis in Kutch area itself. This land has been transferred to them at rates ranging from Re1 per sq meter to Rs32 per sq meter for SEZ. In fact, most of the land has been allotted at less than Rs10 per sq meter. Most of the land is allotted in Mundhra village, where the market rate is Rs200 to Rs315 per sq meter for industrial use and Rs1,000 to Rs1,575 per sq meter for commercial use. If we take Rs10 per sq meter as the average price at which land has been given to Adanis and if we take Rs300 per sq meter as the average market price, it means that Modi has given an illegal benefit to Adanis to the tune of Rs1,600 crores.
 
Similarly, Modi has allotted land to Adanis in many other parts of Gujarat at throwaway prices.
 
However, when Indian Air Force asked for land from Modi, IAF was charged eight times the market rate. IAF was offered 100 acre land at Rs8,800 per sq meter. It is only after PM’s personal intervention that rates to IAF were reduced.
 

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COMMENTS

R Balakrishnan

4 years ago

everywhere, the photo of Gandhi on the legal tender acts as a bond that is thicker than blood. Alas, this expose is of no use, since we still do not have an alternative. Yes, perhaps it brings to the front that even Modi cannot be above suspicion, given that there are different businessmen competing for attention and favours.

REPLY

Kalpesh P Shah

In Reply to R Balakrishnan 4 years ago

Sir,

Lets assume that this is a scam.

What is the point of making it public without taking it to the courts, now that Arvind has a political party?

There will be allegations and counter-allegations. But, it is nothing more than a drama where channels will debate it for a few days and it will die down.

What recourse there is other than justice for things such as this - if it is a scam?

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