Several depositors and HNIs were duped in the Rs460.91 crore fraud, which was engineered by a Citibank's global wealth manager Shivraj Puri who was working at Gurgaon branch of the bank
New Delhi: The government today said that Reserve Bank of India (RBI) has conducted a special inquiry into Rs460 crore Citibank fraud case and was in the process of completing its final report, reports PTI.
"The RBI has conducted a special scrutiny of the related accounts at Citibank, Gurgaon (branch) and other connected accounts at other banks. The final report is being completed," minister of state for finance Namo Narain Meena told the Lok Sabha in a written reply.
Several depositors and high networth individuals (HNIs) were duped in the Rs460.91 crore fraud, which was engineered by a Citibank's global wealth manager Shivraj Puri who was working at Gurgaon branch of the bank.
The US-based Citibank is headed by Indian-born Vikram Pandit, who is currently on a visit to India. The government had in 2008 honoured Mr Pandit with the Padma Bhushan.
Pointing out that the fraud in the Citibank's Gurgaon branch was going on since September 2009, the minister said, "The major transactions took place between May 2010 and November 2010. The bank has furnished details of the fraud to the RBI in the Fraud Monitoring Report."
Citibank's manager Mr Puri, Mr Meena said, "Perpetrated the fraud by mobilising funds to the tune of Rs460.91 crore unauthorisedly from HNI customers and certain corporate for the purpose of investing in stock market, assuring them high returns."
While providing details of the modus operandi, the minister said, Mr Puri fabricated a circular of the Securities and Exchange Board of India (SEBI) to lure people into investing into accounts held by his accomplices Premnath, Shiela Premnath and Deeksha Puri.
The investors, Mr Meena added, were even issued fake receipts/acknowledgements on Citibank's stationary.
The funds thus collected through the "Premnath Account" were transferred to various brokerage houses for making investment in the securities market.
"There were 27 other accounts which had been opened in the (Citibank's Gurgaon branch) in the names of Mr Puri's relatives..," the minister added.
Besides, he said, the fraudulent transactions also took place in the accounts of broker firms like BG Financial Services, G 2S Management consultants and Normans Martin Broker.
The fraud came to light after the bank look into a query from a customer at Citibank's Nehru Place branch about its scheme offering high returns.
After discovering the fraud, the Citibank on 5th December 2010, filed a complaint with the Gurgaon police which is investigating the case.
Concerns over the wider disruption of supplies from OPEC countries could fuel further oil price increases, but at the same time improve realisations of oil companies in India which are reeling under under-recoveries
Soaring prices of crude oil in the international markets due to the political unrest in the Middle East and North Africa (MENA), will improve the realisations of private oil exploration and production companies in India, according to a research report by CRISIL.
"The margins of refining companies will also improve and the political unrest in the MENA region which has already been rocketing prices of crude oil, would fuel further price increase," the rating agency says. The report states that average crude oil (Dated Brent) prices are expected to increase more than 15% to over $102 per barrel in the fourth quarter of 2010-11 as against the previous quarter.
"In a year when we expect world dependence on OPEC oil supply to increase, concerns over a wider disruption of supplies from OPEC countries will fuel further oil price increases," said Sridhar Chandrasekhar, head, CRISIL Research. (OPEC, or the Organization of Petroleum Exporting Countries, is an intergovernmental body of 12 oil-producing countries which together account for more than two-third of the world's reserves. Most of these countries are located in the MENA region.)
Following the Union Budget presented in Parliament earlier this week, state-run oil companies from India are proposing to raise petrol prices by up to Rs4 a litre to offset rising crude oil costs, arguing that the Budget had ignored their demand for a cut on duties on fuel. The government freed pricing of petrol in June last year.
India imports 80% of its energy requirement and the average price at which India imports crude oil is about $110 a barrel. Oil companies say they are losing Rs10.70 a litre on diesel, Rs21.60 a litre on kerosene and Rs356.07 on a cooking gas cylinder.
Kisan Ratilal Choksey Shares and Securities said, "We believe it is a loss for the oil companies as no duties were cut on the fuel. Simultaneously, the subsidy amount has been reduced to Rs23,640 crore from Rs38,386 crore, a decline of 13%. With no relief from the Budget, the oil companies have no choice but to raise the petrol price which was deregulated last year. We believe this would help the companies to compensate their revenue loss."
Private and government-owned refining companies too will benefit. CRISIL, an affiliate of the international ratings and financial services company Standard & Poor's, expects gross refining margins to rise from $6.8 per barrel in the third quarter of 2010-11 to $8-9 per barrel in the fourth quarter.
On 2nd March, crude oil prices touched $116 per barrel, the highest level since the middle of 2008, and prices are expected to move northward on fears that the violence could spread to neighbouring countries such as Saudi Arabia and Iran.
Before the dust had settled in Egypt, the Libyan crisis erupted, leading many oil companies to suspend their operations there. Libya accounts for close to 2% of the global oil output. Last week, Nomura International (HK) said, "If Libya and Algeria were to halt oil production together, prices could peak above $220 per barrel and OPEC's spare capacity will be reduced to 2.1 million barrels per day, similar to levels seen during the Kuwait-Iraq conflict and when prices hit $147 per barrel in 2008."
Crude oil prices, which were already inching up over the past two year on the back of improving fundamentals, started soaring, as political turmoil erupted in Tunisia in December. As the uncertainty over oil supplies disturbed market sentiment, the unrest in Egypt pushed oil prices to over $100 per barrel.
However, CRISIL feels that "government-owned oil exploration and marketing companies will not benefit as much, as they will have to shoulder an increase in subsidy burden on account of rising oil prices."
The subsidy burden for oil marketing companies would nearly double on the quarter to Rs300 billion in January-March from Rs155 billion in the December quarter. The government compensates losses of oil marketing companies from the sale of petroleum fuels at lower than the cost price. The total under-recoveries for this fiscal ending March are expected to cross Rs750 billion.
Punjab National Bank proposes to buy stake in an existing life insurance company and has shortlisted 10 companies, including Reliance Life and Bharti AXA, for the strategic partnership
State-owned Punjab National Bank (PNB) said it proposes to buy stake in an existing life insurance company and has shortlisted 10 companies, including Reliance Life and Bharti AXA, for the strategic partnership.
The Bank had invited expression of interest from intending insurance companies for strategic partnership in insurance business with the bank in December last year.
PNB said it has decided to participate in the life insurance venture through "a corporate agency tie-up along with equity participation in an existing Indian life insurance company."
In a statement, the public sector lender said, "RFPs (request for proposals) have been issued to ten insurance companies...."
The companies which had expressed interest in the proposal include Reliance Life and Bharti AXA, Birla Sun Life, HDFC Life, Max New York Life and Met Life, the bank said. These companies had filed various models of business with the lender.
"The bank will finalise the partner for life insurance business based on the evaluation of the proposals submitted by these insurance companies," PNB said.
Last year, the bank decided to part ways with two of its partners in a planned life insurance joint venture. PNB bought the entire 26% stake held by Principal Financial Group and the 32% participating interest of domestic firm UK (Berger) Paints in Principal PNB Life Insurance Company Ltd.
PNB's stake in the proposed joint venture was 30%, while that of Vijaya Bank was 12%.
On Friday, PNB ended 0.71% down at Rs1,080.55 on the Bombay Stock Exchange, while the benchmark Sensex declined 0.02% to 18,486.45.