Banking
RBI's latest moves precursors to Ind-AS implementation: Jefferies
Mumbai, The RBI's latest notifications to force banks to report deviations from prescribed asset quality norms and under-provisioning for bad loans, and take in higher standard asset provisioning across risky sectors, particularly in telecom, point to the implemention of Indian Accounting Standard (Ind-AS) next year, a US consultant said on Wednesday.
 
"Starting March 2017, banks will need to report differences, if they exist, if (a) additional provisioning assessment exceeds 15 per cent of reported net income, or (b) additional incremental NPL (non-performing loans) identified exceeds 15 per cent of reported NPL increase for the reference period," American investment banker Jefferies said in a research note. 
 
"It's a good start, but unfortunately, banks will currently only report the AQR (asset quality review) differences of FY16, which is not convincing enough that banks will come clean," it said. 
 
The non-performing assets (NPAs), or bad loans, of state-run banks at the end of last September rose to Rs 6.3 lakh crore (almost $100 billion), as compared to Rs 5.5 lakh crore at the end of June 2016. 
 
"Banks are to take in higher standard asset provisions, and build higher provisions on telecom sector owing to current distressed financials," Jefferies said regarding a related RBI notification.
 
"In our opinion, this rule is perhaps an early experiment starting with the telecom sector, as banks move towards Ind-AS implementation wherein they need to work with 'Excepted Loss' behavior instead of 'Realized Loss," it said. 
 
Ind-AS are the accounting standards applicable for companies in India.
 
The RBI on Tuesday cautioned banks about loans given to companies in sectors in difficulty such as telecom that may witness rising bad loans.
 
Banks were asked to put in place a board-approved policy for making provisions for standard assets at rates higher than the regulatory minimum, based on evaluation of risk and stress in various sectors.
 
"The telecom sector is reporting stressed financial conditions, and presently interest coverage ratio for the sector is less than one," an RBI notification said.
 
"Board of directors of the banks may review the telecom sector latest by June 30, 2017, and consider making provisions for standard assets in this sector at higher rates so that necessary resilience is built in the balance sheets should the stress reflect on the quality of exposure to the sector at a future date," it said.
 
"Besides, banks should also subject the exposure to the sector to closer monitoring," it added.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Deposits under PMGKDS can be made till April-end
New Delhi, The central government and the RBI on Wednesday allowed time till April 30 for "commensurate deposits" by citizens who have declared their unaccounted income under the Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS) that offered non-interest bearing deposits for four years.
 
The scheme had black money holders opportunity to declare their unaccounted income under till March 31.
 
"The effective date of opening of the Bonds Ledger Account shall be the date of receipt of deposits by the Reserve Bank of India from the authorised banks; wherein the due tax, surcharge and penalty has been received till March, 31, 2017," a Finance Ministry statement said.
 
The RBI said in a release: "It has now been decided by the Government of India, in case of persons who had filed the declaration by depositing tax, surcharge and penalty under PMGKDS on or before March 31, to allow extension of time till April 30 for banks to upload details into RBI's E-Kuber system and for depositors to make commensurate deposits, if not already done."
 
"The date of deposit and uploading would not be extended beyond April, 30 2017."
 
The deposits could be made in the form of cash or in an account with bank or post office or specified entity, with a tax, surcharge and penalty totaling up to 49.90 per cent.
 
Mandatory deposit of 25 per cent of the undisclosed income will be made in Pradhan Mantri Garib Kalyan Yojana (PMGKY). The deposits are interest free and have a lock-in period of four years.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Crime Lab Scandal Forces Prosecutors to Disavow Thousands of Drug Convictions

During her career as a Massachusetts lab chemist, Annie Dookhan has admitted to making up drug test results and tampering with samples, in the process helping send scores of people to prison. Her work may have touched some 24,000 cases.

 

On April 18, nearly five years after Dookhan's confession, prosecutors submitted lists of about 21,587 tainted cases with flawed convictions that they have agreed to overturn. The state's highest court must still formally dismiss the convictions.

 

Once that happens, many of the cleared defendants will be freed from the collateral consequences that can result from drug convictions, including loss of access to government benefits, public housing, driver's licenses and federal financial aid for college. Convicted green card holders can also become eligible for deportation, and employers might deny someone a job due to a drug conviction on their record.

 

"The bad news is, it took a lot of time and litigation to get to this point. But the good news is, the courts are working really hard to make sure this relief is meaningful," said Matthew Segal, the legal director of the ACLU of Massachusetts, who helped represent some of the Dookhan defendants.

 

The state's public defender agency has opened a telephone hotline (888-999-2881) to field questions that defendants may have about their convictions and whether they were dismissed. Prosecutors have until mid-May to send notice to those whose convictions were not overturned — in about 320 cases — so that those defendants can decide whether to request a new trial. Those cases involve what prosecutors considered to be the most serious offenders, and prosecutors believe that they have enough clean evidence to defend the original convictions.

 

The earliest Dookhan cases go back to 2003, which means that some individuals have been living with a flawed drug conviction for nearly a decade and a half. Lawyers for defendants, prosecutors and the state's top court are also grappling with the question of how to find and contact defendants who may have been deported from the U.S. due to their now-overturned convictions, Segal said.

 

As a result, the effects of having an illegitimate drug conviction wiped away may not be immediately felt by many defendants.

 

"The longer that these tainted convictions remained on the books, the more power they've had and the more sway they've had over people's lives," said Luke Ryan, a criminal defense lawyer who has been following the Dookhan fallout and is also representing clients harmed by another Massachusetts drug lab scandal. "They've made choices around where they live, whether they can apply for public housing. They've foregone educational opportunities because they didn't think they would be able to take advantage of them, they haven't pursued job opportunities that maybe they could have gotten."

 

The prosecutors' move to dismiss thousands of cases follows a January decision from Massachusetts' highest court, which required them to decide which Dookhan convictions they would maintain and which ones they would dismiss. For years, prosecutors opposed any wholesale review of Dookhan-involved cases and at one point argued that they had no duty to send notice to convicted defendants of the possibly tainted evidence.

 

In September, prosecutors finally mailed out thousands of notices, but the letters lacked key information and were accompanied by an inadequate Spanish translation, according to the court. As of November, fewer than 2,000 Dookhan defendants had sought or gained relief from their convictions.

 

The most affected cases — nearly 8,000 — came from Suffolk County, which includes Boston. All of the convictions were based on "reliable, admissible evidence" in addition to Dookhan's tainted test results, and many of the defendants have criminal records that extend beyond the Dookhan cases, according to a statement from the Suffolk County District Attorney's Office.

 

The county's mass dismissal "represents a good faith effort to meet the high court's goal of winnowing the number of Dookhan defendants down to a manageable number," the statement said.

 

The hundreds of defendants whose Dookhan convictions were not overturned could still decide to challenge them by requesting a new trial. If they cannot afford their own lawyer, the state public defender agency is required to provide them one for free.

 

"It will be a challenge. But it's certainly a whole lot more manageable than the prospect of 20,000," said Nancy Caplan, the attorney leading the agency's Dookhan response. "It's within the realm of possibility."

 

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletter.

 

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