Regulations
SEBI asks Green Ray to windup its investment scheme and refund investor’s money

SEBI has asked Green Ray International and its directors to wind up their existing collective investment schemes-CIS and refund collected money to the investors along with offered returns

 

Market regulator Securities and Exchange Board of India (SEBI) in its order dated 3 February 2014, asked Green Ray International Ltd and its directors to wind up their collective investment schemes (CIS). SEBI also directed the company to refund all the money collected from investors under the CIS along with offered returns and dues of investors within three months.
 

Green Ray International raised Rs45.50 crore as on 31 March 2011, through illegal collection by running a CIS without obtaining a certificate of registration from SEBI.
 

During investigation, SEBI found that, Green Ray International has collected money under six investment plans namely; Real Gold Plan, Ever Green Plan, Marriage Plan, Tycoon Plan, Happy Nation Plan and Green Line Plan. The company was engaged in fund mobilising activity from the public, by floating, sponsoring and launching CIS.
 

SEBI barred Green Ray International, its managing director, Mir Shahiruddin and its directors, Mir Tahiruddin, Ayub Saha and Khalik Saha from collecting money from investors and launch any collective investment schemes under sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 with regulation 65 of the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999.

 

SEBI also restrained the company and its directors from accessing the securities market and prohibited them from buying, selling or dealing in securities market till all the collective investment schemes are wound up by the company and all the money mobilised through such schemes are refunded to its investors with returns which are due to them.

 

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COMMENTS

Bhagywant Daphale

2 years ago

Money life before publishing articles n. Orders should really do some ground check. Do you know how much your this one report damaged the company, will you along with SEBI can take responsibility n pay the public their hard earned money of company comes clean out of it, because by the time company gets positive result from the appeal it would be all over. Then who would pay public???? Don't just write one side story

REPLY

MDT

In Reply to Bhagywant Daphale 2 years ago

Thanks for your comment.

At Moneylife, we warn people that money invested in any company for 'double return' in shortest time or in corporate FDs, is unsecured and not 100% safe. We tell 'investors' to look at credit ratings and only invest in AAA rated companies and not be greedy for 1% or 2% more or fall prey for quick, double money schemes by ponzi or chain money operators.

Any entity, be it a company as you like to call it, or an individual, who collects money from 'investors' with a promise to give extraordinary returns (in any form) needs to obtain proper registration and other permissions from regulators like SEBI and RBI.

Do you know, all MLMs and ponzi schemes work on geometric expansion? For instance one gets ten sponsor to sponsor another ten and so on. The fraudsters call it expanding matrix (!) that gives corresponding kick-backs at various levels. The problem with pyramid schemes is simple math and common sense. At a mere three levels deep, there would be 1,000 people, while at six levels deep there would be 10 lakh people believing that they can make a 'fortune' and 'achieve a dream' by mere selling.

Moneylife Foundation has also been repeatedly writing to the RBI to act against MLM companies, because they cannot possibly transfer profits out of India without permission from the banking regulator. Over the past five of its existence, Moneylife Foundation has conducted over 200 financial literacy seminars. Each of our core literacy modules warns investors against investing in multi-level marketing schemes which offer extraordinary returns linked to the enrollment of more members.

And if you, yourself is not careful about 'investing' your hard earned money, why should anyone be blamed? Have you ever asked, SEBI or RBI or any publishing house before putting your hard earned money in the company to get quick and double returns? Then why blame regulators and media? Remember, media, like Moneylife, is just a messenger, in the sense it has not ordered the company to shut its business, it is the job of regulators, the adjudicating authority.

Hope people like you would be more careful next time while 'investing' your hard earned money for receiving extraordinary return without checks with the regulators.

Thanks again

Regards,
MDT

Bhagywant Daphale

In Reply to MDT 2 years ago

Won't it be better if you do some sort of follow up when you publish some reports. People will be happy if you let everyone know about the current status.

Sucheta Dalal

In Reply to Bhagywant Daphale 2 years ago


I am sure it will be better for you. But this is a free publication brought out by a tiny staff. We do what we can. The rest is up to the investor -- in any case, this is a SEBI press release.

Ignatius

In Reply to Bhagywant Daphale 2 years ago

Hello Boss
You left us in trouble and now the people are harassing the agents. Atleast giv us guidance on what to do. i trusted all ur words after knowing the situation.

Bhagywant Daphale

2 years ago

If SEBI can screwed up the company, can it take responsibility n pay the public if they are so worried about public money?

REPLY

Sucheta Dalal

In Reply to Bhagywant Daphale 2 years ago

You should file a public interest litigation on this issue. I am sure it will benefit the entire investor community, even if it takes a long time to get a judgement.

Chintu Khan

2 years ago

WHAT IS HAPPENING WITH INVESTORS OF GREEN RAY INTERNATIONAL

RBI to examine FSLRC recommendations on skill building, capacity development

RBI has constituted a committee to examine FSLRC recommendations related with capacity building in financial sector. The Gopalkrishna Committee is expected to submit its recommendations by 30 April 2014

 

The Reserve Bank of India (RBI) has constituted a Committee to examine recommendation made by the Financial Sector Legislative Reforms Commission (FSLRC) on ‘Capacity Building in Banking Sector’. The Committee would be headed by G Gopalakrishna, executive director of RBI.

 

Earlier, FSLRC made recommendations on enhancing skill building and capacity development in banks and non banks regulated by RBI to ensure availability of skill sets at all levels for effective delivery on required roles and responsibilities.


The committee will deliberate on the following terms of reference:

  1. Identify capacity building requirements keeping in view the role of financial sector and what it should deliver;
  1. Examine the skills required at various levels/operations to deliver on the required role;
  1. Identify qualifications relevant to specific areas of operation in banks and non-banks;
  1. Evolve methodologies for prescribing certification for required qualifications;
  1. Examine if the members on bank boards also need to be certified - by way of say, an appropriately designed course which could be made mandatory for every individual before appointment to the board of a bank.

The RBI committee will consist of the following members:

  1. Mohan V Tanksale, chief executive, Indian Banks’ Association (IBA);
  1. Shyam Srinivasan, managing director and chief executive officer, Federal Bank Ltd;
  1. Ranjan Dhawan, executive director (in charge of HRD), Bank of Baroda;
  1. K Ram Kumar, executive director (HR), ICICI Bank Ltd;
  1. R Bhaskaran, chief executive officer, Indian Institute of Banking and Finance (IIBF);
  1. Dr Achintan Bhattacharya, director, National Institute of Bank Management (NIBM), Pune;
  1. NS Vishwanathan, principal chief general manager, Department of Non-Banking Supervision,RBI;
  1. PR Ravi Mohan, chief general manager-in-charge, Department of Non-Banking Supervision, RBI , who will be the member secretary to the committee.

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Bad loans: Are economic conditions alone responsible for rising NPAs?
Ordinary borrowers often complain about difficulty in getting loans, while some large borrowers just get it on a platter. This also highlights high operational risks associated with people and process that may be responsible for increase in bad loans or NPAs
 
Non-performing assets (NPAs) of the banks, especially public sector banks (PSBs), have been going up sharply recently.  According to one of the estimates, the gross non-performing assets (NPAs) of listed banks rose 35.2% to Rs2.43 lakh crore during the first three quarters of the current financial year. In absolute terms, the 40 listed banks added Rs63,386 crore to their gross NPAs during the nine months till December 2013, with State Bank of India (SBI), the largest lender in the country, leading with an accretion of Rs16,610 crore. The rising NPAs have set the alarm bells ringing all across. The finance ministry has asked banks to work on ways and means of recovering NPAs at the earliest. Banks are busying chalking out strategies to recover money blocked in NPAs. While managing NPAs has become a cause of concern for banks, the reasons for rising NPAs are also being debated all across.
 
The rising incidence of NPAs has been generally attributed to the economic slowdown. It is believed that with economic growth slowing down and rate of interest going up sharply, corporates have been finding it difficult to repay loans, and it has added up to rising NPAs. Even finance minister P Chidambaram stated that bad loans are a function of the economy and hence, having bad loans during distressed times is very natural. But do bad loans rise only because of economic distress? If this was the case, almost all banks would have experienced similar kinds of bad loans in their portfolios. Public sector banks have performed badly on the NPAs front compared to the private sector banks. While the loan portfolio of these two types of banks may be different, the contribution of public sector or state-run banks in total NPAs does not justify this difference in the composition of loans.
 
So what is it that is causing burgeoning of NPAs? Is it the approach of banks towards loans, which is wait and watch approach or the credit sanctioning processes of the banks itself? Are there other factors as well contributing to the rise in NPAs? The wait and watch approach of banks have been often blamed as the reason for rising NPAs as banks allow deteriorating asset class to go from bad to worse in the hope of revival and often offer restructuring option to  corporates.
 
Let us look at the wait and watch approach supplemented by restructuring offers of banks, which cause NPAs to rise. A Parliamentary panel, examining increasing incidents of NPAs, has observed that state-owned banks should stop “ever-greening” or repeated restructuring of corporate debt to check the constant bulging of their non-performing assets. Members of the panel were of the view that NPAs are the result of bad economic situation, but there were also management issue of every-greening of loans, which could be avoided by “not renewing loans, particularly of corporate”. This analysis clearly points out that banks’ approach towards NPAs has been a reason for aggravation of bad loans. Extending those extra helping hand can go against the financial health of banks.
Coming to the contribution of credit assessment process, banks need to be more conservative in granting loans to sectors that have been traditionally found to be contributors of NPAs. Infrastructure sector is one such villain causing NPAs to rise predominantly because of long gestation period of the projects. But more than all, this credit sanctioning process of banks need to go much more beyond the traditional analysis of financial statements and analyzing the history of promoters. There is a need to incorporate significance of economic factors in the credit assessment process. Also, banks need to evolve strategy through which defaulters are kept out of system unless they honour the previous payment. It is obvious that credit bureaus have failed to obtain this objective as their reports giving credit history of corporate have been inadequate in capturing repeated defaults by same borrower. The old defaulter often resurfaces by using a new name with a clean slate and banks find it difficult to track this ‘habitual’ defaulter.
Banks also need to look at operational factors causing increasing incidents of bad loans. Are the bank officers going beyond the traditional principles of lending? Are unfair practices also adding to the increasing incidents of lending?  SBI has recently taken some steps in this regard. To ensure that the dealings of its officers are more transparent, SBI has asked its officials not to meet the borrowers, existing as well as prospective, at any location other than the bank branch. Whether this will be effective or not is debatable, however the fact remains that high operational risks associated with people and process is key contributing factor in increasing incidents of loans turning bad or into NPAs. Ordinary borrowers often complain about difficulty in getting loans, while some large borrowers just get loans on a platter. It is time for banks to have a complete framework in place to tame NPAs getting added because of operational risks.
 
(Vivek Sharma has worked for 17 years in the stock market, debt market and banking. He is a post graduate in Economics and MBA in Finance. He writes on personal finance and economics and is invited as an expert on personal finance shows.)
 

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COMMENTS

RAJIV UNNITHAN

3 years ago

United Bank of India, State Bank of India & GOD knows how many more ??? The media has not playing the news of banks NPA levels falling as an important news, all the news currently are pretty much around the National politics & elections. Hoping the investors are careful, can't say when these news might hogg the limelight.

TIHARwale

3 years ago

United Bank of India CMD Archana Bhargava resigns; reports of rifts on NPA classification
By Atmadip Ray, ET Bureau | 22 Feb, 2014, 04.00AM IST


Read more at:
http://economictimes.indiatimes.com/arti...

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