Regulations
SEBI attaches Saradha's property to recover over Rs.774.3 crore
The Securities and Exchange Board of India (SEBI) has attached 134 properties of Kolkata-based Saradha Realty India Ltd. and its managing director Sudipta Sen to recover Rs.774.3 crore along with returns due to investors.
 
The market regulator, on its website, said notice to recover the amount was sent to the company and Sen but it went unanswered and the dues were not paid.
 
The properties which SEBI has attached mostly include land, buildings, flats and resorts under the immovable assets category while the notice also mentions seizure of movable properties as well to recover the dues.
 
"It is also felt they (the defaulters) may dispose or transfer or alienate the assets with a view to obstruct or delay the recovery proceedings, which needs to be prevented immediately by attaching the said assets," the SEBI said in a notice on its website.
 
In June this year, the regulator had attached various bank and demat accounts of the two defaulters for recovery of the dues and investors' money besides others, but these have proved insufficient.
 
"The funds available in the bank accounts and the securities available in the demat accounts of the defaulters are not sufficient for recovery of the dues," the notice said.
 
In April 2013, SEBI first passed an order against the company and Sen barring them from the market and asking them to refund the money to the investors. It also ordered the firm to shut down all its monetary schemes.
 
Most of the property to be attached is spread across widely in West Bengal with a flat in New Delhi.
 
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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Maharashtra received 7,243 new cases when there was no Lokayukta
As per a reply received under the RTI, between 2 July 2014 and 21 August 2015, when there was no Lokayukta, the office of Maharashtra Lokayukta and Upa-Lokayuktas received 7,243 new cases
 
For over 400 days when there was no Lokayukta appointed in Maharashtra the office of the Lokayukta had received 7,243 new cases, reveals information received under the Right to Information (RTI) Act. 
 
RTI activist Anil Galgali had filed the application seeking information about number of cases in the Lokayukta office. According to the information he received, during 2 July 2014 and 21 August 2015, when there was no Lokayukta appointed, the Office received 7,243 new cases. Maximum number of cases (1,386) was registered against the Revenues and Forest Department, while there is not a single case against the Parliamentary Affairs Department. 
 
According to the information, there are cases registered against two ministers as well. 
 
Condemning the delay in appointing the Lokayukta by the state government, Galgali said, "The lethargy of the Government in appointment of such sensitive and important position sends wrong message about the seriousness of the government in tackling corruption. In addition, ministers, bureaucrats and staff begin to feel that the position of Lokayukta is ineffective and insignificant."
 
On 24 August 2015, Justice ML Tahaliyani, who conducted the trial of the 26/11 Mumbai terror attacks and sentenced to death Mohammad Ajmal Amir Kasab, executed subsequently, took over as new Lokayukta in Maharashtra. 
 
As on 21 August 2015, there were 4,411 cased pending in the Lokayukta office, the RTI reveals.

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Mudra Bank's refinance scheme is a non-starter says Religare
Strict caps on onward-lending spreads have derailed Mudra Bank’s micro unit refinance scheme, with only Rs150 crore disbursed to banks and MFIs since April 2015 against the current corpus of Rs5,000 crore, says a report from Religare Capital 
 
Mudra Bank's micro unit refinance scheme has turned out to be a non-starter due to the strict caps on onward lending spreads, says a research report. According to a report from Religare Capital Markets Ltd, as against a current corpus of Rs5,000 crore, Mudra Bank has disbursed just Rs150 crore to banks and micro-finance institutions (MFIs) since April 2015. "The Reserve Bank of India (RBI)'s mandate that banks utilise Mudra funds to lend at base rates and non-banking financial companies (NBFCs) and MFIs restrict spreads to 6% and 10% renders the refinancing scheme untenable, considering the high operating and credit costs involved in unsecured microfinance lending," it said.
 
The RBI has fixed the rates at which Mudra Bank can lend funds under its refinance scheme for unsecured micro loans. For banks, this will be at cost of funds (COF) + 0.75%, for co-operative or regional rural banks at COF + 3.5%, and NBFCs or MFIs at COF + 4 to 6%. The central bank has also capped the spreads that banks, NBFCs and MFIs (Fig2) can charge borrowers if they avail of refinancing from Mudra. While banks have to lend at base rates, NBFCs and MFIs cannot earn spreads over 6% and 10% respectively, implying lending rates of 16-18% for NBFCs and 20-22% for MFIs. This renders Mudra refinancing unattractive due to the high operating and credit costs involved in unsecured microfinance lending.
 
 
The borrowing cost of NBFCs and MFIs is already at 10-11%, and even if they avail the refinance from Mudra Bank, there is little or no reduction in cost of funds for them. Religare said, "The government has not yet decided on the rates for borrowings and on-lending for small finance banks (SFB). If the on-lending rate is relaxed in order to attract more borrowers to the banking system, SFBs will benefit from higher growth and lower lending rates for micro loans."
 
Unused priority sector lending (PSL) funds of commercial banks will be used to set up Mudra’s Rs20,000 crore corpus. These funds will come at 6% interest, which will enable Mudra to refinance at a much cheaper rate to banks and NBFCs for on-lending. Religare said, the priority sector shortfall is about Rs30,000 crore per year and Mudra will have to compete with other agencies like National Bank for Agriculture and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI) for the allocation.
 
"Higher achievement of priority sector targets, poor loan growth and trading of PSL bonds could reduce the shortfall in the medium term, thereby restricting the availability of cheaper sources of funds. In addition, we believe that Mudra’s Rs20,000 crore corpus over the next five years will not suffice considering the large borrowing needs of small entrepreneurs. Clarity on market borrowings or borrowings through the international route is awaited – even if these materialise, Mudra’s cost of funds will be much higher," the research note said.
 
According to Religare, innovative credit guarantees may provide some relief to lenders. Mudra is proposing to give a credit guarantee for defaults on pools and to offer credit enhancement securitisation pools sold by NBFCs, MFIs and banks. The government has allocated Rs3,000 crore in budgetary support for this purpose and Mudra is finalising the scheme’s structure (fees and guarantee percentage). 
 
"In our view, this guarantee is most likely to apply only if the default is over and above the spread earned by banks, NBFCs or MFIs – not an attractive proposition for private banks and NBFCs," Religare concluded.
 
Mudra Bank was set up by the Indian government through a statutory enactment to refinance micro units under the Pradhan Mantri MUDRA Yojana (PMMY) scheme. It is a refinance agency and not a direct lending institution, set up to provide refinance support to intermediaries such as banks, MFIs and NBFCs for on lending. Mudra is a wholly-owned subsidiary of SIDBI and is currently registered with the RBI as an NBFC. Conversion to a bank will likely take place through a bill to be introduced in the Budget session of Parliament in 2016.

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