Companies & Sectors
StanChart says to pay $330 million to settle US Iran probe

The alleged transactions by StanChart mainly involved US dollar transfers for state-owned Iranian banks, including the central bank, that fell under US sanctions aimed at curtailing Iran's controversial nuclear programme

Hong Kong: British bank Standard Chartered has said it expects to pay around $330 million to settle with US authorities 'very shortly' over allegations it violated sanctions on Iran, reports PTI.

 

The sum comes on top of a $340 million fine it paid in August to settle a case in New York state, where regulators had accused it of hiding some $250 billion in transactions with Iranian banks, charges denied by the lender.

 

"The group remains in active and constructive discussions with the other US agencies on the resolution of the group's historical US sanctions compliance," Standard Chartered said.

 

"We anticipate that these discussions will conclude very shortly and are likely to result in the group paying a sum of approximately $330 million," it added in a statement to the Hong Kong stock exchange, where it is listed.

 

The latest settlement would conclude investigations by the US Justice Department, the Treasury, the Federal Reserve and the Manhattan district attorney's office, the Wall Street Journal reported last week.

 

The alleged transactions mainly involved US dollar transfers for state-owned Iranian banks, including the central bank, that fell under US sanctions aimed at curtailing Iran's controversial nuclear programme.

 

The New York Department of Financial Services said in August that the activity "left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes".

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RBI asks CICs to take prior nod before overseas JV investments

RBI has asked all core investment companies investing in joint ventures or subsidiaries or representative offices overseas in financial sector to obtain require prior approval from the central bank

 
Mumbai: The Reserve Bank of India (RBI) has said core investment companies (CICs) would require prior approval from the central bank for investing in joint ventures/subsidiaries or offices overseas in financial sector, reports PTI.
 
"All CICs investing in joint ventures or subsidiaries or representative offices overseas in financial sector will require prior approval from the Bank," RBI said in a release.
 
CICs are those companies that invest primarily in group companies in different sectors of the economy.
 
As holding companies they need to invest in both financial and non-financial activities.
 
"It has therefore been decided to issue a separate set of directions to CICs with regard to their overseas investments," RBI said.
 
RBI said the CICs currently exempted from registration and desirous to make overseas investments in financial sectors would require a certificate of registration from RBI and would have to comply with all the regulations pertaining to this.
 
However exempted CICs do not require to be registered with RBI for making investments in non-financial sector, it added further.
 

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'Action against banks if muscle-men engaged for loan recovery'

Finance Minister P Chidambaram said that irrespective of NPAs going up or down, the loan recovery should be made in a respectful manner

 
New Delhi: Finance Minister P Chidambaram has warned that severe action will be taken against banks if they employ muscle-men or undesirable elements to recover loans, reports PTI.
 
"If there are specific instances of any bank employing muscle-men or undesirable elements to recover loans, kindly bring it to my notice. The severest action will be taken," he said during the Question Hour in the Rajya Sabha.
 
Chidambaram said he has already told public sector unit (PSU) bank chiefs that irrespective of non-performing assets (NPAs) going up or down, the loan recovery should be made in a respectful manner.
 
"We must respect the borrower; we must respect the borrower's circumstances and the recovery must be done in a respectful manner. NPAs rise or fall depending upon the economic conditions prevalent in the country. Today, the world over, all economies are challenged.
 
"The Indian economy also faces stress. It is the stress which is reflected in the rising NPAs. But when the economy does well, NPAs will come down as they did between 2004 and 2008," he said.
 
Chidambaram said that he has already told bank CMDs that they should "handhold sectors which are under stress so that they come out of difficulties".
 
The Minister also told banks to take initiatives to increase the recovery of NPAs. 
 
"Government has advised public sector banks to take a number of new initiatives to increase the pace of recovery and manage the NPAs, which include appointment of nodal officers for recovery, to conduct special drives for recovery of loss assets...," he said.
 
Chidambaram said banks are obliged to follow Reserve Bank of India (RBI) guidelines regarding recovery of loans.
 
He further said that "no special favour" should be shown to large borrowers by banks in recovery of loans. "I will not allow banks to give special favours to large borrowers."
 
Banks are required to monitor their NPAs and take steps to bring them down through upgrade and recovery among others.
 
RBI also monitors the NPA levels in banks.
 
Non-performing assets of public sector banks rose to over Rs1.11 lakh crore in 2012 from Rs52,807 crore in 2003, as per the RBI data.
 

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COMMENTS

mam chand aggarwal

4 years ago

Many of Banks had been adopting ULTA PULTA method of recovery.Wher one gets loan of Rs 1 lac ,does not repay raising outstanding of 2 lacs after 5/6 yrs.Bank enhance the value of mortgage sanction new loan of 3/4 lacs.Thus makes the recovery of 2 lacs and balance deducting some under table amoumt gives to loanees.Hence recovery is 100%,no NPA, no need of musle man.But question arises,if one could not repay 1 lac,how will he repay fresh loan of 3/4 lacs ?

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