The approval would result in saving about a 1000 jobs in the US. Jobs are believed to have been behind Exim Bank's reversal of earlier decision of rejecting the arrangement
Responding to green commitment from Reliance Anil Dhirubhai Ambani Group (R-ADAG), the US Export-Import (Exim) bank today gave a preliminary approval for $600 million in loan guarantees to the supplier to Rs20,000-crore power project at Sasan in Madhya Pradesh, reports PTI.
The proposed estimated Rs2,800 crore loan guarantee will support the sale and export by US firm Bucyrus International.
The approval would result in saving about a 1000 jobs in the US. Jobs are believed to have been behind Exim Bank's reversal of earlier decision of rejecting the arrangement.
"This transaction was also made possible because of Anil Ambani's leadership and vision in diversifying Reliance Power's (R-Power) production portfolio of energy projects in India," Exim Bank chairman and president Fred P Hochberg said in a statement soon after a board meeting.
Commenting on the development, Bucyrus International president and CEO Tim Sullivan said: "We are confident that the remaining steps of this process, including financial review, will be completed expeditiously in order to allow Reliance Power to proceed with its project plan."
The Exim Bank of US reversed its earlier decision and approved the financing arrangement after R-Power committed to cap the emission from the about 4,000 MW project to 850 grams of CO2 per kilowatt hour.
Besides, the firm also agreed to develop a 250 MW renewable energy facility in India.
"We are pleased that Reliance is making this commitment to renewable energy, which allows us to sustain US jobs and promote both conventional and renewable energy exports," said Mr Hochberg.
The bank said the board of directors has approved a full financial, technical and environmental review of an application by R-Power for financing its coal-fired power plant.
R- Power's application is, however, still subject to final review and approval, it said.
On the other hand, Mr Sullivan said: "On behalf of all the employees of Bucyrus, we would like to praise the US Exim Bank for approving the environmental aspects of the R- Power Project application, which will allow us to provide mining equipment to the Indian project moving forward."
This is the first step in the process to provide financing, which will create nearly 1,000 jobs across 13 states in the US, as indicated by a study conducted by the Metropolitan Milwaukee Association of Commerce, he added.
The Centre has directed RIL to make a "pro-rata" cut in gas supplies to all existing customers if production from its KG-D6 field cannot support new customers so that new users like Essar Oil's Vadinar refinery can be given gas from its KG-D6 fields
The government has asked Reliance Industries (RIL) to cut natural gas supplies to power and fertilizer plants so that new users like Essar Oil's Vadinar refinery can be given gas from its KG-D6 fields, reports PTI.
The oil ministry this week issued written instructions to the billionaire Mukesh Ambani-run firm to make a "pro-rata" cut in gas supplies to all existing customers if the production from its KG-D6 field cannot support new customers, two sources with direct knowledge of the information have said.
This follows RIL expressing inability to sign gas supply contracts with more customers owing to production constraints.
Though RIL's Dhirubhai-1 and 3 fields in KG-D6 block can sustain an output of only 60 million cubic metres a day, the ministry has gone ahead and allocated about 64 million metric standard cubic meters per day (mmscmd) of gas.
RIL, so far, has signed or committed to sign agreements for supply of 57.8 mmscmd of gas. The company told the oil ministry at a review meeting last month that it can only ink contracts on a firm basis for another 2.2 mmscmd as it did not want to sign for the product it did not have, sources said.
Sources said the ministry had allocated gas to users, who were not ready to receive the fuel and that was the reason why at least Gas Sales and Purchase Agreements (GSPAs) for 5.18 mmscmd of gas could not be concluded.
Users awaiting signing of GSPAs include state-run NTPC (1.14 mmscmd), Essar Oil's Vadinar refinery in Gujarat (0.6 mmscmd), Oil and Natural Gas Corporation's (ONGC) LPG units (0.406 mmscmd), Rithala power plant in Delhi (0.4 mmscmd) and Bawana power plant (0.93 mmscmd).
Sources said RIL indicated its willingness to sign up with state-owned firms like NTPC and ONGC for the balance of 2.2 mmscmd uncommitted production it had but the ministry wanted others like Essar also to be accommodated.
"GSPAs have to be signed with all the customers, who have been allocated KG-D6 gas and are ready to take the gas," the ministry wrote to RIL on 12th July.
"On the day that KG-D6 production is not sufficient to cater to all the consumers with firm allocation, pro-rata cuts should be imposed on all firm consumers," it added.
An Empowered Group of Ministers (EGoM) had in October last year allocated close to 61 mmscmd of KG-D6 output on firm or permanent basis. Allocations were made only to firms that said they could consume the fuel immediately as the Gas Utilisation Policy does not provide for reservation or holding up of production for anyone.
Sources said the oil ministry allocated close to 64 mmscmd of KG-D6 gas and did not cancel allotments done to companies that failed to take deliveries according to their self- declared timelines.
Sources said customers with pending allocations are those who have not been in a position to take gas for a considerable period of time.
It has been suggested that since there can be no reservation of gas, as stipulated by the EGoM which framed the Gas Utilisation Policy, such allocations should automatically be deemed to have lapsed after a reasonable period. The oil ministry has so far not taken any view on this, they said.
Of the current production, about 14 mmscmd is sold to fertiliser plants, 28 mmscmd to power plants and 10 mmscmd to petrochemical plants and refineries. The remaining seven mmscmd of gas was consumed by other sectors such as sponge iron plants, LPG, city gas distribution and the East-West pipeline.
Essar Oil was allocated 0.6 mmscmd of gas on a firm basis, but the company has not yet signed a Gas Sales and Purchase Agreement (GSPA) with RIL, as its Vadinar refinery in Gujarat was not ready to receive gas from the field till recently.
Sources said RIL has told the oil ministry that it can presently sustain output of only 53-54 mmscmd from Dhirubhai-1 and 3 fields in the KG-D6 block and 7-8 mmscmd from the MA field in the same area.
The company had in December last year tested facilities at KG-D6 for a peak production rate of 80 mmscmd, but it estimates this level of production can only be achieved by next year after more wells are drilled. RIL has 18 producing wells and has sanction of 12 more to produce peak output.
Oil regulator Director General of Hydrocarbons (DGH) has endorsed RIL's view on limitation of production, saying the output was in line with the approved Field Development Plan (FDP).
According to the FDP, peak output of 80 mmscmd was envisaged in 2011 and is to last till 2016.
Most recently, RIL signed GSPAs for supply of 0.86 mmscmd to the Koyali refinery of Indian Oil Corporation (IOC) and 0.2 mmscmd to the Mumbai unit of Hindustan Petroleum Corporation Ltd (HPCL).
RIL is in the process of signing GSPAs with IOC for supply of 0.74 mmscmd to the Mathura refinery and with NTPC for 1.51 mmscmd.
In addition, 1 mmscmd gas is required for operation of the East-West pipeline, which transports KG-D6 gas from Kakinada in Andhra Pradesh to Baruch in Gujarat.
Welcome to the real convoluted world of counterfeit currency in India, where the victim is prosecuted, the fence eats the crop, and the criminals walk free. This is the third part of a three-part series
A few more anecdotes that illustrate how tortuous the system has become as far as counterfeit currency in the country is concerned.
1) A fairly senior news television producer, a person who knows enough people who matter, and whom bank managers defer to. This is what happened to him — last year, around October. I had to give some cash to a friend so I took out money from a bank-attached ATM, from ICICI Bank. He took the money and gave a couple of notes to his father-in-law, who is a real-estate guy. He immediately showed him that the notes were fake. They then took the notes around to some more trusted people dealing in cash on a daily basis and they all confirmed it. (I didn’t see them again). The notes are lost in the market now. (As, we were told, is the norm). I did go to two different ICICI Bank branches to complain but they all seemed clueless to what the procedure is, if any. One bank manager, who showed up promptly on hearing the news, told me to get the notes and said that he will burn them down as that is the normal procedure. But he said that there is no way I could prove that the notes are from the ICICI Bank ATM (or any ATM for that matter) so I might end up in trouble if I go to the cops. End of story.
The list goes on. Hospital cash counters have their own tales, as do people working at liquor shops, and everywhere, the response is the same — destroy or vanish the currency notes somehow — otherwise we will get into trouble. Liquor shop owners are even more droll — they claim they use the forged notes to take care of assorted overhead expenses, and justify it with a knowing look. And there is no dearth of anecdotes and evidence on how large sums of cash/currency seized in the course of raids is often found to contain sizeable numbers of forged or counterfeit currency notes.
What does the central bank have to say on the subject? The master circular mentioned in the previous article, and available here clearly spells out the RBI’s stance on the subject: http://www.rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=5828).
There are obviously a few major lacunae in this approach — first of all, the law as it stands in India does not define “ordinary people”. Next, the limit on the number (five) of forged currency notes is arbitrary. Finally, RBI in its wisdom, seeks to wash its hands of the matter by passing the blame completely on to the customer, or constituent, of the bank. Brilliant, pass the bay, and throw the baby out with the bathwater. Certainly makes the statistics look better. Something like the way police stations reduce the number of FIRs by simply not registering them!
However, what we do learn from this is that the matter has been escalated. But that must be cold comfort to those impacted.
So, this, however, still does not answer the basic question: what should you do if you find yourself saddled with counterfeit currency?
Important note number (1): You have for all practical purposes lost the value of the counterfeit currency in your possession. At least until the perpetuator is found. There is, as of now, no apparent way to claim damages. But you are an honest citizen, and want to try to do the correct thing?
There are two main streams:
1) Assuming you have drawn the currency from a bank (ATM or counter), and then you have figured out somehow that the currency is counterfeit, then in the first instance you would be wrongly advised to go back to the same bank. It is a bit like catching a thief and then begging him for justice. The bank’s position is explained above. They quote the law to scare us.
The law as it stands, is Section 39 of the CrPC and Section 489 of the IPC, reproduced here:
Section 39 (1) (xii) of the CrPC says: Public to give information of certain offences. (1) Every person, aware of the Commission of, or of the intention of any other person to commit, any offence punishable under any of the following sections of the Indian Penal Code (45 of 1860) . . . namely (xii) Sections 489A to 489E, both inclusive (that is to say, offences relating to currency notes and bank notes) . . . shall, in the absences of any reasonable excuse, the burden of proving which excuse shall lie upon the person so aware, forthwith give information to the nearest Magistrate or police officer of such Commission or intention.
Here is Section 489A to 489E:
489A. Counterfeiting currency-notes or bank-notes: Whoever counterfeits, or knowingly performs any part of the process of counterfeiting, any currency-note or bank-note, shall be punished with 152 [imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine. Explanation: For the purposes of this section and of sections 489B, 489C, 489D and 489E, the expression "bank-note" means a promissory note or engagement for the payment of money to bearer on demand issued by any person carrying on the business of banking in any part of the world, or issued by or under the authority of any State or Sovereign Power, and intended to be used as equivalent to, or as, a substitute for money.
489B. Using as genuine, forged or counterfeit currency-notes or bank- notes: Whoever sells to, or buys or receives from, any other person, or otherwise traffics in or uses as genuine, any forged or counterfeit currency-note or bank-note, knowing or having reason to believe the same to be forged or counterfeit, shall be punished with 152 [imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
489C. Possession of forged or counterfeit currency-notes or bank-notes: Whoever has in his possession any forged or counterfeit currency-note or bank-note, knowing or having reason to believe the same to be forged or counterfeit and intending to use the same as genuine or that it may be used as genuine, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both.
489D. Making or possessing instruments or materials for forging or counterfeiting currency-notes or bank-notes: Whoever makes, or performs, any part of the process of making, or buys or sells or disposes of, or has in his possession, any machinery, instrument or material for the purpose of being used, or knowing or having reason to believe that it is intended to be used, for forging or counterfeiting any currency-note or bank-note, shall be punished with 152 [imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
489E. Making or using documents resembling currency-notes or bank-notes: (1) Whoever makes, or causes to be made, or uses for any purpose whatsoever, or delivers to any person, any document purporting to be, or in any way resembling, or so nearly resembling as to be calculated to deceive any currency-note or bank-note shall be punished with fine which may extend to one hundred rupees. (2) If any person, whose name appears on a document the making of which is an offence under sub-section (1), refuses, without lawful excuse, to disclose to a police officer on being so required the name and address of the person by whom it was printed or otherwise made, he shall be punished with fine which may extend to two hundred rupees. (3) Where the name of any person appears on any document in respect of which any person is charged with an offence under sub-section (1) or on any other document used or distributed in connection with that document it may, until the contrary is proved, be presumed that person caused the document to be made.
The operative term here is: “knowing or having reason to believe the same to be forged or counterfeit”. Your correspondent took the effort of getting a lawyer, a CA, a retired policeman and a retired income-tax person to guide him, and this is the best they could come up with — and this is the difficult part — instead of going to a bank, you should head for a police station or a magistrate, with the counterfeit note duly cancelled and marked by you as “forged/counterfeit” so that there is no question of anybody suspecting you of misusing this currency, and lodge an FIR as a private citizen against the bank from whose ATM or teller you got this counterfeit currency. Take a digital photo of this cancelled currency note and place it in your records with a date and time, as well as a brief note on how you got the currency in the first instance, and give the whole lot to your lawyer or to some reliable people before you head for the police station or magistrate. Preferably, take a lawyer with you, but certainly cancel the currency note by writing ‘COUNTERFEIT’ on it in bold letters so that no entity can accuse you of having malafide intentions.
It will now have to be up to the investigative agencies to do what they need to, and you shall have to cooperate, but since you have marked the notes — you are clear.
The second scenario, where you are depositing cash in a bank, and some of it turns out to be counterfeit, is still without a solution, as of now. This will need co-operation and a change in attitude as well as approach from RBI as well as the finance ministry — which, as you can see above, is still awaited.
Moneylife is seized of this subject, which comes up regularly at many different forums and meetings, and shall keep readers in the loop. Till then, prevention is the best part of cure, and if the ATMs in your area are suspect, then use the teller — and get the bank to run the currency notes through their machines before accepting them.