Happy Janmashtami
Wednesday, August 28, 2013
CBI starts inquiry against big loan defaulters
Press Trust of India |
'A bulk of NPA is from top 30 accounts which is learnt to be running into thousands of crores. CBI has already initiated inquiry into some of the big defaulter accounts,' Sinha said
CBI has initiated an inquiry into cases of defaulters of big loans from public sector banks, its chief Ranjit Sinha said today while emphasising that bulk of non-performing assets were connected to 30 defaulter accounts.
'A bulk of NPA is from top 30 accounts which is learnt to be running into thousands of crores. CBI has already initiated inquiry into some of the big defaulter accounts,' Sinha said.
He did not reveal the specifics of the probe as it may derail the ongoing inquiry by the agency.
Speaking at the fifth annual conference of chief vigilance officers of Public Sector Banks and Financial Institutions and Officers of CBI, Sinha cited number of issues which adversely affect agency's efforts to track and recover these assets.
Highlighting issues which hamper CBI investigation into bank frauds, he said banks are often reluctant to declare bad accounts as fraud despite there being clear manifestations. The CBI Chief said the banks need to realise that delay in reporting of frauds adversely affect tracking and recovery of proceeds of crimes as the initiative is lost.
Sinha said the banks are often reluctant to fix accountability of their staff, resulting in difference of opinion between them and the agency regarding the role of public servants.
'In my view there should be no reason for denial of sanction for prosecution wherever malafide acts by delinquent officials caused huge losses to the banks,' he said.
Sinha said bank frauds involving amount above Rs 50 crore has grown almost 10 times in two years.
'Large value frauds involving amount of Rs 50 crore and above have also increased more than 10 folds from three cases in 2009-10 involving an amount of Rs 404.13 crore to 45 cases involving Rs 5334.75 crore in 2013,' he said.
Tuesday, August 27, 2013
Litigation has gone beyond reach of poor man: Supreme Court
PTI : NEW DELHI, AUG 25 2013, 12:23 IST
Fighting legal battle in courts has become so expensive that it has gone beyond the reach of a poor man, the Supreme Court has said while expressing concern over the legal profession getting commercialised.
Virtually holding a mirror to itself, the apex court said that judicial proceeding is so slow that people in the country are convinced that a case would not finish in their lifetime.
"In the present era, the legal profession, once known as a noble profession, has been converted into a commercial undertaking. Litigation has become so expensive that it has gone beyond the reach and means of a poor man.
"For a long time, the people of the nation have been convinced that a case would not culminate during the life time of the litigant and is beyond the ability of astrologer to anticipate his fate," a bench of justices B S Chauhan and S A Bobde said.
Observing that lawyers are equal partners with judges in the administration of justice, the apex court said, "Advocates cannot behave with doubtful scruples or strive to thrive on litigation."
It said wilful disregard for litigants' interest by a lawyer is reprehensible and unbefitting for an advocate.
"Law is no trade, briefs no merchandise. An advocate being an officer of the court has a duty to ensure smooth functioning of the court. He has to revive the person in distress and cannot exploit the helplessness of innocent litigants. A wilful and callous disregard for the interests to the client may in a proper case becharacterised as conduct unbefitting an advocate."
The apex court also frowned upon the "multi-tier operation of one lawyer hauling a client and then acting as a facilitator for some other lawyer to draw proceedings or engage another lawyer for arguing a case is definitely an unchartered and unofficial system which cannot be accepted as in essence, it tantamount to a trap for litigants which is neither ethically nor professionally a sound practice."
"Such conduct is ridiculously low from what is expected of a lawyer," it said.
The court made the observations while pulling up an advocate on record for "lending" his signature, for consideration, to a petition filed in the top court and thereafter not even once appearing in the case.
Advocates on record are those lawyers who alone are eligible to file cases in the apex court.
An advocate on record (AOR) is not a "guest artist" who lends his signature to a petition, the bench said, adding, "Such an attitude tantamount to cruelty in the most crude form towards the innocent litigant. In our humble opinion, conduct of such AOR is certainly unbecoming of an AOR."
Parliamentary panel.to scan PSB bad loans
FE:ARUN S : NEW DELHI, AUG 27 2013, 01:33 IST
The rising bad loans of public sector banks (PSBs) and the deterioration in their asset quality have come under the scanner of a parliamentary panel.
The Parliamentary Consultative Committee on Finance will question the government this week on the increase in non-performing assets (NPAs) of PSBs and the measures taken to contain them, sources told FE.
The finance ministry is looking into the books of PSBs to see if there are any cases of “aggressive or reckless lending” in the past or an unexplained jump in the credit growth that has resulted in a rise in NPAs, sources said.
“We had an isolated incident where there was a huge rise in credit growth, but later it was found that those were all financially sound accounts. However, we are monitoring the lending practices of banks now from the NPA point of view,” a senior finance ministry official told FE.
A member of the Parliamentary committee, on condition of anonymity, said the panel considers the rising NPAs a serious problem that needs to be dealt with urgently. This is even as the Central Bureau of Investigation (CBI) is looking into the top 30 major loan defaulter accounts to see if there are any wrongdoings by officials and borrowers.
Sources said the chief vigilance officers of banks could soon be told to prepare a list of cases where there are suspected malpractice in lending, loan sanctioning and disbursement. The idea is to see if anyone has committed any fraud to obtain loans by forging collateral titles, fudging numbers in balance sheets and financials of companies as well as in asset valuation, they said.
The issue of the measures taken by the government to help banks recover NPAs at the earliest was also raised on Friday in Parliament. Finance minister P Chidambaram in a written reply told Lok Sabha the government had asked PSBs to increase the pace of recovery and manage NPAs.
It was suggested to the PSBs that the write-offs of loans should not be more than the recovered amount, the minister said. He had said the PSBs were told to conduct a special drive for recovery of loss assets in addition to appointing nodal officers for recovery.
PSBs were also told to put in place an early warning system and constitute a Board-level committee to monitor the recovery. The minister also pointed to the RBI’s instructions to banks to put in place a loan recovery policy and a robust mechanism for early detection of signs of distress, including prompt restructuring in case of all viable accounts.
He also said recently enacted Enforcement of Security Interest and Recovery of Debt Laws (Amendment) Act, which came into force on January 15, had removed certain bottlenecks in the recovery of bad debts.
Gross NPAs of public sector banks had jumped to R1.79 lakh crore at the end of June quarter from R1.55 lakh crore at March 31, 2013.
“The high level of NPAs cost the banks by way of loss of interest income, besides provisioning, recovery and litigation costs,” RBI had said. The RBI annual report had said the gross NPAs of scheduled commercial banks (SCB) had risen from 2.9% in 2011-12 to 3.4% in 2012-13. In fact, the grosss NPAs of all SCBs rose from R50,000 crore in March 2007 to R1.83 lakh crore in March 2013. The net NPAs have also climbed to R88,300 crore in March 2013.
The banking industry in general has suffered due to the slowdown and delay in government clearances to various projects. SCBs also ended up with a lower profit growth of 12.8% in 2012-13 from 14.6% in the previous fiscal due to the higher provisioning.
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