Latest News : Merger of Public Sector Banks(PSBs)

 

According to a report from CNBC-TV18 on May 17, the Union government of India has stated that there are no plans to merge public sector banks (PSBs). An unnamed government official confirmed that there is no proposal for a merger and that they are not aware of any discussions regarding such a merger.

Currently, India has 12 state-run banks. The number of banks reduced after a merger exercise in 2020, which saw 10 state-run banks being merged into four. These mergers included Punjab National Bank (PNB) absorbing Oriental Bank of Commerce and United Bank, Canara Bank absorbing Syndicate Bank, Union Bank of India absorbing Andhra Bank and Corporation Bank, and Indian Bank merging with Allahabad Bank.

In December 2023, there were speculations of a merger between Union Bank and UCO Bank, as well as Bank of India and Bank of Maharashtra. However, the finance ministry clarified that these speculations were related to a parliamentary committee on subordinate legislation and had no connection to policies on bank mergers.

A document circulating on X (formerly Twitter) detailed a proposed merger between Union Bank and UCO Bank, and Bank of India and Bank of Maharashtra. The document was titled “Study Visit programme of the Committee on Subordinate Legislation, Lok Sabha to Mumbai and Goa from 2 to 6 January 2024” and was attributed to Ramesh Yadav, an undersecretary of the Government of India.

The document was shared with various stakeholders, including the governor of the Reserve Bank of India, chairman of Life Insurance Corporation of India, Insurance Regulatory and Development Authority of India, and National Bank for Agriculture and Rural Development. It was also addressed to the managing directors and CEOs of UCO Bank, Bank of Maharashtra, Bank of India, and Union Bank of India, as well as several  insurance companies.

The finance ministry clarified that the document was solely related to the parliamentary committee on subordinate legislation and had no connection to bank merger policies. The agenda of the meeting was reportedly changed, and the new agenda did not mention any merger plans. In other words, there are currently no proposals for a merger between Union Bank of India and UCO Bank, Bank of India, and Bank of Maharashtra.

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Difference between salary of LIC officer and PSB officer

 In a recent analysis conducted by the All India Bank Officers’ Association, it has been revealed that officers of the Life Insurance Corporation of India (LIC) have received a more favorable wage settlement deal compared to their counterparts in state-owned banks.

According to the association, the starting pay of the lowest-grade officer in LIC, in which the government holds a 96.50 percent stake, is ₹40,155 higher per month than that of a public sector bank (PSB) peer. The entry-level salary in LIC amounts to ₹88,635 per month, while it is ₹48,480 in a PSB. In the top-management grade, an LIC officer earns ₹3,37,945 per month, whereas their PSB counterpart earns ₹1,73,860.

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S Nagarajan, the General Secretary of AIBOA, emphasized that the wage revision is not an act of benevolence but a legitimate demand of the workforce to share in the wealth and prosperity created by their industry.

The latest wage revision for LIC employees is effective from August 1, 2022, while for PSB employees, it is effective from November 1, 2022. The wage revision for LIC, which has been approved by the government, will result in a 17 percent increase in the life insurer’s annual wage bill.

Bank unions have also agreed to a 17 percent increase in salary as part of the 12th industry-wide bipartite wage settlement.

Nagarajan highlighted that in the previous wage revision for LIC employees, the dearness allowance (DA) per four points raise was 0.08 percent, meaning the compensation against the price rise was 108.10 percent, while in the banking industry, it was 100 percent.

In addition to the wage revision, LIC workers have been granted a five-day work week since August 1, 2021.

Nagarajan stressed the need for parity in the DA compensatory system for LIC and PSB officers. He mentioned that although they have achieved financial benefits through wage revision without resorting to any actions, their main demands regarding LTC monetization for SBI officers and a five-day work week are still pending. He assured that they will continue to pursue these demands through sustained action programs involving all officers.

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Bank of India(BoI) Q4 net profit grows 7%, declares dividend

 

State-owned Bank of India on Friday (May 10) reported a 7% year-on-year (YoY) increase in net profit at ₹1,439 crore for the fourth quarter that ended March 31, 2024. In the corresponding quarter, Bank of India posted a net profit of ₹1,350 crore, the lender said in a regulatory filing.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, increased by 7%, coming at ₹5,937 crore against ₹5,523 crore in the corresponding quarter of FY23.

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Bank of India's net interest margin (NIM) at a global level witnessed a decline, standing at 2.92% in Q4 of FY24, compared to 3.15% in Q4 of FY23. It was 2.85% in Q3 of FY24. Similarly, the NIM for the domestic segment also experienced a decrease, registering at 3.30% in Q4 of FY24, down from 3.59% in Q4 of FY23, but up from 3.21% in Q3 of FY24.

The global return on assets (RoA) dipped slightly to 0.61% in Q4 of FY24 from 0.63% in Q4 of FY23. The cost to income ratio at the global level rose to 53.73% in Q4 of FY24, compared to 51.48% in Q4 of FY23.

Bank of India’s yield on advances at a global level improved by 52 basis points (bps) year-on-year (YoY), reaching 8.47% in Q4 of FY24, up from 7.95% in Q4 of FY23. However, the cost of deposits witnessed a notable increase, standing at 4.71% in Q4 of FY24, compared to 3.91% in Q4 of FY23.

The global return on assets (RoA) dipped slightly to 0.61% in Q4 of FY24 from 0.63% in Q4 of FY23. The cost to income ratio at the global level rose to 53.73% in Q4 of FY24, compared to 51.48% in Q4 of FY23.

Bank of India’s yield on advances at a global level improved by 52 basis points (bps) year-on-year (YoY), reaching 8.47% in Q4 of FY24, up from 7.95% in Q4 of FY23. However, the cost of deposits witnessed a notable increase, standing at 4.71% in Q4 of FY24, compared to 3.91% in Q4 of FY23.

The board has recommended a dividend of ₹2.80 (i.e. 28%) per equity share  of face value of ₹10 each for the FY2023-24 subject to the approval of shareholders. 

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RBI's draft on tighter norms for infra project financing; what will its impact be?

The Reserve Bank of India (RBI) released a draft proposing tighter norms for lending and heightened monitoring for under-construction infrastructure projects.

On May 3, the RBI proposed that lenders should set aside higher provisions for all infrastructure projects that are under-construction, and also asked the lenders to ensure strict monitoring of any emerging stress.

Nifty PSU Bank index plunged around 3.2 percent. The top laggards on the index were Punjab National Bank, Canara Bank, Bank of Baroda and Union Bank, all slumping over four percent.

NBFCs such as REC, Power Finance and IREDA also crashed up to 12 percent as they are they focus on financing power projects, which are a significant part of the infrastructure pie.

Public-sector lenders are disproportionally impacted since public banks have a higher exposure to infrastructure loans.

The RBI note highlighted that the proposal was "taking into account the experience of banks with regard to financing of project loans."

Currently, India is seeing a boom in infrastructure and manufacturing projects, led by the central government's drive to boost the economy.

However, in the past, the domestic banking sector has faced large defaults on infrastructure loans, which pressured the banking system. RBI’s  proposed guidelines are an attempt to prevent any such cases reoccurring, given the ongoing thrust on infrastructure spending.

When a project is in the construction phase, the RBI proposed that lenders set aside a provision of five percent of the loan amount. This will reduced to 2.5 percent once a project is operational.

The required provisions will further be cut to one percent once the project has adequate cash flow to repay current obligations.

The lenders are required to make the five percent provision in a phased manner: two percent in FY25, 3.5 percent in FY26 and five percent by FY27.

Currently, lenders are required to have a provision of 0.4 percent on project loans that are not overdue or stressed.

Also, banks should have clear visibility on the date on which a project is expected to begin commercial operations and increase provisions in case operations are delayed. Any delay over three years in beginning an infrastructure project should change the classification of the loan from standard to stressed.

A Kotak Institutional Equities report said "the memories of the last corporate cycle are quite fresh." This, in turn, has created fresh concerns around the guidelines. However, the report noted that infrastructure loans in the banking system are relatively small at 8 percent of all loans compared to over 15 percent in FY15.

Additionally, the mix of these loans has a higher share of operational loans rather than under construction loans. Besides, the promoters that worked through the last corporate cycle have stronger balance sheets, added the brokerage.

JM Financial said the move will lead to lower returns for lenders in project finance and reduce the incremental appetite for such exposures, if the guidelines are implemented in the current form.

It is a prudent move from the risk management perspective, but it could be detrimental to growth in the infrastructure sector as it is capital-intensive.

When compared to private lenders, public-sector banks will see a larger impact if the draft is implemented. In a report, Kotak Institutional Equities noted that public banks have a higher exposure to infrastructure loans and less to commercial real estate.

On the other hand, private banks take an exposure to the sector through financing operational assets, instead of funding projects under construction.

JM Financial predicted that if the guidelines are implemented, the incremental credit costs for public sector banks would increased in the range of  12-21 bps.

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Will Bank Employees Get A 5-Days Banking ? Yes or No

The demand for a 5-day work week by bank employees is likely to be fulfilled soon, as an agreement in this regard has already been signed between the Indian Banks’ Association (IBA) and employee unions. Now, just the government’s approval is pending, which the bank employees expect to get through later in 2024.

Bank employee unions, like the United Forum of Bank Unions, have been pushing for a 5-day workweek with .......

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CBI files chargesheet against former CMD of PSU Bank

 The Central Bureau of Investigation (CBI) has filed a charge sheet against Alok Kumar Misra, the former chairman and managing director (CMD) of Bank of India (BOI) and Oriental Bank of Commerce (OBC), along with 33 other individuals and companies. This charge sheet is related to the alleged bank fraud committed by Dewan Housing Finance Ltd (DHFL), which is worth nearly ₹35,000 crore. The fraud was allegedly carried out by the Wadhawan brothers, Kapil and Dheeraj, who ran DHFL. The charge sheet also exonerates 49 other companies that were originally named as accused in the case.

According to the CBI, Alok Kumar Misra allegedly received a benefit of ₹1.5 crore from DHFL in the form of a discounted flat for his son in Mumbai. This benefit was allegedly given to him in exchange for sanctioning loans in his capacity as the head of BOI and OBC. Misra served as the CMD of BOI from 2009 to 2012 and OBC from 2007 to 2009.

The CBI’s investigation revealed that between January 2010 and December 2019, a consortium of 17 banks extended credit facilities worth ₹42,871 crore to DHFL. The Wadhawan brothers allegedly siphoned off the funds to shell companies known as ‘Bandra Book Entities,’ causing a loss of ₹34,926 crore to the consortium. 

The charge sheet also names other companies and individuals who helped the Wadhawan brothers divert funds.

It is important to note that the charge sheet against Alok Kumar Misra was filed after obtaining sanction under section 17A of the Prevention of Corruption Act, which is mandatory for investigating a public servant. However, a sanction under section 19 of the PC Act, which is mandatory for prosecuting a public servant, is still pending.

The charge sheet was taken cognizance of by a Delhi court on April 27.

During its investigation, the CBI found that out of the 131 companies originally named in the first information report (FIR) filed in June 2022, 49 companies were “genuine” borrowers without any bad intentions. These companies had entered into actual loan transactions with DHFL, following the necessary procedures and guidelines set by the Reserve Bank of India (RBI). 

The court has exonerated these companies from any criminal liability based on the CBI’s findings. The CBI has identified genuine loan transactions worth ₹13,425 crore, out of which ₹5,836 crore has already been repaid by these 49 companies to DHFL or the Resolution Professional.

The CBI has filed 2,70,000 pages of fresh documentary evidence in 20 trunks in the court, along with a list of 521 new witnesses to support its case against the accused.

It is worth mentioning that Alok Kumar Misra has held several high-level positions in the banking sector, including the chairman and managing director of Bank of India and Oriental Bank of Commerce.

The ownership of DHFL has changed since the bank fraud case came to light, as it was taken over and sold under India’s bankruptcy code.

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Biggest Auto Finance Scam in Banking Sector

 

A major financial scam involving a fake ‘Mahindra’ account, over 2,000 ghost customers, and a fraud amounting to Rs.150 crore has been uncovered in Mizoram, making it the largest auto-finance scam in northeast India. The Mizoram Police has successfully busted the gang responsible for the scam, which had been operating for nearly four years, and has arrested 11 individuals, including the alleged mastermind.

The alleged mastermind of the scam was a former employee of Mahindra & Mahindra Financial Services Limited (MMFSL), a company that primarily provides vehicle loans. This individual created fake files for more than 2,000 ghost customers and sanctioned car loans using these fraudulent documents. The scam was made possible through collusion between certain employees and car dealers. The fraudsters exploited loopholes in MMFSL’s oversight process, including KYC verification, process auditing, tele-verification, and supervisory mechanisms, allowing them to continue their illegal activities from 2020 to 2024.

The alleged mastermind, Mr. Hussain, conspired with a few colleagues and opened a fake bank account in 2020 under the name “Mahindra Finance Limited,” which closely resembled the original brand name. This bank account served as a repository for the defrauded money for over three years. Two of Mr. Hussain’s accomplices, Edenthara and Lalthankima, impersonated high-ranking company officials and submitted forged documents to support the creation of the fake bank account. They even went as far as creating fake stamps, seals, and other documents to make the account appear legitimate. The purpose of this account was to receive payments from car dealers involved in the scam.

The Mizoram Police, specifically the Crime Investigation Department (CID), conducted a raid at Mr. Hussain’s residence on March 29, resulting in his arrest. During the raid, law enforcement seized a laptop and several mobile phones as evidence. Subsequently, on April 2, Edenthara and Lalthankima were arrested. During their interrogation, they revealed that Mr. Hussain had prepared fake documents and misrepresented their office designations to open the fake bank account. They also disclosed that Mr. Hussain would remove the fake files from the office and store them at the house of another accomplice, Manoj Sunar. Mr. Sunar received a monthly payment of ₹15,000 for his assistance in carrying out the fraudulent operations. On April 3, Mr. Sunar was arrested, and during a search of his residence, seven sacks containing files from 2022 to 2024 and forged stamps were recovered.

To avoid suspicion and ensure that the ghost accounts did not become non-performing assets (NPAs), Mr. Hussain and his associates made EMI payments for the fake accounts by withdrawing money from the fake “Mahindra” account. By doing so, they aimed to maintain the appearance of legitimate transactions. The police have frozen 26 ghost bank accounts, totaling nearly ₹2.5 crores, as well as the accounts of car dealers worth ₹1 crore. Additionally, 15 cars worth ₹3 crore have been recovered. Car dealers have directly returned approximately ₹3.47 crores to MMFSL. During the investigation, law enforcement also seized three laptops, ten mobile phones, 549 ghost customers’ files, 25 forged seals, numerous SIM cards, two personal diaries, and various other identity documents.

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Bank Officers Union announces All India strike against New Transfer Policy

The All India Bank of Baroda Officers’ Association has declared a strike in protest against the bank management’s new anti-officer transfer policy. According to the circular, officers who have completed 6 years in the officers’ cadre within their current zone can request a transfer to another zone of their preference after this period. The union views this policy as unjust due to the lengthy 6-year duration and is demanding a reduction in the required duration.

The BOB Officers’ Union has threatened an All India Strike if the revised transfer policy is not revoked. They argue that the current policy imposes undue hardship on officers and are advocating for a more flexible approach to transfers.

• Black Badge/Black ribbon wearing from Monday, 29th April.

• Submission of Memorandum to all Regional Heads addressed to our Bank’s MD&CEO by team of Office bearers/Activists on 30th April 2024 evening.

• Demonstrations outside all Regional Offices on one evening during the period 1st May to 4th May 2024, taking into account the election model code of conduct as applicable in the relevant area.

• All India Strike on 7th June 2024, after General Elections are over. In the meantime, we shall serve Strike Notice to the Bank.

The last year transfer policy/IZT were exercised with criteria of 3 years for lady officers and 4 years for Male officers and now with policy being changed to 6 years, the sudden increase in the minimum relaxation tenure for this IZT(Inter Zone Transfer) exercise is creating panic among the officers and demoralising concerned officers and their family members, who have been posted outside the parent zone during previous IZT exercises.

Earlier officers with age of 55 are eligible for retransfer to their parent zone or to the zone of their choice, now in this IZT policy the age criteria has been increased to 58 years which is ruthless.

The IZT policy eligible period for the employees being 6 years is very long and staying away from families is unbearable, which adversely impact family life of the officer’s.

Since 2019 there is no recruitment in Bank and all previous IZT batches have been retransferred with 3 / 4 years ( lady staff 3 years) criteria, Management’s sudden shift to 6 Years minimum tenure is demoralizing officer employees as there is no work life balance in our bank due to IZT Transfers.

Many of the lady officers were undergoing fertility treatments and still were transferred midway and suffered due to delay in treatment due to IZT Still there are some officers whose IZT request has been rejected in earlier IZT exercises for shortage of a day or two with respect to the cutoff date. But these officers has been identified by the Management during the IZT 2019-20 and relieved late by the respective zonal office/regional office which in turn effected the officers during retransfer to the parent zone.

The Management is thinking that they have given enough concession for women and men under the IZT policy but they have forgotten that most of the employees who have undergone IZT posting have been undergoing physical and mental agony, since many of the officers have left their families back at their parent zone due to health problem of parents/in laws, nontransferable employment of spouse, education problem of children etc. This IZT policy has further demotivated and shut down the hope of these officers of getting back to their family.

Every year all the officers of the bank are obeying the instructions of the top management and undergoing the IZT even though they are facing some personal problems with a hope that they will be transferred back to the parent zone after completion of 3 years’ service.

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Bank of Maharashtra Q4 Results: Net Profit Jumps 45% , Rs 1.40 Dividend Declared

Public sector lender Bank of Maharashtra on April 26 reported a net profit of Rs 1,218 crore for fiscal fourth quarter, a 45 percent jump from the year-ago period.

The bank had reported net profit of Rs 840 crore last year.The PSU lender also said that its board approved the proposal to raise up to Rs 7,500 crore through various modes.

"Board approved raising of Capital up to Rs 7,500 crore through Follow-on Public Offer (FPO) / Rights issue / Qualified Institutional Placement (QIP) issue, Preferential issue, ESPS or any other mode or combination thereof and / or through issue of BASEL III Compliant Tier I and Tier II Bonds or such other securities as may be permitted under applicable laws etc., ubject to the necessary approvals," said Bank of Maharashtra in a stock exchange filing.

Read More - Quarterly Results of PSU Banks for Q4FY24

 

The net interest income (NII) of the lender was up 18.2 percent YoY and stood at Rs 2,584 crore versus Rs 2,187 crore. The GNPA of the lender stood at 1.88 percent versus 2.47 percent last year and NNPA stood at 0.20 percent versus 0.25 percent last year.

The lender also declared a dividend of Rs 1.4 per equity share of Rs 10 face value. The provision coverage ratio of the bank stood at 98.34 percent. Net interest margin of the bank stood at 3.97 percent versus 3.78 percent last year.

On advances side, the bank witnessed a growth of 16.30 percent and total advances stood at Rs 2.03 lakh crore versus Rs 1.75 lakh crore last year. Deposits of the bank increased 15.66 percent and stood at Rs 2.7 lakh crore versus Rs 2.34 lakh crore last year.

Total branches of the bank increased to 2489 branches in March 2024 from 2203 branches in March 2o23.

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Gold Loan Fraud of Rs. 1.24 crore in PSU Bank

A significant gold loan fraud case was recently discovered at the Bank of India. In the Bank of India branch in Saraidhela, 28 individuals turned in 3.5 kg of phony gold in exchange for a Rs. 1.24 crore bank loan. A police report has been made against the business correspondent, gold valuer, and borrowers who were complicit in this fraud.

The accounts turned non-performing and the gold secured by the loan was revalued, which is when the issue was discovered. The fact that the gold being held in safe custody was counterfeit stunned the branch officers. Vishwa Pratap Singh, the senior branch manager, filed a police report at the Saraidhela station.

From January 2022 to January 2023, loans were made secured by counterfeit jewelry. Loan accounts quickly became non-performing assets (NPAs) due to non-payment by borrowers. The bank sent notifications to the loan holders to collect the unpaid balance in response to the circumstances. The loan holders received notice that if the installments were not deposited, their jewels would be put up for auction. When the loan holders ignored the notices, though, bank officials were taken aback.

In order to open the sealed packages containing the mortgaged valuables, a committee was established. The jewelry was reassessed and a video was completed. Reassessment revealed that the jewelry was, in fact, phony.

In March, the Reserve Bank of India had asked banks to share with it information on frauds reported in gold loans, actions taken by them to recover the money and defaults in the portfolio.

The RBI also asked banks to review their lending processes to check if they are in compliance with the regulator’s gold loan guidelines. The RBI sought this information after it found that employees of two state-run banks manipulated its system to meet gold loan targets.

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RBI Curbs On Kotak Mahindra Bank: Check which services will affect

 

RBI on April 24 barred Kotak Mahindra Bank (KMB) from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards, citing supervisory concerns over its technology platforms. The actions followed an RBI examination of the bank's IT systems over the last two years and the bank’s “continued failure” to address concerns, the central bank said.

The ban will not impact existing customers and Koak can continue to provide services to them, including its credit card customers, the RBI said.

The action will likely impact new customer acquisition of Kotak Mahindra Bank as a significant portion of new account openings happen through online and mobile banking channels. Also, the RBI action is bad news for KMB's credit card business as well. As per experts, the central bank's ban on issuing new credit cards could impact the bank’s co-branded credit card deals.

"These actions are necessitated based on significant concerns arising out of Reserve Bank’s IT Examination of the bank for the years 2022 and 2023 and the continued failure on part of the bank to address these concerns in a comprehensive and timely manner," RBI said.

According to the central bank, serious deficiencies and non-compliance were observed in the areas of IT inventory management, patch and change management, user access management, vendor risk management, data security and data leak prevention strategy, business continuity and disaster recovery rigour and drill, and so on.

Explaining the action, the RBI said for two consecutive years, the bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under regulatory guidelines.

What triggered the RBI action?

During subsequent assessments, Kotak Mahindra was found to be significantly non-compliant with the corrective action plans issued by the Reserve Bank for the years 2022 and 2023, as the compliances submitted by the bank were found to be either inadequate, incorrect or not sustained, the central bank said.

Back in 2020, the RBI had  announced a similar action against HDFC Bank when it asked the country's largest private sector lender to put all new digital launches on hold till the bank resolve  tech issues. HDFC Bank was barred from launching any new digital products or services and issuing new credit cards as a penalty for repeated instances of outages in its online platforms.

Later, in August 2021, the RBI partially revoked the ban on the bank allowing it to issue new credit cards. Later in March, 2022, the bank informed the exchanges that the RBI has lifted the restrictions that were placed on the fresh digital launches of HDFC Bank.

The RBI had cited similar technology-related concerns as in the case Kotak Mahindra Bank while taking action against HDFC Bank after repeated outages at the lender's data centre. The restrictions barred HDFC Bank from launching any of the activities planned under the Digital 2.0 programme as well as the sourcing of new credit cards.

The RBI had also asked the bank to fix accountability in the matter pertaining to the data centre outages, and examine reasons behind the lapses. Subsequently, an audit was carried out and the bank submitted a roadmap to the central bank.

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बैंक की पूर्व वरिष्ठ प्रबंधक को जेल:सात साल की कैद के साथ 15 करोड़ जुर्माना

 

An Ahmedabad CBI court on Thursday convicted a former Indian Overseas Bank (IOB) manager on graft and forgery charges and sentenced her to seven years’ imprisonment and imposed a penalty of Rs 15.06 crore.

The court of special CBI judge Digant Arunbhai Vora held the accused – Preeti Vijay Sahjwani – a former senior manager at IOB’s Vastrapur branch, had “undeniably indulged in white collar crime and economic and social crime”.

The judge has held Sahjwani guilty under Prevention of Corruption Act’s sections 13 (1) (c), 13(1)(d), 13 (2) and IPC sections 467, 471 (forgery) and 409 (criminal breach of trust by bankers).

Sahjwani, between 1998 and 2001, was accused of allegedly cheating IOB to the tune of Rs 2.14 crore by way of crediting final maturity payments of FCNR (foreign currency non-resident) deposits of two accounts into two fictitious accounts – one a cash credit account and another a savings account – without any authority letter from the depositor or from the power of attorney holder.

She had also sanctioned loans and cash credits in the name of five fake persons, amounting to approximately Rs 1.40 crore against the security of unsurrendered deposit receipts of actual depositors, by making alterations in the amount, date, maturity value, etc. It was alleged that Sahjwani had caused a wrongful loss of over Rs 2 crore, including interest, as on July 27, 2001.

An offence was registered in 2001 and chargesheet was filed in October 2003 for criminal breach of trust, forgery of valuable security using forged documents, and criminal misconduct. It was alleged that Sahjwani had misused her official position by indulging in the offences.

The special CBI court, while imposing a fine of Rs 15 crore, which is to be returned to the bank, observed that taking into account the loss caused to the bank (which would amount to present day value worth over Rs 84 crore as on date), and inflation, interests etc, the court has taken into account the accused’s economic condition. Notably, the accused herself is a law graduate.

“The perpetrators of white collar crime are not the lower class citizens of the society but the middle class professionals, higher officials etc. The victims of white collar crime are common people of the society and the nation. The main motive behind white collar crimes is always financial gain and individuals committing these types of crimes enrich themselves illegally.

 Wealth, luxurious life and financial stability motivate the guilty-minded persons to commit such crimes… Corruption crimes committed by public servants are more fatal to the society and the country than ordinary crimes because the consequences of white collar crime are far greater and far-reaching than ordinary crimes,” Judge Vora observed.

The judge said that the crimes of corruption undermine the morale and self-confidence of people while white collar criminals use their experience, position and well-educated mind in a planned manner and misuse the trust and confidence placed on them by the organisation.

Sanjhwani had been absconding during the probe and she was taken into custody only in 2012 after she was detained by Canadian immigration authorities and was deported to India in January 2012.

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BoB, PNB among 6 PSU banks with high NPAs

Non Performing asset (NPA) is a loan or advance for which the principal or interest payment has remained overdue for a period of 90 days or more. According to data from Trendlyne, SBI, Bank of Baroda, and PNB are among the 6 PSU banks that reported the highest NPAs in Q3 of FY24. Here's the list:

Bank of India(BoI)

The net NPA of Bank of India stood at 1.41% in Q3FY24, which is the highest among PSU Banks. The PE ratio of the stock is 9.66. Bank of India has a market cap of Rs 61,870 crore.

Union bank of India

Union Bank of India reported a net NPA of 1.08% in Q3FY24. The PE ratio of the stock is 7.74. The firm's market cap is at Rs 1,02,773 crore.

Punjab National Bank (PNB)

Punjab National Bank (PNB) reported a net NPA of 0.96% in Q3FY24. The PE ratio of the stock is at 17.76. Punjab National Bank's market cap is at Rs 1,35,490 crore.

Bank of Baroda(BoB)

The net NPA ratio of Bank of Baroda stood at 0.7% in the December quarter of FY24. The PE ratio of the stock is 7.3. It has a market cap of Rs 1,38,153 crore.

State Bank of India (SBI) 

The net NPA ratio of the State Bank of India (SBI) stood at 0.64% in Q3FY24. The PE ratio of the stock is 10.26. SBI has a market cap of Rs 6,65,731 crore.

Indian Overseas Bank(IOB)

Indian Overseas Bank reported a net NPA of 0.62% in the December quarter of FY24. The PE ratio of the stock is at 50.36, while its market cap is at Rs 1,26,457 crore.

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Police summons MDs of 4 Banks, 11 Bank Employees arrested

A number of bankers have been arrested in recent cyber fraud investigations due to allegations that they were involved in fraudulent operations. The managing directors of Yes Bank, ICICI Bank, RBL Bank, and Kotak Mahindra Bank are among the four private banks that the city police have written to, demonstrating how seriously they regard this issue. The letter's objective is to ask them to come in person the next week to provide an explanation for why no legal action should be taken against them.

Role of Bankers in Cyber Fraud Cases

When authorities discovered that the account holders implicated in illegal activities were unaware that they had opened such accounts, the role of bankers came under investigation. It was found that the bankers had helped cyber criminals open these accounts after more inquiry. The fact that the bankers charged a sizable commission in each instance suggests that they were aware that they were involved in illegal activity.

Victims of Fraudulent Investment and Task-based Schemes

Many people have been duped by schemes that promise large returns on investments or possibilities depending on tasks. In addition to apprehending the cyber criminals, the local police have shown initiative by making the bankers answerable for their involvement in these cyber fraud cases. As a result, the city police are the only law enforcement agency in the nation authorized to detain bankers in conjunction with other suspects in similar circumstances.

Read More - सबसे बड़ा बैंकिंग घोटाला: भारत देश में अब तक का सबसे बड़ा बैंक फ्रॉड, करोडो का बैंको को लगाया चुना

Exposing the Role of Bankers

During the investigation, it was discovered that the employees of Kotak Mahindra Bank’s MG Road branch were involved in fraudulent activities. They were subsequently arrested, and during the interrogation, they confessed to the involvement of several other bankers in similar fraudulent acts. Recognizing that bank accounts are a crucial component in cyber frauds, the police decided to investigate the criminal activities of bankers in such cases.

Violations of KYC Norms

In light of the recent arrests, the city police have written to the managing directors of Kotak Mahindra Bank, ICICI Bank, RBL Bank, and Yes Bank. The purpose of this letter is to request their personal appearance and an explanation as to why legal action should not be initiated against them for clear violations of the Reserve Bank of India’s (RBI) Know Your Customer (KYC) norms.

Bankers’ Methods and Tactics

During the ongoing investigations, the police have found that the bankers accused of aiding cyber criminals opened bank accounts using identification and address proofs collected from factory workers and laborers. They even gained access to the bank accounts of daily-wage workers by offering them money. Additionally, the police noticed the use of fake IDs, address proofs, and forged signatures to open bank accounts, further exposing the deceptive tactics used by these individuals.

Read More - Suspicious transactions detected in this bank,three staffs arrested

Bank Responsibilities and Accountability

The Deputy Commissioner of Police(Cyber Crime), Siddhant Jain, emphasized that bank managements have a responsibility to safeguard their clients’ money and protect it from cyber criminals. If bank employees are involved in criminal activities and aiding fraudsters, it is the duty of the bank managements to explain why action should not be taken against them. The police are determined to hold the responsible parties accountable for their actions in order to protect the public and maintain the integrity of the banking system.

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Top 10 Banks in India as per Market Cap

 

The banking sector plays a crucial role in the growth and development of any economy. In India, the banking sector has significantly evolved over the past decade, with a tech-savvy population and a booming economy. As of 2024, the top banks in India, based on market capitalization, are also among the top banks globally. HDFC Bank holds the position of the largest bank in India in terms of market capitalization. Let’s have a look at the Top 10 Banks in India as per Mcap.

Top 10 Banks in India as per Market Cap (as on 12.04.2024)

Rank	Rank	Market Cap (Rs Lakh Crore)
1	HDFC Bank	1,153,894.76
2	ICICI Bank	775,447.63
3	SBI	684,294.62
4	Kotak Mahindra	359,803.74
5	Axis Bank	330,873.03
6	Punjab National Bank	148,373.43
7	Bank of Baroda	138,514.94
8	Indian Overseas Bank	121,069.95
9	IndusInd Bank	120,639.59
10	Union Bank	113,855.23

Read More - Top 10 Largest Banks 2023

Read More - Best Banks in India 2023

Public Sector Banks Market Cap (as on 12.04.2024)

Bank Name	Market Cap (Rs. cr)
SBI	684,294.62
PNB	148,373.43
Bank of Baroda	138,514.94
IOB	121,069.95
Union Bank	113,855.23
Canara Bank	109,900.01
Indian Bank	70,917.65
UCO Bank	65,913.20
Bank of India	65,262.49
Central Bank	55,471.20
Bank of Mah	45,051.70
Punjab & Sind	41,080.16

Private Banks Market Cap (as on 12.04.2024)

Bank Name	Market Cap (Rs. cr)
HDFC Bank	1,153,894.76
ICICI Bank	775,447.63
Kotak Mahindra	359,803.74
Axis Bank	330,873.03
IndusInd Bank	120,639.59
IDBI Bank	93,384.61
Yes Bank	69,757.78
IDFC First Bank	59,634.81
AU Small Finance Bank	47,372.34
Federal Bank	37,985.11
Bandhan Bank	29,472.69
RBL Bank	15,647.74
Karur Vysya Bank	15,431.97
J&K Bank	15,157.78
City Union Bank	11,513.74
Equitas SFB	11,365.90
Ujjivan SFB	10,551.87
Karnataka Bank	8,774.83
Tamilnad Mercantile Bank	7,784.56
South Indian Bank	7,429.23
CSB Bank	6,671.40
Utkarsh SFB	5,827.12
Jana SFB	4,660.54
DCB Bank	3,860.45
ESAF SFB	3,142.73
Suryoday SFB	2,009.85
Capital SFB	1,614.55
Dhanlaxmi Bank	1,172.71

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