Wednesday, August 22, 2012

Indian Banks Allowed to Operate in Pakistan

Government of India is going to commit another blunder by allowing certain banks to operate in Pakistan. They should understand that these banks have failed to comply KYC norms in domestic branches of banks, monitor their books properly, have failed to keep their assets in good condition and failed to keep their man power happy and devoted performer. In any organization where number of corrupt minded persons are in huge number and where corrupt persons are more effective and powerful , one cannot imagine of compliance of statutory , legal , social and financial discipline honestly.

Any foul game and all types of conspiracy can be executed to disturb India just by paying some money or offering some wine and wealth to an official working in any office. Department of Customs, ED, Border officials and all are clouded with persons of doubtful integrity and this is why pilferage are taking place , illegal crossing of borders, arms are being illegally imported unabated in India since long   and what not.

Even foreign banks operating in Indian land and which have outsourced their business in India are now under scanner because of large scale money laundering and help to drug smugglers and terror groups. Now if these banks are allowed to operate from a world famous terror center Pakistan, one may imagine the disaster likely to grip already sick banks and sick economy of the country.

I hope the ruling party or opposition parties who claim to be guards and patriots for the country should reconsider their decisions of allowing Indian banks to operate in Pakistan. Everyone knows that bus services and train services started between India and Pakistan are being utilized by foreign based terror groups to export terror to India.

It is open secret that conspirators and enemies of India are bent upon disturbing India from all angles, financials, and social and now through internet too. And terrorists get success in execution of all their bad intended plans. By SMS and using fake website they created panic during last week. Nothing is in control of India. It is painful that they first allow miscreants to enter into India, mix with Indians and completely execute their mischievous task and then Indian government cries for dialogue.

Please for God sake do not add fuel to fire. Please do not play with fire. Enough is enough. Please do not make experiment after experiment with Pakistan and endanger the unity and integrity of the country. Naxal, Maoists and other extremist groups are in good number in India and are already working as agents of foreign based terror groups to disturb peace in India and now they will have financial help through Indian banks operating from Pakistan and vice versa.

RBI and Government of India have been crying and impressing upon bankers to open accounts only after strictly compliance of provisions of  Know Your Customers  called as KYC norms and anti money laundering act but state run banks in general  have failed to ensure hundred percent compliance of laws in this regards and the bitter truth and ground reality tells that compliance has been less than 20 percent till date .

Despite all threatening to banks working in India, government banks have failed to ensure 100 percent KYC compliance, how can they be expected to ensure the same in Pakistan where all works are possible after application of intimidation and coercive tactics and where role of wealth, wine and woman is predominant in every sphere of life.

At least past record of Indian politicians and administrators says that they could never get succeeding Pakistan government to provide safety to Indians working in Pakistan.I hope GOI will take lessons from Past events.

Further it is more astonishing that the permission has been given to top ranked those two banks which have broken all past records of bad assets. SBI earned profit in past years by short provisioning on staff terminal benefits and for bad assets. It is pertinent to mention here that SBI Chairman Mr. Pratik Choudhury has been begging since long release of interest free CRR fund or for payment of interest on fund parked with RBI in compliance of CRR fixed by RBI to increase profitability of the bank. It is simply because he has understood the bitter truth of his bank, he better knows the voluminous bad assets hidden in the system and still considered as standard assets either by tampering with system or by restructuring or by ever greening of loan processes .

I would further like to add here that lacs of crores of rupees out of government fund central or state meant for various developmental projects have been parked mostly in branches of SBI. If state and central government demands at least 10 percent interest on deposits i.e. equal to rate their base rate fixed for lending ,made by the government in these banks, there is no doubt to me that their entire profit will vanish and most of the banks will book huge loss. There is no doubt that the crisis which will erupt after demands of interest by state and central government on the fund kept in SBI as interest free deposit  will be more dangerous and disastrous than the crisis which had engulfed many banks in USA and UK in the year 2008.

State Bank of India, Bank of India allowed to operate in Pakistan

SINGAPORE: India and Pakistan have agreed to allow two banks each from both the countries to set up branches across the border, Governor of the State Bank of Pakistan, Yaseen Anwar said today.

"We have held discussions with the Reserve Bank of India and both sides have agreed to issue a full banking licence to two banks of each country," Anwar told on the sidelines of a conference organised by Institute of South Asian Studies.

The two Indian banks that will be allowed to operate in Pakistan are State Bank of India (SBI) and Bank of India ( BoI).

On the other hand, quasi-state owned National Bank of Pakistan and privately-owned United Bank Ltd. will be running full-banking operations across the border, once licensed by India.

"It will take few months to approve Indian banks' licences on receiving them," he said.

"We are ready to go tomorrow to India" to set up banking operations, Anwar said.

Discussions have been held with RBI Governor D Subbarao to issue banking licences, he said, adding that the process will help normalise trade relations between India and Pakistan.

Meanwhile, officials from the Bank of India in Singapore have recently visited Karachi for setting up an office in Pakistan, said Syed Hasan Javed, Pakistan High Commissioner to Singapore.

After HSBC, Standard Chartered India under US scanner
PTI | Aug 7, 2012, 06.37PM IST
NEW YORK/LONDON/MUMBAI: Outsourcing of key oversight jobs by global banks to India has come under the scanner for the second time in less than a month for exposing the US financial system to terrorists and money launderingrisks. 

On the heels of a probe by the US Senate's Permanent Committee on Investigations pointing out major lapses in the work of HSBC's India staff, another UK-based banking giant Standard Chartered's outsourcing of key banking jobs to Indian shores have come under the scanner in the US. 

A probe by the New York State's key banking regulator, the Department of Financial Services (DFS), has found deficient money laundering controls in outsourcing of work by StanChart to India, thus exposing the US financial system to terror financing and other risks.

The findings in these two separate probes have come at a time when the voices against outsourcing of jobs to India and other locations are gaining momentum in the US, ahead of the Presidential elections in November.

In an order last night, the DFS accused StanChart of hiding secret transactions involving USD 250 billion with Iran -- leaving the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes. 

The DFS probe found that SCB had assured the New York state in May 2010 that it would take immediate steps to comply with the US Office of Foreign Assets Control (OFAC) sanctions. However, another regulatory examination in 2011 found continuing and significant Anti Money Laundering failures. 

Among these, the bank was outsourcing its "entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices." 

The OFAC is the designated US government agency for preparing list of entities with whom US citizens and entities are barred from doing any business. 

Standard Chartered slumps 20% in India 

The Standard Chartered Bank stock today plunged by up to 24 per cent in the Indian and UK markets, as the New York state in the US threatened to revoke its licence and charged it of USD 250 billion worth secret transactions with Iran. 

At the Bombay Stock Exchange, the scrip fell 19.97 per cent to hit its lowest permissible limit for the day at Rs 83.15. On the NSE, the scrip was down 19.97 per cent at Rs 82.95. 

At the London Stock Exchange, Standard Chartered shares plunged 23.9 per cent to 1,119 pence in morning trade. 

The New York state has threatened to revoke the bank's licence after charging the UK-based global banking giant of operating as a "rogue institution" and hiding over 60,000 transactions worth USD 250 billion with Iran. 

While the bank has refuted the charges saying that more than 99.9 per cent of its Iran-related transactions complied with the US regulations, the New York State Department of Financial Services (DFS) has charged StanChart of exposing the US financial systems to terrorists, drug kingpins and weapon dealers through its transactions with Iran for about 10 years. 
In a 27-page order, the Superintendent of Financial Services Benjamin Lawsky of DFS said that "grounds exist for revocation of Standard Chartered Bank's licence to operate in the State of New York and that interim measures must be taken to protect the public interest." 

The order accused Standard Chartered of operating as a "rogue institution" which was "motivated by greed." 

Reacting to the regulator's order, Standard Chartered said it "strongly rejects" the position and portrayal of facts made by DFS.

PSU banks to review performance of foreign branches quarterly: Government

PTI Aug 8, 2012, 04.40PM IST
New Delhi: Public sector banks have been asked to review the performance of overseas branches on a quarterly basis to ensure profitable functioning, Parliament was informed today.
"The Government has advised the PSBs operating their branches at Overseas Centres to strengthen the mechanism for evaluation of performance of overseas offices in order to achieve the optimum utilisation do capital in their offices," Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.
"These banks have also been advised to review the performance of their overseas offices on some select performance parameters on a quarterly basis," he added.
Meena said that while in the financial year 2011-12, no PSBs functioning abroad reported losses, at the end of March 2012, eight overseas branches of three PSBs have posted loss.
Replying to a query, Meena said that the RBI has recommended proposals of three foreign banks for opening a branch each in India.
As on August 1, 2012, the minister said, 41 foreign banks were operating 324 branches in India.

1 comment:

  1. This fear of Pakistan is very dangerous. Banks are companies that deal with money. They would be in a losing business if they do not keep proper accounts. From my personal experience, I can say that Indian Banks are more conservative than most western banks. Dealing in Pakistan means larger business for Indian banks. City bank and American Express have been operating in India for better part of a century. Indians should not be concerned about operating in Karachi or Lahor.