Current Affairs For Bank, IBPS Exams - 08 May, 2015
Current Affairs for BANK, IBPS Exams
07 May 2015
India sign a pact with Iran to develop Chabahar port
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India has signed an agreement with Iran for the development of the strategically important Chabahar port which will give India sea-land access route to Afghanistan bypassing Pakistan.
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The pact was signed after comprehensive talks between visiting Road Transport and Highways Minister Nitin Gadkari with the Iranian leadership here.
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The port will be developed through a special purpose vehicle (SPV) which will invest USD 85.21 million to convert the berths into a container terminal and a multi-purpose cargo terminal.
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The agreement was signed by Gadkari and Iran's Minister for Transport and Urban Development Dr Abbas Ahmad Akhoundi.
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Chabahar port is located in Sistan-Balochistan Province on Iran's southeastern coast and is of great strategic utility for India which will get sea-land access route to Afghanistan bypassing Pakistan.
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From Chahbahar port using the existing Iranian road network, a link up to Zaranj in Afghanistan and then using the Zaranj-Delaram road constructed by India in 2009, access to Afghanistan's Garland Highway can be made.
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This would establish road access to four of the major cities of Afghanistan -- Herat, Kandahar, Kabul and Mazar-e-Sharif.
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The port would cut transport costs and freight time for India to Central Asia and the Gulf by about a third.
RBI cancels license of Shri Swami Samarth Urban Co-operative Bank
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The Reserve Bank of India (RBI) has cancelled the licence of Shri Swami Samarth Urban Co-operative Bank Ltd., Naldurg, Osmanabad. The order was made effective from the close of business on April 30, 2015.
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The Reserve Bank cancelled the licence of the bank as:
• The financial position was precarious and there was no scope for its revival.
• The bank did not comply with the provisions of Section 11(1), 22(3)(a) of the Banking Regulation Act, 1949 (AACS).
• The bank was not in a position to pay its present and future depositors in full, as and when their claims accrue.
• The affairs of the bank were being conducted in a manner detrimental to the interest of its present and future depositors.
• Public interest would have been adversely affected if the bank was allowed to carry on its banking business any further. -
Consequent to the cancellation of its licence, Shri Swami Samarth Urban Co-operative Bank Ltd., Naldurg, Osmanabad, is prohibited from conducting the business of ‘banking’ as defined in Section 5(b) of the Banking Regulation Act, 1949 (AACS) with immediate effect.
RBI direction on fraud in accounts
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The Reserve Bank of India (RBI) on 7th May has issued a notification directed Banks to ‘red-flag’ any suspicious activity in this regard. According to RBI, Banks have to make full provisioning of the amount at stake when a fraud is detected, though if there is no delay in reporting it, they may amortise this over four quarters. They are also to immediately report this to the Central Repository of Information on Large Credits.
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The notification further said that banks have to develop an early-warning system for any accounts over Rs 50 crore. “The concept of a red-flagged account (RFA) is being introduced in the current framework as an important step in fraud risk control. An RFA is one where a suspicion of fraudulent activity is thrown up by the presence of one or more early warning signals (EWS). Some of these signs, said the regulator, were bouncing of high-value cheques, a raid by tax officials, a dispute on title of collateral securities or funds coming from other banks to liquidate a loan due, among others.
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At present, banks tend to report an account as fraud only when they exhaust chances of further recovery. A delay in reporting also delays the alerting of other banks. Also, banks have been asked to initiate and complete a staff accountability exercise within six months from the date of classification as a fraud. They're required to register a complaint with law enforcement agencies immediately on detection of fraud.
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If an account is so identified, the penal provisions as applicable to wilful defaulters would apply to the fraudulent borrower. That is, the promoter directors and other wholetime directors are to be barred from raising funds, from banks or from the capital markets.
RBI allows ARCs long resolution period beyond eight years
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The Reserve Bank of India allowed asset reconstruction companies (ARCs) to extend the time period to realise stressed assets beyond eight years if a lenders' grouping is taking more than the specified period, subject to some conditions.
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The time for redeeming security receipts (SRs) held against assets might be extended in congruence with the resolution period approved by joint lenders forum and a corporate debt restructuring (CDR. At present, ARCs get up to eight years for resolution of stressed assets.
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However, in most cases, the repayment period goes beyond eight years. In such cases, ARCs holding part of stressed assets, had expressed their inability to go along with other lenders beyond eight years due to regulatory constraints. They insisted on an exit at the end of five or eight years, jeopardising the restructuring efforts of a majority of lenders.
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The RBI has kept in mind these constraints while modifying the directions. Hari Hara Mishra, president and chief operating officer of UV Asset Reconstruction Ltd, said ARCs association had made a representation to regulator for modification.
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Now, with the amendments, ARCs will be able to play an effective role in resolution of stressed cases. There were some CDR accounts, where ARCs could not play an active role due to regulatory constraints, he added.
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Though on the whole, the banking system has remained resilient, asset quality has seen sustained pressure due to continued economic slowdown. The levels of gross non-performing advances (GNPAs) for the system have been elevated.
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Stressed Assets Ratio (Gross NPA+ Restructured Standard Advances to Gross Advances) for the system as a whole stood at 10.9 per cent as at the end of March 2015, according to RBI data.
Nirmal Ganga Sahbhagita Programme
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The Government has launched ‘Nirmal Ganga Sahbhagita’ a sustainable initiative with Urban Local Bodies (ULBs) located on the banks of the river Ganga for achieving the objective of Clean Ganga.
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The initiative aims at sensitizing the ULBs about the pollution in river Ganga arising primarily due to dumping of solid waste in the river/nallas and to involve them in a long term engagement in stoppage of the solid waste flow from nallas/drains to the river. Apart from this ULBs can perform certain activities for achieving the shared objective of rejuvenating the river Ganga. National Mission for Clean Ganga (NMCG) intends to enter in to a Memorandum of Understanding (MoU) with the ULBs for effective and fruitful engagement in this regard.
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The draft MoU is being prepared and the broad objective of the partnership is to involve the ULBs in the areas of solid waste management, installation and maintenance of clarifiers/screens in the nallas/drains to support primary treatment of waste water, maintaining ‘litter free zones’, 500m along the river basin; engaging volunteer force and youth in ghat cleaning & monitoring and conducting public outreach activities.
Union Government appoints Achal Kumar Jyoti as EC
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Union Government has appointed former Chief Secretary of Gujarat Achal Kumar Jyoti as Election Commissioner, one of the two vacancies in the three-member body.
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Mr. Jyoti retired from active service in January 2013 after serving in various capacities in Gujarat, including as Chairman of the Kandla Port Trust between 1999 and 2004 and Managing Director of the Sardar Sarovar Narmada Nigam Ltd.
