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Banking, India

Withdrawal of Minimum Balance Penalty by Banks: Government stand and RBI guidelines

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New Delhi: According to Reserve Bank of India (RBI) guidelines, banks do not have any Minimum Balance requirement for Basic Savings Bank Deposit accounts (BSBD), including accounts opened under Pradhan Mantri Jan DhanYojana (PMJDY). As on March 2019, there were 57.3 crore BSBD accounts across the country including 35.27 crore (61.6%) Jan-Dhan accounts. Hence, for these accounts there are no charges for not maintaining minimum balance. BSBD accounts are considered normal banking services available to all and it offers certain basic minimum facilities free of charge.

For accounts other than BSBD accounts, as per RBI’s Master Circular on “Customer Service in Banks” dated July 1, 2015, banks are permitted to fix service charges on various services rendered by them, as per their Board approved policy, while ensuring that the charges are reasonable and not out of line with the average cost of providing these services. Further, banks have been advised to identify basic services and the principles to be adopted/ followed by them for ensuring reasonableness in fixing such charges. Banks are also advised to take steps to ensure that customers are made aware of the service charges upfront and changes in the service charges are implemented only with the prior notice to the customers.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha on Tuesday, 16 July 2019.

Banking, Corruption

Fictitious transaction of sale of property in Delhi: Banks and financial institutions cheated

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New Delhi: Delhi Police have registered a case of serious economic offences against few persons accused of have dishonestly and fraudulently, in conspiracy with each other and some other unknown persons have cheated multiple banks and financial institutions, including Aditya Birla Housing Finance Limited  (ABHFL),  Syndicate Bank, Canara Bank, Axis Bank, Indian Bank, and Standard Chartered Bank of crores of rupees by inducing these banks and financial institutions to sanction and disburse loan amounts against fictitious transaction of sale of property (No. 132, Third Floor, Chitra Vihar, New Delhi 110092).

The complainant in this matter, Tarun Sharma, is the authorised representative of ABHFL, having its registered office at Indian Rayon Compound, Verawal Gujarat- 362266 and its branch office in Delhi at 2nd Floor. UCO Bank Building, 5, Parliament Street.

As per the FIR registered by the Parliament Street Police Station, New Delhi on 3 May 2019, a fictitious transaction of sale of freehold built -up residential property, built on third floor with roof rights of property bearing no. 132. Chitra Vihar, New Delhi, was created by Manoj Monga, Anshu Monga and Sandeep Goswami along with other unknown persons who pretended that Manoj Monga was genuinely purchasing this Property at a sale consideration of Rs. 10 million from Sandeep Goswami and for purchase of this Property, financial assistance was required by Manoj Monga, Anshu Monga and County Apparels from ABHFL.

Taking the “fictitious transaction” for sale of the Property and the intention of Manoj Monga and Anshu Monga to mortgage it as true, ABHFL disbursed a loan to the tune of Rs. 15 million in The following manner:

  • Rs. 9.9 million, vide cheque No. 281447 dated 31 May2018 drawn on ICICI Bank Limited (Account number 071401505310), in favour of Sandeep Goswami/Seller directly on behalf of Manoj Monga, Anshu Monga and County Apparels.
  • The remaining balance amount was disbursed vide cheque No. 281446 dated 31 May 2018 drawn on Union Bank of India (4937020100072) in favour of the Manoj Monga as per the terms and conditions of the sanction letter and loan agreement dated 29 May 2018.

Thereafter, a Sale Deed for this property was executed on 4 June 2018 by Sandeep Goswami (Seller) in favour of Monga for a total sale consideration of Rs. 10 million and it was also registered with Sub-registrar. District Preet Vihar, Delhi vide registration No. 3,319 in Book No.1, Volume No. 1,308 on page 84 to 92 on 05 June 2018.

Thereafter Manoj Monga and Anshu Monga created equitable mortgage on this Property, as security for the said Loan, in favour of ABHFL by deposit of original sale deed. Initially some payments were made by Manoj Monga and Anshu Monga towards repayment of the loan to show that the transaction was a genuine transaction but later on they stopped making payments to ABHFL against loan.

Through collection activity and upon inquiry it was brought to the ABHFL’s knowledge that the said Property was also mortgaged with multiple banks and financial institutions by Manoj Monga, Anshu Monga and Sandeep Goswami along with other unknown persons by creating a fictitious transaction of sale of the said Property on the basis of which they availed loan facility from multiple Banks and Financial Institutions including Syndicate Bank, Canara Bank, Axis Bank, Indian Bank, Standard Chartered Bank thereby cheating these banks and financial institutions to the extent of millions of rupees.

It is alleged that part loan amount that was disbursed into the account of Sandeep Goswami on behalf of Manoj Monga, Anshu Monga and County Apparels as sale consideration was shared with Manoj Monga, Anshu Monga and Sandeep Goswami.

After preliminary enquiry into the complaint, the Parliament Street Police Station in Delhi has registered an FIR in this case under Section 420/468/120-B of Indian Penal Code against the accused.

Banking, Corruption

Banks provide vital information about post-demonetization transactions of 5800 suspicious companies

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New Delhi: Vital information has been received by the Government of India from 13 banks regarding the bank account operations and post-demonetization transactions of some of the 2,09,032 suspicious companies that had been struck off the Register of Companies earlier this year.

Investigative agencies have been asked to complete necessary investigation regarding these transactions in a time bound manner.

After being struck off the Register of Companies, operation of the bank accounts of these 2,09,032 suspicious companies were restricted for discharge of their liabilities only.

The First Instalment of data has been submitted by 13 banks and more is to follow. The data received from the banks pertains to merely about 5,800 companies (out of more than 200,000 that were struck off) involving 13,140 accounts. Few of the companies have been operating more than 100 accounts in their names. Among these is a company having 2134 accounts, followed by others having accounts in the range of 300 to 900.

The data pertaining to the pre demonetization account balances and transactions conducted from the accounts of these companies during the demonetization period is even more startling.

It is learnt that, after separating the loan accounts, these companies were having a meagre balance of Rs 22.05 crore to their credit on 8 November, 2016. But from 9 November, 2016 i.e. after the announcement of demonetization, till the date of their being struck off, these companies have altogether deposited a huge amount of Rs. 4,573.87 crore in their accounts and withdrawn an equally large amount of Rs 4,552 crore. With loan accounts, there was a negative opening balance of Rs 80.79 crore.

Companies having multiple accounts with miniscule or negative balance on 8 November, 2016 have deposited and withdrawn amounts running into several crore from these accounts. The accounts were thereafter again left as dormant accounts with paltry balance. As mentioned earlier, this exercise of swindling the authorities was carried-out post demonetization till the companies were struck off. In some cases, certain companies have even made deposits and withdrawals after being struck off.

For example, in one of the Banks, 429 companies having zero balance each as on 8 November, 2016 have deposited and withdrawn over Rs 11 crore and left again with a cumulative balance of just Rs 42,000 on the date of freezing.

Similarly in the case of another Bank, more than 3000 such companies, most having multiple accounts, have been located. From having a cumulative balance of about Rs. 13 crore as on 8 November, 2016, these companies have deposited and withdrawn about Rs 3800 crore, leaving a negative cumulative balance of almost Rs 200 crore at the time of freezing of their accounts.

It needs to be re-emphasized that this data is only about 2.5% of the total number of suspected companies that have been struck off by the Government. The huge money game played by these companies may well be the tip of an iceberg of corruption and black money.