Foreign branches of other Indian banks may be involved in Nirav fraud: PNB

Feb 15, 2018 0

By Quaid Najmi

Mumbai– The Punjab National Bank (PNB) has charged that foreign branches of other Indian banks may also be involved in what has turned out to be the biggest fraud in the country’s banking sector involving diamond trader Nirav Modi.

“There is clear criminal connivance of the group companies of Nirav Modi and Gitanjali Gems with our branch official and also, apparently, with officials of overseas branches of Indian banks,” the PNB said in a detailed note sent to 30 Indian nationalized banks, a private bank and a foreign bank.

A copy of the note is available with IANS.

The PNB virtually accused other banks’ foreign branches of not sharing with it information or documents made available to them by these Indian companies at the time of availing buyers’ credit from them.

“The Buyers’ Credit availed against fraudulent LoU (Letter of Undertaking) was used either to retire import bills or replenish the maturing Buyer’s Credit of some other banks,” the PNB said.

At the same time, the PNB has admitted to the involvement of one of its retired employees and officials of other Indian banks in the modus operandi adopted by diamond companies to dupe them.

The PNB note said “the suspected fraud had been carried out by the perpetrators in collusion with the staff” at its Brady House Branch in Fort in south Mumbai.

The note, dated February 12, was addressed to the Chairmen, Managing Directors and Chief Executive Officers of these banks, signed by the PNB General Manager, International Banking Division, New Delhi.

The PNB said that on examination of SWIFT (international payment network) trail, it was found that a junior level branch official had unauthorizedly and fraudulently issued Letters of Undertakings (LoUs) on behalf of some companies belonging to billionaire diamond trader Nirav Modi to avail buyers’ credit from from foreign branches of various Indian banks.

The companies were: Solar Exports, Stellar Diamonds and Diamond R Us, which only had Current Accounts and did not enjoy the privilege of any fund/non-fund based limits with the branch.

“None of the transactions were routed through the CBS System, thus avoiding early detection of fraudulent activity,” the PNB’s mail said. CBS is the core banking solution system which tracks all transactions.

Worse, the PNB said, the same modus operandi was used by the unidentified PNB official in other diamond majors like Gitanjali Gems Pvt. Ltd, belonging to Nirav Modi’s maternal uncle Mehul Choksi, Gitanjali Gems, Gili India and Nakshatra, for issuing similar LoUs and Foreign Letter of Credit (FLCs).

However, these companies enjoyed credit facilities under the fund-based/non-fund based schemes of PNB.

In the case of FLCs, the bank’s preliminary investigations made the stunning revelation that while issuing FLCs of smaller amounts by SWIFT, the transaction was routed through the CBS but “subsequently, amendments were made in these FLCs by substantially enhancing the amount of FLC and transmitted through SWIFT, without routing these enhancements through CBS,” said the PNB letter.

Later, the official would convey via SWIFT the acceptance of bills for the full amount of the FLC to the overseas negotiating branch, said the PNB, clearly hinting at a possible major exposure of other banks in the fraud.

Further probe revealed that LoU’s were opened in favour of foreign branches of Indian banks for imports of pearls for a period of one year although the Reserve Bank of India (RBI) guidelines stipulate a total period of 90 days from the date of shipment.

“This stipulation was overlooked by the overseas branches of Indian banks, who are also required to follow RBI guidelines,” the PNB note stated.

The entire fraud came to light only after the retirement of the unidentified official and when the companies again approached the Brady House Bank for availing similar LoUs.

When the current PNB officials demanded a 110 percent margin because they were not sanctioned any FB/NFB limits, the companies informed the branch that they had been undertaking such transactions for several years! (IANS)

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India’s exports fall in January, so do imports

Feb 15, 2018 0

New Delhi– India’s exports plunged by 9.80 per cent to $24.38 billion in January, from $27.03 billion worth of merchandise shipped out in December 2017, official data showed on Thursday.

However, on a year-on-year (Y-o-Y) basis, the exports for January grew by 9.07 per cent to $24.38 billion from $22.35 billion reported for the corresponding month of last year.

“Exports during January 2018 have exhibited positive growth of 9.07 per cent in dollar terms vis-a-vis January 2017. Exports have been on a positive trajectory since August 2016 to January 2018 with a dip of 1.1 per cent in the month of October 2017,” the Commerce Ministry said in a statement.

Exports during January 2018 were valued at $24,383.97 million as compared to $22,356.32 million during January 2017.

The data pointed out that healthy growth in exports was led by “Engineering Goods (15.77 per cent), Petroleum Products (39.5), Gems and Jewellery (0.89), Organic and Inorganic Chemicals (33.6), and Drugs and Pharmaceuticals (8.6)”.

“Non-petroleum and non-gems and jewellery exports in January 2018 were valued at $17,523.24 million as against $16,607.36 million in January 2017, an increase of 5.51 per cent,” the ministry said.

As per the data, country’s imports during the month under review declined by 2.93 per cent to $40.68 billion in January 2018 from $41.91 billion in December 2017.

But on a YoY basis, it increased by 26.10 per cent to $40.68 billion from $32.26 billion reported for the corresponding period of the previous year.

Segment-wise, the data showed that India’s oil imports during January shot up by 42.64 per cent to $11.65 billion, from $8.17 billion in the same month last year.

Non-oil imports during last month stood at $29.02 billion with a growth of 20.49 per cent over $24.08 billion in January 2017.

Consequently, India’s merchandise trade deficit on a YoY basis widened to $16.29 billion during last month as against $9.90 billion in the corresponding period the previous year.

“The marginal growth in exports of gems and jewellery and contraction in sectors such as textiles, yarn and iron ore dampened the expansion of merchandise exports to a three month low in January 2018,” said Aditi Nayar, Principal Economist, ICRA.

“Imports recorded a broad based surge with the exception of a few items such as gold, pulses and project goods. The dip in gold imports was more than offset by higher imports of silver, pearls, precious and semi precious stones.” (IANS)

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With 53% market share, Chinese vendors eclipse Indian smartphone players

Feb 14, 2018 0

New Delhi– Despite the government’s continuous push to help domestic smartphone manufacturers, China-based vendors are thriving and their collective market share has reached a massive 53 per cent in 2017 from 34 percent a year ago, International Data Corporation (IDC) has said.

“The untapped demand in the lower-tier cities remains the key attraction for China-based brands to explore the growth trajectory in India,” said Jaipal Singh, Senior Market Analyst, IDC India.

Their strength in their home market of China and weakening position of local players has helped some of these China-based players to solidify their operations in India,” he added.

Finance Minister Arun Jaitley in the Union Budget announced a hike in customs duty on mobile phones to 20 per cent from 15 per cent.

“Customs duty on import of mobile phone parts will be increased to 20 per cent from the existing 15 per cent. This will boost jobs in the smartphone sector in India,” Jaitley said during his speech.

According to the IDC’s “Quarterly Mobile Phone Tracker”, the Indian smartphone market witnessed a healthy 14 per cent annual growth with a total shipment of 124 million units in 2017 — making it the fastest growing market amongst the top 20 smartphone markets globally.

The market resumed its double-digit growth after a temporary slowdown in 2016 caused by factors such as demonetisation and a shortage of smartphone components.

This contrasts with China, the world’s largest smartphone market that saw its first decline this year, while the US was relatively flat.

When it comes to feature phones, 2017 was an exceptional year for this category as it witnessed a 17 per cent annual growth after declining for three consecutive years.

While feature phones remain relevant to a large consumer base in India, the Indian telecom operator Reliance Jio shipped huge shipments of 4G enabled feature phones taking the leadership position in its maiden quarter in this category, IDC said.

This resulted in a total of 164 million feature phone shipments in 2017 from 140 million a year ago.

“Xiaomi taking a lead over Samsung in the smartphone market and Reliance Jio emerging as the leading feature phone company in India were the two key highlights of the last quarter of 2017,” said Upasana Joshi, Senior Market Analyst, IDC India.(IANS)

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Punjab National Bank detects $1.8 bn fraud at a Mumbai branch

Feb 14, 2018 0

Mumbai– Punjab National Bank, the second largest public sector bank in India, has detected a $1.8 billion fraud in one of its branches here, the bank said in a regulatory filing to the stock exchanges on Wednesday.

“The bank has detected some fraudulent and unauthorised transactions (messages) in one of its branch in Mumbai for the benefit of a few select account holders with their apparent connivance,” the filing by the bank said.

It had quoted the quantum of such transactions was to the tune of around $1,771.69 million (around Rs 11,515 crore).

The amount of fraudulent transactions is equivalent to eight times the bank’s net income of about Rs 1,320 crore ($206 million).

This case has happened at a time when the Indian banking system is already grappling to tackle its swelling non-performing assets.

“Based on these transactions other banks appear to have advanced money to these customers abroad. In the bank these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions,” the filing said.

The bank informed: “The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land.”

On February 5, the Central Bureau of Investigation had booked billionaire diamond service provider Nirav Modi, his brother, wife and an enterprise companion for allegedly cheating Punjab National Bank of over Rs 280.70 crore last year.

Following the complaint, the CBI registered a FIR under the Indian Penal Code sections related to criminal conspiracy, cheating and provisions of the Prevention of Corruption Act against the four.

The stock of Punjab National Bank was trading at Rs 149.20 per share, down 7.70 per cent at the BSE at 1.59 p.m. (IANS)

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India’s excess power capacity an aberration, should export: Minister

Feb 13, 2018 0

New Delhi– The excess power capacity in India is an aberration in a situation where large parts of the country are yet to get electricity, Power Minister R.K Singh said on Tuesday.

Adressing the Indian Power Stations conference here, he also said that India can explore export of power to neighbouring countries such as Sri Lanka, Myanmar, Nepal and Bangladesh, which were viable markets for export of power as the per unit cost of electricity was very high in these areas.

“If you look at the entire power sector, the demand has been suppressed because not everyone is connected.

“We have just started taking-off and are going to enter double digit growth. What we see as excess capacity today may not turn out to be enough if we unlock that demand,” he said.

The minister also said the rise in power demand will lead to an increase in demand for coal, for which India needs to be prepared.

“The unlocking of demand will come but with some constraints. We don’t have a shortage of coal but we need to put in place mechanisms to get coal from underground to over ground and then to the power stations,” he said.

The Minister said that state-run generator NTPC, earlier known as National Thermal Power Corp, must aim to become the biggest power producer globally.

“Globally, NTPC is currently ranked 12th in terms of power generation. But in my view, NTPC hasn’t reached its limit.

“Why can’t NTPC set up power plants in other nations and why can’t the company emerge as our multinational? Why can’t NTPC become world’s largest power generator,” he asked.

In this connection, Singh said that neighbouring countries such as Sri Lanka, Myanmar, Nepal and Bangladesh were viable markets for power and the government is looking at sending teams to these countries to assess the demand. (IANS)

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PFRDA crosses 2 cr subscribers, expects them to grow 28% next year

Feb 13, 2018 0

Kolkata– The Pension Fund Regulatory and Development Authority (PFRDA), which achieved a two crore subscribers’ base on Monday, is looking at a 28 per cent growth in subscriber base in the next year, an official said here on Tuesday.

The PFRDA also expects that its asset under management (AUM) would grow by 45-47 per cent in the next year.

“Our subscriber base is growing by 27-28 per cent a year. Yesterday (Monday), we have touched two crore subscribers’ mark. In the last March, there were about 1.54 crore subscribers. Going forward, we expect same pace of growth to continue in the next year,” PFRDA’s Chairman Hemant G. Contractor told reporters here.

He said: “The corpus is currently at Rs 2.25 lakh crore. The asset under management has been growing by about 45 per cent annually in the last three years and in the last year, the growth was 47 per cent. Next year, we expect similar trend to continue i.e. 45-47 per cent growth.”

He, however, said the proposal of long term capital gains tax will not have much impact on it.

“It does not have much impact on us. The investments in National Pension System are made by our trust (NPS Trust) which is a tax exempted body. As far as pension investments are concerned, LTCG will not have impact,” he said.

However, Contractor said it has two types of accounts — tier I and tier II.

“Tier II has no tax benefits. Tier II account would be impacted but investments in tier II are much smaller,” he said.

Tier-I account is “the non-withdrawable” permanent retirement account into which the accumulations are deposited and invested as per the option of the subscriber.

Tier-II account is a “voluntary withdrawable” account which is allowed only when there is an active tier I account in the name of the subscriber. The withdrawals are permitted from this account as per the needs of the subscriber as and when claimed.

Responding to a query on how volatility in the equity market impacts it, he said that volatility was higher in the equity markets and its portfolio in equity was only about 15 per cent.

The PFRDA would be “less impacted with volatility in equity markets”, he said.

Speaking on the Atal Pension Yojana, he said the pension fund body has the target of reaching one crore subscribers under the Yojana by March 31.

“We are currently at about 88 lakh subscribers and we are trying hard in the remaining days of the year to touch the target. Next year, we will try for another 50 lakhs,” he said, adding that the corpus for the Atal Pension Yojana was around Rs 4,000 crore.

He also said the PFRDA brought changes in terms of partial withdrawal.

“Earlier, there was a restriction that a person had to be in the system for 10 years before he or she could avail this facility of partial withdrawal. Now, we have reduced it from 10 years to three years. After three years, subscribers can avail partial withdrawal. Up to 25 per cent of a subscriber’s own outstanding contribution will be allowed to be partially withdrawn after three years,” he added. (IANS)


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Foodpanda India to invest Rs 400 cr to boost delivery network

Feb 12, 2018 0

New Delhi– Food ordering and delivery chain Foodpanda India on Monday said it would invest Rs 400 crore to strengthen its network and hire 25,000 delivery riders in the next 12 to 15 months.

According to a company statement here, the investment would focus on scaling up technology and a dense logistics network which would ensure better services for customers.

“Creating a strong delivery ecosystem backed by technology is one of the most fundamental needs of the Indian food tech industry. We at Foodpanda recognise this and are investing Rs 400 crore to further strengthen our delivery network across all the metros and other key cities,” said Pranay Jivrajka, CEO, Foodpanda India.

“We are also ramping up our last mile connect by hiring 25,000 delivery riders. This is in line with our go to market strategy to make a difference in the food ordering experience of our restaurant partners, customers and riders,” he added.

In December 2017, Ola acquired Foodpanda with a commitment to infuse Rs 1,300 crore ($200 million) from parent company ANI Technologies. (IANS)

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Global indices, stock-specific buying lift Indian equities

Feb 12, 2018 0

Mumbai– Positive global indices, coupled with healthy buying in capital goods, auto, banking, healthcare and metal stocks, lifted the key Indian equity indices on Monday.

Market observers said investors awaited the retail and industrial inflation data due to be announced in the evening which is expected to give direction to the central bank’s next course of action on raising interest rates.

The wider Nifty50 of the National Stock Exchange held the 10,500-mark and closed higher by 84.80 points or 0.81 per cent at 10,539.75 points.

On the BSE, the barometer 30-scrip Sensitive Index (Sensex) closed at 34,300.47 points — up 294.71 points or 0.87 per cent from its previous close.

The Sensex touched a high of 34,351.34 points and a low of 34,115.12 points during the intra-day trade.

The BSE market breadth was bullish as 2,050 stocks advanced as against 764 declines.

In terms of the broader markets, the S&P BSE mid-cap index edged higher by 1.31 per cent and the small-cap index by 1.60 per cent.

“Markets bounced back on Monday after the correction seen on last Friday. The gains came on the back of strong global cues,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

“Major Asian markets closed on a positive note, barring the Hang Seng index. European indices like FTSE 100, DAX and CAC 40 traded in the green,” he added.

Last week on Friday, the key equities had plunged into the negative territory amid a global sell-off, with the Sensex shedding 407.40 points or 1.18 per cent and the Nifty50 was down 121.90 points.

Vinod Nair, Head of Research, Geojit Financial Services, said: “On Monday, market reversed from previous day’s losses owing to positive global cues and expectation of marginal decline in January CPI (Consumer Price inflation) inflation today.”

“Mid and small-caps outperformed the benchmark indices as investors start accumulating the over sold stocks. The economy is forecast to improve in the long-term with strong earnings growth which is likely to provide a safety to the ongoing consolidation,” he added.

The Central Statistics Office (CSO) is slated to release the macro-economic data points of the CPI and IIP (Index of Industrial Production) on Monday evening.

On the currency front, the Indian rupee strengthened by nine paise to close at 64.31 against the US dollar from its previous close at 64.40.

In terms of investments, provisional data with the exchanges showed that foreign institutional investors sold scrips worth Rs 814.11 crore while domestic institutional investors bought stocks worth Rs 1,342.70 crore.

Sectorwise, the S&P BSE capital goods index surged by 317.88 points, followed by auto index by 266.55 points and banking index by 197.62 points.

On the other hand, the S&P BSE IT index edged lower by 52.47 points and the Teck (technology, media and entertainment) index by 22.59 points.

Major Sensex gainers on Monday were: Tata Steel, up 4.22 per cent at Rs 712.50; Yes Bank, up 2.89 per cent at Rs 334.95; Power Grid, up 2.51 per cent at Rs 198.05; IndusInd Bank, up 2.12 per cent at Rs 1,686.45; and Hero MotoCorp, up 1.94 per cent at Rs 3,615.

Major Sensex losers were: State Bank of India, down 2.67 per cent at Rs 288.50; Infosys, down 0.72 per cent at Rs 1,103.80; ITC, down 0.53 per cent at Rs 269.85; Mahindra and Mahindra, down 0.43 per cent at Rs 746.70; and ICICI Bank, down 0.23 per cent at Rs 326.

The Indian equity markets will remain closed on Tuesday (February 13) for Mahashivratri. (IANS)

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Mamata requests Ford to set up plant in Bengal

Feb 12, 2018 0

Kolkata– West Bengal Chief Minister Mamata Banerjee on Monday said she has requested Ford Motor Company’s Alfred Ford to setting up a manufacturing unit of the car manufacturer in her state.

She also said that great-grandson of Henry Ford, founder of US auto giant would look into the proposal.

“I have requested Ford (Alfred Ford) to plan for a new manufacturing unit here in West Bengal. They have one in Chennai. He said he will look into it,” Banerjee said while visiting Mayapur ISKCON temple in Nadia district.

Ford India, a wholly-owned subsidiary of Ford Motor Company, has an integrated manufacturing plant in Tamil Nadu. (IANS)


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India’s retail inflation for January eases to 5.07%

Feb 12, 2018 0

New Delhi– India’s retail inflation for January has eased down to 5.07 per cent compared to 5.21 per cent in December 2017, according to data released by the Central Statistics Office on Monday.

On a year-on-year (YoY) basis, the CPI inflation last month was 3.17 per cent in January 2017. (IANS)

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