human rights

RBI – Robberer’s Bureau of India

RBI – Robberer’s Bureau of India


S.O.S   e – Voice For Justice – e-news weekly
Spreading the light of humanity freedom

Editor: Nagaraja.M.R.. Vol.11..Issue.30….….25/07/2015

 

 


State Bank of India rewards whistleblowers with dismissal, defamation suit

CHENNAI: Defamation complaints and dismissal from service – these were the gifts management of the State Bank of India showered on four of its employees who acted as whistle-blowers and exposed a series of ‘currency bundle missing’ cases involving several lakhs of rupees from various branches of the bank.

Halting the witch-hunt by top brass of the biggest bank in India and coming to the rescue of the employees one of whom was even dismissed from service, Madras high court said: “It is unfortunate that a public sector bank like the SBI should file a (defamation) suit not only claiming damages for loss of reputation, but also seeking for a prior restraint on the trade union in publishing hand bills, posters and putting up placards.”

A division bench of Justice V Ramasubramanian and Justice K Ravichandrabaabu said, “Image of the bank cannot be confused with officers at lower level committing fraud, misconduct and embezzlement. Certainly when a trade union finds that action is not being taken, they can take the issue to the public and the grievance projected in no way amounts to defaming the bank. An employee working in a public sector bank also owes a public duty when public funds were frittered away or misappropriated.” 

In May 2006, a sum of Rs 30 lakh – six bundles of Rs 500 denomination – went missing from currency notes stored in the strong room of Avinashi branch of Coimbatore module in SBI’s Chennai circle. Holding that chief general manager Pradip Chaudhary cannot be spared for the loss caused to the bank, three persons – M V Thangaswamy, president, S Gunasekar, general secretary and G Arasukumar, treasurer of SBI Ambedkar Trade Union – wrote complaints to the RBI and pasted posters seeking action.

In this regard, they pointed out that cash bundles worth Rs 5 lakh had gone missing from Salem branch, Rs 6 lakh went missing from Rasipuram branch, Rs 5.5. lakh from Aminjikarai branch, Rs 5 lakh from Kulithalai branch, Rs 6 lakh from Avinasi branch, Rs 1 lakh from Avinasi branch and the latest case of Rs 30 lakh going missing from the same Avinasi branch.

The bank hit back by issuing show-cause notices, memos, defamation suits and then dismissal of one officer from service, on the ground that they pasted posters without properly verifying the truth and with a view to defame the bank and cause damage to their business and reputation.

Setting aside the dismissal and other proceedings, the judges said, “It is seen from the contents of the posters that it was only an appeal to the bank for taking action. Specific instances were pointed out to the chief general manager to take appropriate action. Instead of taking action on the grievances projected by the trade union, the bank had filed the suit.”

Exposing inaction of the bank in the light of a series of cash shortages can only be in public interest and making such statements cannot be detrimental to the interest of the bank, the bench said. The bank itself expects its officers to take all possible steps to ensure and protect the interests of the bank. Publishing or exposing the cash shortages in the bank and the inaction of the top officers cannot amount to willful damage to the property of the bank. It cannot even be said to be prejudicial to the interest of the bank, they concluded.

“Merely because it has exposed some irregularities, the poster will not affect the commercial interest of the bank,” they said, adding that on the other hand, only by such exposures, correctional measures could be taken and the bank could assure the general public that all is well with them.

In this regard, the bench pointed out that it is usual practice for trade unions and public sector banks to publish the list of defaulters and the non-performing assets of the bank in order to bring it to the notice of the general public and the government, so that corrective actions can be taken.

 

SOILED NOTE FRAUD CASE @ RBI BANGALORE
–       Trauma of an old man

 

Complete case details also available at http://members.lycos.co.uk/ganapathihariram/

As per allegations of RBI management Bangalore in 1977-79 , criminal
nexus of RBI employees stole Rs. 220000 from RBI Bangalore. All the
banks , government treasuries in Karnataka , submit defaced / soiled
currency notes to RBI Bangalore in exchange for good notes. RBI after
collecting such defaced currency notes , sorts out fairly good notes
which can be reissued & burns off the remaining totally defaced
currency notes. All these process is done in a systematic manner.

As per allegations of the management , the crime took place in the
period of 1977-79 at RBI Bangalore. A nexus of employees, took away
the currency bundles meant for destruction & substituted it in the
place of bundles of reissuables.

Charge sheet issued by RBI Bangalore office to mr.G.Hariram
Staff no.3698/156/84-85 dt 1 april 1985
Amended charge sheet staff no 3798/156-84/85 dt 8 april 1985

CBI has charge sheeted 17 employees in connection with this case ,
case olde no. cc34/1989       new no.  sc 436/1991            . the
honourable 21 city additional city civil & sessions court Bangalore in
it’s order dated 24.01.1992
discharged        03  charge sheeted employees , as the prosecution
failed to prove the charges against them. They came out clean , as
they were innocents saddled with the crime done by others. One of the
charge sheeted employee who turned approver for the prosecution, has
given detailed account of the crime. Nowhere he has mentioned the
involvement of accussed no.15 mr.G.Hariram in the crime.

Even after coming out clean, mr.G.Hariram was not reinstated into
service by RBI. They gave the ruse of domestic enquiry & showed
contempt to the court order. On appeal, the honourable high court of
Karnataka ordered RBI to review it’s order with respect to
mr.G.Hariram , still RBI failed to reinstate mr.G.Hariram into service
, once gain showing contempt to the court of law.

In India as per law , the decisions of court of law are binding on all
, orders of court over rides the organisation’s internal rules ,
service rules , etc. inspite of lack of evidences, in a whimsical
manner the higher authorities of RBI , fixed some innocents as the
scape goats heaped all charges against them ( against whom they had
personal grudge , dislikes ). RBI  repeatedly showed contempt to the
court orders , dismissed the scape goat – ailing old man mr.G.Hariram
from service. RBI snatched away his PF money towards the alleged loss
to the bank , didn’t pay his gratuity amount , salary arrears and
finally he was even deprived of the pension. As a result , the old man
has even lost his social prestige, dignity , his family suffered a lot
& he is a mental wreck today.

Why RBI authoroties are hell bent upon to send away the innocents /
scape goats away from service ? why CBI didn’t conduct polygraph tests
of all the accussed , specifically higher officers of RBI , managers
of RBI office Bangalore ? probably the scape goats were aware of the
crimes master minded by higher ups & didn’t co-operate with the higher
ups in their crimes. So, the criminals were afraid that the scape
goats will blurt out truth to the world , fixed non co-operating
innocents themselves as criminals.

Who will give justice to innocents like old man mr.G.Hariram & who
will bell the corrupt , criminals , fat cats of RBI ?                           

 

 RBI Governor Hiding Information & Hiding Crimes

 

APPEAL UNDER SEC 19 (3) OF RTI ACT 2005 OF GOVERNMENT OF INDIA & GOVERNMENT OF KARNATAKA

 

 

FULL NAME OF THE APPLICANT : NAGARAJA.M.R.

 

ADDRESS OF THE APPLICANT : NAGARAJA.M.R.,

EDITOR , SOS E-VOICE JUSTICE  & SOS E-CLARION OF DALIT ,

# LIG-2 / 761, OPP WATER WORKS OFFICE,

HUDCO FIRST STAGE, LAXMIKANTANAGAR,

HEBBAL, MYSORE , KARNATAKA  PIN – 570017.

 

“Power will go to the hands of rascals, , rogues and freebooters. All Indian leaders will be of low calibre and men of straw. They will have sweet tongues and silly hearts.  They will fight among themselves for power and will be lost in political squabbles . A day would come when even air & water will be taxed.” Sir Winston made this statement in the House of Commons just before the independence of India & Pakistan. Sadly , the  forewarning of  Late Winston Churchill  has been proved right by  some of our  criminal , corrupt people’s representatives , police , RBI  Officials , public servants &  Judges.  Some of the below  mentioned public servants   fall among the category of churchill’s men –  Rogues  , Rascals & Freebooters. RBI  Officials are denying me information under one pretext or the other and covering-up SCAM worth crores of rupees.

 

We salute honest few in public service , our whole hearted respects to them.  HEREBY , I DO HUMBLY REQUEST YOU TO GIVE ME WRITTEN STATEMENTS / ANSWERS TO THE FOLLOWING QUESTIONS – WHICH IN ITSELF ( ie answers ) ARE THE INFORMATION SOUGHT BY ME. HERE WITH I AM SEEKING NOT THE OPINIONS ABOUT SOME HYPOTHETICAL ISSUES , BUT YOUR OFFICIAL STAND , LEGAL STAND ON ISSUES WHICH ARE OF FREQUENT OCCURRENCE WHICH ARE VIOLATING PEOPLE’S FUNDAMENTAL RIGHTS & HUMAN RIGHTS. WE DO HAVE HIGHEST RESPECTS FOR JUDICIARY & ALL PUBLIC INSTITUTIONS , THIS IS AN APPEAL FOR TRUTH , INFORMATION SO THAT TO APPREHEND CORRUPT FEW IN PUBLIC SERVICE, WHO ARE AIDING & ABETTING TERRORISM , UNDERWORLD & CRIMINALS.

 

HEREBY , I DO HUMBLY REQUEST YOU TO GIVE ME WRITTEN STATEMENTS / ANSWERS TO THE FOLLOWING QUESTIONS – WHICH IN ITSELF ( ie answers ) ARE THE INFORMATION SOUGHT BY ME. WITH RESPECT TO CASE NO  old CC34 / 1989 & NEW NO SC436/1991   AT 21

ST ADDITIONAL CITY CIVIL & SESSIONS COURT BANGALORE

CHARGE SHEETED OFFICER MR.G.HARIRAM RBI BANGALORE

CHARGE SHEET NO staff no.3698/156/84-85 dt 01.01.1985

Amended charge sheet  staff no.3798/156-84/85 dt 08.04.1985

 

1. Why didn’t you notice the alleged crimes of 1977 , 78 & 79 till the

mid of  1979 ?

2. This crime came to light only due to anonymous phone calls of good

Samaritans to authorities , but not due to your inspection . is your

inspection division working properly ?

3. why there is no security check up of officers during entry & exit

out of premises ?

4. why there is no individual weighment , individual statement of

value of bags of reissuable notes & bags of note meant for destruction

, after sorting is done, why they are not tallied with total weight ,

value of notes issued for sorting ?

5. Immediately after noticing the crime, why did not you transfer all

the employees of those sections ?

6. why did not you take steps to preserve3 & protect respective

documents relating to such high profile crime ?

7. why didn’t you immediately issue charge sheet to all the accussed &

waited till 1983 ?

8. Why RBI has left out , so many officers ( who worked in the same

sections for more period than accused officers ) from domestic

enquiry ?

9. why CBI also failed to put those people in the charge sheet before

the court ?

10. is it because they were in favorable terms with the vested

interests ?

11. did the CBI dance to the tune of vested interests in RBI while

preparing charge sheet & during investigation , instead  of

independent investigation ?

12. those left out probables from the charge sheet might have caused

the destruction of evidences / records. During the course of domestic

enquiry / court proceedings , it has been recorded that some records

have been destroyed. Are not CBI & RBI responsible for destruction of

evidences , aiding true criminals get away ?

13. in normal times , what is the period specified in RBI regulations

for preserving old documents / records ?

14. after noticing such a high profile crime the RBI must have taken

utmost care to preserve such old records for indefinite time , for

producing before courts of law as & when demanded. But it  didn’t ,

why ?

15. does not this point to connivance of higher authorities of RBI ,

with the criminals ?

16. RBI authorities have conducted domestic mass enquiries , instead

of individual enquiries , is it not detrimental to the rights of

defense ?

17. RBI authorities have stated  that court proceedings & domestic

enquiry are independent of each other & are not binding on one

another. However  RBI authorities straight away took on record of

domestic enquiry the court statements , evidences , but didn’t honour

the order of same court of law ? why this double standard by RBI ?

18. The alleged crime  was committed in 1977-79, but charge sheet was

framed in mid 1985 , why this long delay ?

19. didn’t this facilitate the masterminds of crime to destroy ,

manipulate evidences ?

20. as stated before court , indeed some records , 22nd currency note

packet were missing , who is responsible for it ?

21. has the CBI conducted enquiry , polygraph test of RBI higher

officers – S.N.RAZDAN , W.S.SARAF , J.P.AWASTHI , J.MITRA & others ,

if not why ?

22. is it not due to inefficiency , negligence of duty by such high

ranking managers , that such a crime occurred in RBI Bangalore ?

23. what disciplinary action RBI has taken against the inefficient ,

negligent higher officials ?

24. whatever internal rules an organization makes must be within the

line of law. If such internal laws of the organization are violative

of law , fundamental rights of employees , such internal rules become

illegal. Are not the way of RBI disciplinary proceedings illegal ?

25. as per RBI pension regulations 1990 , RBI has the right to deduct

any loss caused to the bank , from the pension of RBI employee if the

misconduct of employee is proved in judicial proceedings . even though

mr.G.Hariram came out clean from the court , why  RBI has denied his

pension ?

26. judicial courts of law are appellate authorities over & above ,

domestic enquiry committees & judicial orders supersedes the domestic

enquiry proceedings. Still RBI showed contempt of court & didn’t

reinstate mr..G.Hariram into service , why ?

27. even if an employee’s misconduct causing loss to the bank is

proved , before denying him pension (towards making up loss to the

bank) , previous sanction of the central board of RBI must be taken.

But in mr.G.Hariram’s case , pension was denied in full without taking

previous sanction of the central board of RBI , is it not illegal ?

28. RBI alleged that mr..G.Hariram caused loss to the tune of Rs.14000

to the bank & recovered it from his provident fund dues. There was

nothing left over to recover , still RBI  completely denied pension to

mr.G.Hariram , why ?

29. ideally, domestic enquiry findings / disciplinary actions should

be completed first , then the employee can appeal to appropriate court

of law. In mr.G.Hariram’s case , CBI & RBI failed to prove the charges

in court of law , as a result court discharged him from the charges.

To cover-up it’s failures RBI management dragged domestic enquiry much

beyond court orders date & gave findings indicting mr..G.Hariram. does

the enquiry officer of domestic enquiry think that he is over & above

the court of law ? is it not illegal & contempt of court ?

30. ideally , RBI authorities should have appealed to higher court

against lower court order discharging mr.G.Hariram from charges. But

it was not done , why ?

31. did the RBI pay interim relief to mr.G.Hariram , during suspension

period ?

32. the undue delay in filing charge sheet , consequent destruction of

key evidences , dishonour / contempt of court orders , undue haste in

giving findings , dismissal , denial of of pension without central

board’s sanction , all point towards criminals within RBI higher

management. What disciplinary action has been taken against

J.P.AWASTHI, S.N.RAZDAN,J.MITRA, W.SARAF & others ? if not why ?

33. why charge sheet was amended? Is it legal ?

34. did the charge sheet was amended to falsely implicate

mr..G.Hariram , by including cancelled note vault in the charge

sheet ?

35. does not this itself show that it is not statement of actual

happenings / facts , but a cunning ploy to mislead investigation

towards fixed innocents from actual criminals ?

36. is it true that that only 5% of sample inspection is done out of

bundled verified defective note packets ?

37. is not the conduct of joint / mass enquiries of all charge sheeted

officers illegal ?

38. how come such an important evidence 22nd note packet went

missing ?

39. is it because it may point towards real criminals ?

40. as per the statement of management witness / inspection head /

expert mr.vijendra rao , the notes of earlier dates have been removed

from packets made into new bundles , right ?

41. as per his statement , entire certificates , seals of some asst

treasurers are there , who didn’t work at all on that day is not it ?

42. does not it show that some body else was misusing the seals ,

putting some innocents seals over the notes ?

43. does it not show that , crime has taken place at verification

section ?

44. does it not show involvement of some asst treasurers ?

45. why asst treasurers have not been charge sheeted ?

46. why inspection of RBI Bangalore office was not done between 1975 &

1979 ?

47. is it not true that you failed to produce all records showing

internal inspection / audits , during domestic enquiry & court

proceedings ?

48. your expert mr.vijendra rao has stated that some seal marks are

smudged , he has stated some seal marks appears to be so & so. He has

clearly nowhere stated that this seal mark is exactly this , so he

himself is not 100% sure ?

49. your expert nowhere said that 100% sure this seal mark is this ,

on that day this seal was issued to mr.G.Hariram , isn’t it ?

50. your expert says during 1975 , he didn’t notice3 any fraud.

However approver says fraud was there before mid 1977 also. Why no

action has been taken ?

51. why you didn’t produce all records of all persons , who have

specifically worked in alleged sections , the registers of those

departments with daily activity report containing seal nos , packet

nos , bag nos , etc ?

52. are not their chances of some criminals putting the seal marks of

innocent officers over the notes , bundles , bags , etc ?

53. your expert is not 100% sure of seal mark , your records are not

there to prove the presence of charge sheeted officers in the alleged

sections , neither your expert nor your records are 100% sure on what

date , at what stage , by whom crime was committed , isn’t it ?

54. is not the charge sheet amounting to higher ups picking up

officers they dislike & falsely implicating them ?

55. is it not cunning ploy of higher ups to divert attention from

original criminals ?

56. why no action was taken against currency officer of 1977-79

mr.J.Mitra ? why his pension , super annuation benefits were not

withheld ?

57. what is your justification , supporting evidence , records for

picking up only three officers including mr.G.Hariram for legal

prosecution and leaving the majority of probables ?

58. why you have dropped charges against five asst treasurers ? why

you didn’t even conduct domestic enquiry against them , let alone

legal prosecution ?

59. Is it RBI’s & CBI’s way of fair play & justice ?

60. as inly 5% sampling of verified note bundles are done , there are

more possibilities of rebundled packets getting unnoticed in relaxed

95% lot , isn’t it ?

61. you have left out so many officers who worked in those sections,

some of whom even became management witnesses , instead of being

charge sheeted by the management, is it fair play & legal ?

62. who are the bank employees , from whom you have recovered the alleged bank loss of Rs.220000 ?

63. were all of them charge sheeted , enquired , legally prosecuted ,

dismissed & their pension , gratuity withheld ?

64. you don’t have any internal statuotary records to prove that

mr.G.Hariram worked in those departments , except a currency officer’s

office note dated just on the eve of charge sheet years after the

alleged crime ? does it not prove that this note has been concocted

just to fix mr.G.Hariram ?

65. where as you have records of other officials attendance in those

departments , but not charge sheeted them why ?

66. three officers of staff grade A daily work in three sections out of 40 officers , why you have picked up only mr.G.Hariram , out of 1095 working days , he has worked for only 223 days in those

sections , still those officers who worked for more days in those

sections are not charge sheeted why ? the approver , the management

expert witness , shift registers , V2 registers , Destruction

certificates , Form CD 55 , etc , nobody , no records were able to say

on what date , at what stage , by whom crime took place , also they

were unable to say on what date at what stage crime was committed by

mr.G.Hariram ? is it not futile imagination , cunning ploy of RBI

higher authorities to fix innocent Mr.G.Hariram ?

67. the management expert witnesses said , the most probable place of

crime is punching / Cancelled Note Vault , incinerator , where asst

treasurers were joint custodians . they were not enquired & let off

why ?

68.        the charge sheet alleges extraction / substitution of

defaced note packets. Where as the management expert witness say

substitution of defaced notes only ? is not there difference between

loss of one number of note & 100 number of notes ?

69.         as per the normal course of duty , staff officers does not

count notes in each bundles , but they just count the number of

bundles only. Is not there chances of inserted note bundles or bundles

containing less number of notes going unnoticed ? is it not the

failure of statuotary system of work practices ?

70.         does not all these prove higher authorities of RBI & CBI

were hell bent to fix mr.G.Hariram & to shield the original

criminals ?

Questions with respect to other cases :

71.         how do you monitor the work of bank officials nominated as

directors of companies which have availed bank loans ?

72.         how do you monitor the work of companies , in which banks

have invested ?

73.         how do you monitor the rapid wealth growth of certain bank

officials , who work in shares investment / equity funds section ,

etc ?

74.         inspite of project reports by bank officials , over

assessment of collateral securites / value of debtor companies by bank

officials , the loans become NPAs  & full value  cann’t be realized in

the market by selling off the assets of debtor companies also. In such

cases , what action is taken against erring bank officials who collude

with criminal industrialists for availing higher amount of loan than

permissible ?

75.         give bankwise  specific figures of NPAs.

76.         give names of industrial groups / promoters whose

companies have become NPAs , so that public can be aware of them  ,

before investing in new companies promoted by them.

77.         is not collection of loan from debtors of bank through

rowdies / recovery agents , illegal ?

78.         why not criminal complaints filed against bank mangers for

aiding , abetting rowdism , murdering people ?

79.         if your method of employing rowdies to collect loans of Rs.

10000 from commoners is right , what would you do to a promoter of a

debtor company to recover loans of crores of rupees , supari killing ?

but debtors of crores of rupees is let off coolly by banks , why ?

80.         what is the exact amount of loss caused to the exchequer

by karim lala telgi who printed fake stamp papers ?

81.         what action has been taken against those involved ?

82.         have you taken action against all those mentioned by telgi

during narco analysis test , if not why ? is it because they are

powerful & bigwigs ?

83.         how you are controlling the illegal finance activities ,

money lending by individuals , pawn brokers & chit fund companies ?

84.         how you are monitoring the receipt of public donations ,

foreign donations by many NGOs ?

85.         how many erring NGOs , chit fund companies , pawn

brokers , individuals you have booked for illegal finance activities ?

Questions relating to RBI CURRENCY NOTE PRESS MYSORE

86.  who were responsible for selling the good printing machine at

security press nasik to scamster karim lala telgi as scrap ?

87.  who recruited the candidates below merit rankings in R.B.I for

what criminal roles ?

88. how many irregularities have taken place in R.B.I till date ?

89. who is responsible for installing, operating & supervising the

security set-up in R.B.I ?

90.  how the raw materials ie number of paper sheets, ink, etc are

accounted for in inward stores & while issuing for printing ?

91.  how wastages, scrap of ink , papers , etc in the printing process

are accounted for?

92.  How the finished goods ie currency notes are accounted for ?

93.  Who keeps physical figures & possession of goods, inventory of

all the above?

94.  How the scrap paper is disposed off ?

95. From security angle who keeps track from start till dispatch ?

96.        Give me the merit ranking list of all candidates for the

post of stores assistant in BRBNMPL in the year 1995-96 ?

97.        give me the merit ranking list of all candidates for the

post of process assistant at BRBNMPL in the year 1996 ?

98.        give me the merit ranking list of all candidates for the

post of process assistants & maintenance assistants at BRBNMPL in the

year 1996-1998 ?

99.        is not RBI & BRBNMPL authorities created by statuotary

laws , fully funded by public money ie from government exchequer ?

100.   still why BRBNMPL & RBI refused to answer my previous

information request as per RTI Act ? are you afraid that skeletons

will come out of cubboard ?

101.   what action initiated against the SBI  branch Bangalore  & SBI

Overseas branch for loss of cheque / draft amounting to crores of

rupees ? if not why ?

102.   give me specific figures bank wise with respect to loss caused

to the bank by loss of cheques or demand drafts , etc ?

103. how RBI is containing crimes of loss of cheques / DDs  causing huge losses to the banks to the tune of crores of rupees ?

104. what action taken against the RBI officials who are covering up crimes inspite of my repeated appeals & RTI requests ?

 

 

YEAR TO WHICH ABOVE PERTAINS : MAJORITY OF DOCUMENTS PERTAINS TO YEAR  1995 – 2015 .

 

 PUBLIC INFORMATION OFFICER  WHO FAILED  TO GIVE INFORMATION :

CPIO ,  C/o PCGM and Secretary , Secretary’s Department , Reserve Bank of India , 16 th floor, Central Office Building , Shahid Bhagat Singh Marg , Mumbai – 400 001

 

FEES PAID : IPO  16G  733466  for rupees TWENTY only

 

 

DATE :  28.03.2015 ……………..………………………NAGARAJA.M.R.

 

 

PLACE : MYSORE , INDIA….. ……………………….( APPLICANT)

 

 

 

 

FINANCE SCAMS IN INDIA & 5-STAR LEADERS WITH BEGGING BOWL

In ” mysooru mithra” a kannada daily dated 15/06/2005, the editor has
written about a copy of the complaint made by Transparency
International India-Bangalore to central vigilance commission of
india.

In indian banks , there is a strange practice that whenever a cheque
is put before the clearing house by a bank, the clearing house sends
that cheque to the service branch of bank paying. The service branch
then sends that cheque to the appropriate bank branch
for deduction of cash from the cheque account. In this travel , if the
cheque is lost or misplaced midway, the service branch pays out of
it’s suspense account to the cash collecting bank. Logically,
afterwards the service branch must initiate a thorough inquiry, get
authentication from both persons one who gave cheque & other who
collected cheque. Finally, the money must be transferred from the
account of cheque giver to the suspense account.

However , upto 1997 two branches of state bank of india in bangalore &
overseas branch sufferred from frequent loss of cheques totally
amounting to RUPEES THREE THOUSAND TWO HUNDRED CRORE. In all cases of
cheque loss the bank has paid out of suspense account, totally
amounting to Rs.3200 crore. However the bank has not
initiated any enquiry to recover that amount from the cheque givers.

In the 1997 internal audit report of the bank itself , this has been
clearly pointed out. Till date, even the central vigilance commission
has not initiated any action about it. A member of central vigilance
commission happens to be ex-chairman of state bank of india.

It is just an instance of two branches of SBI, what about hundreds of
branches of SBI, what about thousands of branches of other public
sector,private sector & co-operative banks. It is fraud,fraud,fraud
all the way. Few months back to cover-up the crimes
of global trust bank ( GTB) , it was taken over by oriental bank of
commerce ( OBC).
While sanctioning a loan of just Rs.10000 to a common man , he has to
comply with lengthy legalities. If he defaults, bankers breath down
his neck, bankers send rowdies in the form of recovery agents to
humiliate the common man & his properties are
auctioned-off, finally all dues to the last penny are recovered. In
most of the cases bankers even force the defaulters to commit suicide.
However influential persons easily gets loans amounting to hundreds of
crores of rupees, coolly defaults, siphons-off the funds & shuts his
shop. No recovery at all , just it becomes a non- performing asset
(NPA) in the bank ledger. The total NPAs of all public sector banks is
more than Rs.80000 crore. This burden is spead over the crores of
hapless indians.

The government takes pride in murdering forest brigand veerappan. The
ill-gotten wealth of veerappan is not even pea nuts before this huge
amount. Remember past finance scams – MS SHOES, HAWALA, HARSHAD MEHTA
SHARE SCAM, KETAN PAREKH SHARE SCAM, UTI, etc. totally in all these
scams billions of dollars of public money have gone to the coffers of
criminals. These scamsters put veerappan to shame in their turnover.
However the government is not even exhibiting a fraction of it’s
ELIMINATE VEERAPPAN DRIVE against these scamsters, why?

In india, both central & state government tax/ revenue officials are
neck deep in corruption. By, taking bribe they make lower assessment
of income, gains, etc & spare businessmen from the tax payment. The
government in return for favours received from
lobbies, gives tax exemptions to them at it’s sweet will. All these
scams & it’s cover-ups are insider jobs. The government is not
interested to collect, recover it’s own monies
amounting to billions of billions of dollars every year. However our 5-
star leaders living at the expense of tax-payers, go-on foreign jaunts
with a begging bowl for a few lakhs of dollars. What a shame?

More than 50 billion indians are barely surviving on a single meal per
day & hundreds are dying due to starvation, billions don’t even have
basic necessities of life. If the government even just collects a
fraction of it’s dues from scamsters, defaulting industrialists –
people won’t die of hunger in india. Has this enlightened our thick
skinned netas ?

 

 

 Editorial : Crimes  @  Reserve  Bank  of  India
–       An appeal to SUPREME COURT OF INDIA & central information commission

Ref  no. RTI APPEAL via web DPG/B/2008/80341

RBI is a public authority , set up by an act of parliament. Numerous
irregularities , illegalities , crimes have taken place at RBI , still
it is fully covered up by those in influential positions.

 

Just refer  “Oil for Food Money in Iraq scam ”  and “ Vostro Account Scam of 1990s”. Influential people are involved , everything happened under the noose of RBI , With the connivance of RBI officials ?

 

We requested the CPIO of RBI HQ for information as per RTI Act  ( our
letter dt 20th September 2008 ) about various issues concerning the
activities of that institution in whole. However the CPIO OF RBI HQ
through his letter no.DAPM.CO.RIA.4001/07.50.01/2008-09 dt October
03rd 2008 declined to give information citing certain ruses. ( RBI Ref
no. RIA 798/2008-09 )

He has stated that some information pertains to security press ,
nashik & note press at mysore. True , both those institutions are
fully owned subsidiaries of RBI , hence RBI is in a position to
answer. Still , RBI can transfer a copy of our RTI Application  to
those authorities as per provisions of Sec 6(3) of RTI ACT 2005. CPIO
didn’t do that.

One more ruse of CPIO of RBI is that , I am seeking his views /
opinions on issues concerning RBI activities. He is wrong , I am
seeking to know the official / legal stand of   RBI regarding it’s
activities for example , appointment of rowdies as loan recovery
agents by banks , etc. CPIO has failed to state the official stand
regarding various activities of RBI.

One more ruse given by CPIO of RBI is that I have raised many issues ,
to be specific 103 questions on various topics concerning RBI , giving
information on all those diverts the resources of authorities , hence
information request is denied. TRUE , information sought is many , so
do the crimes @ RBI which are also many. When compared to magnitude of
crimes @ RBI which is 3-4 times the entire budget outlays of Indian
government  to the tune of crores of rupees  , the resources spent to
ascertain information as per our RTI Application is just few hundreds
of rupees. When compared to the money spent by RBI officials by way of
TA / DA during their travel , etc, our information request resource
needs are peanuts.

To sum up , CPIO of RBI is hell bent to protect the criminals @ RBI
lest the truth comes into open. Hereby , we request the honourable
Supreme Court of India & central information commission  to order the RBI to give us truthful
information in whole , so that justice is given to those victimized &
fat criminals are sent to gallows. JAI HIND. VANDE MATARAM.

Read the article “Crimes @ RESERVE BANK OF INDIA”  @ http://theftinrbi.blogspot.com/
http://theftinrbi.rediffblogs.com/  , http://theftinrbi.wordpress.com/

Your’s sincerely,
Nagaraj.M.R.

 

 

The hawala trail

PRAVEEN SWAMI

 

BRITISH officials are investigating the activities of one of the most prominent overseas backers of secessionist groups in Jammu and Kashmir. Last month, the United Kingdom’s Charities Commission and the Metropolitan Police began looking into allegations that Ayub Thokar, the head of the World Kashmir Freedom Movement, had funnelled funds raised for charity to the terrorist groups.

Investigations into Thokar’s role in funding terror began after Indian officials handed over evidence in the case to their British counterparts in June. The two Indian officials from the Ministry of Home Affairs and a senior Jammu and Kashmir Police officer made available details of funds funnelled from Thokar’s charity, Mercy International, through Standard Chartered Grindlays Bank (since then renamed Standard Chartered Bank) and the Development Credit Bank. The investigators also provided transcripts of telephone intercepts and cases filed against the recipients of the funds in India.

On May 25, a long-running Intelligence Bureau operation led to the arrest of Srinagar-based journalist Imtiaz Bazaz. Officials claim that he was a key conduit for transferring funds to Hizbul Mujahideen field commanders in Jammu and Kashmir. On April 22 Bazaz had received a foreign currency remittance of Rs.4,84,875 into his account with Standard Chartered in New Delhi, and on May 15 a second remittance of Rs.14,98,000 into the Development Credit Bank. Although intelligence officials monitored the first transaction, they did not intervene, in the interest of building up evidence. The second transaction was frozen.

The funds trail led straight to Thokar. It transpired that in early 2001, Hizbul Mujahideen chief Mohammad Yusuf Shah had sent Rs.48 lakh to Jamaat-e-Islami leader Syed Salahuddin through Thokar. Subsequently, after the arrest of Jamait-ul-Mujahideen finance commander Qasim Faktu, Thokar began to finance his organisation through the terrorist’s wife, Asiya Indrabi. Most of the funds were routed through Bazaz, who arranged for the transfer of funds received in New Delhi to accounts held with the Jammu & Kashmir Bank in Srinagar. Cash was then paid to the final recipients.

Meanwhile, Income Tax Department investigations against All Parties Hurriyat Conference (APHC) leader Syed Ali Shah Geelani have started to bear fruit (Frontline, July 5, 2002). The secessionist leader claimed an annual agricultural income of Rs.10,000 in his tax returns, and also received the official pension of Rs.85,200 due to two-term MLAs – ironically enough for a man now at the cutting edge of the secessionist anti-election campaign! His expensive house in Hyderpora, however, had several cars parked there and the household was run by a personal staff of 14 people. The monthly kitchen expenses amounted to Rs.25,000. Income Tax Department searches of the Geelani home also yielded Rs.10.25 lakhs and $10,000 in cash. Income-tax officials have now decided to impose penalties of Rs.30 lakhs on Geelani, based on his estimated income over the last six years, the maximum period allowed by law. His businessman son-in-law Altaf Ahmad Shah, who allegedly used his legitimate operations to launder funds, has been slapped with a Rs.40 lakhs penalty. Failure to pay could lead to the auctioning of Geelani’s assets, including the Hyderpora home.

Separate income-tax penalties of Rs.2 crores have been imposed on businessman Abdul Rashid Saraf, who was allegedly involved in handling hawala funds sent to APHC chairman Abdul Gani Bhat. Saraf, income-tax authorities found, had failed to disclose income of Rs.3.37 crores over the last six years.

The vigour that the Income Tax Department has shown in this matter marks a welcome departure from the past. After it was driven out of Srinagar in the later 1980s by mobs that attacked income tax inspectors, the organisation had granted de-facto independence to the State. This time, two planeloads of officials flew into the Avantipora Air Force base and they were escorted to the raids by police officers. Their successes seem to have convinced the Income Tax Department that it is after all possible to play a useful role in Jammu and Kashmir.

In the U.K., both Mercy International and Thokar will now have to answer some hard questions. For one, there is no explanation why the organisation did not send supposed philanthropic donations to the several-dozen charities in Jammu and Kashmir which have clearances under the Foreign Exchange Management Act. Thokar will also have to explain how he paid for the purchase of his London home, and his regular overseas travels, given the fact that he has no ostensible means of income. India has, however, chosen not to seek Thokar’s extradition, since the fact that his wife is a U.K. national makes this outcome unlikely.

For India, British action in this case will be a key test of its loudly-advertised anti-terrorist stance. In March, sources told Frontline, Deputy Prime Minister L.K. Advani had handed over to British Foreign Secretary Jack Straw a dossier on the activities of secessionist groups in the U.K. Titled ‘Misuse of British Soil by Kashmir Expatriates Based in the U.K. for Funding Terrorism in J&K’, the document outlined many of the charges which investigations have now added substance to. Sources say the team that visited the U.K. pointed to Straw’s promises to crack down on terrorism-related money laundering, and were told that criminal prosecutions would take place in the U.K. Earlier, the U.K. successfully prosecuted two Khalistan-linked British nationals involved in backing the Babbar Khalsa International.

If funds transfers to terrorist groups are effectively cut off, it will do not a little to cripple such organisations. The reasons are simple. While it is easy to send cadres across the Line of Control, actually sustaining their activities in Jammu and Kashmir needs an elaborate financial structure. Money is needed to pay for everything from food and shelter to informants, political support and the legal defence of arrested sympathisers. Since it is impossible to lug sacks full of cash across the LoC, illegal funds transfers come into play. For many businessmen in the Kashmir Valley, holding such cash for short terms has been a profitable, risk-free enterprise. Now the penalties imposed should persuade conduits for blood-money transfers that crime does not, in fact, pay.

 

 

Al-Qaeda routing money to India via Europe

 

 

New Delhi, Mar 6: European countries are being used as hot destinations by terror group al-Qaeda to route money to India, according to a report by Peruvian Financial Intelligence Unit (FIU).

The report said the FIU had found at least one case of such suspicious transaction by al-Qaeda every month and shared them with the US investigators.

“The FIU also reports tracking cases similar to that of an OFAC-designated (US Office of Foreign Assets Control) of al-Qaeda element moving money from Europe through Lima and on to India,” the report leaked by Wikileaks, a non-profit media organisation dedicated to bringing important information to the public, quoting FIU head Enrique Saldivar disclosed.

“Asked if this al-Qaeda case was the first of its kind or they had seen similar cases before, Saldivar told NASOff that they see about one case a month,” the cable said.

The FIU receives and analyses STRs, may request additional information relevant to cases or operations related to money laundering or terrorist financing, provides Financial Intelligence Reports (FIR) to the Public Prosecutor’s Office, participates and/or requests joint investigations, and coordinates with foreign FIUs and entities.

“Of the 7,710 suspicious activity reports examined by FIU analysts in 2009, 781 resulted in financial intelligence reports sent to the Public Ministry for further processing and investigation.

“Based on these 781 intelligence reports, the FIU concludes more than 3 billion USD moved illegally through Peru”s financial sector in 2009,” it said.

“83 per cent of this amount, according to the FIU, is related to drug trafficking. The other 17 per cent is reportedly related to fiscal fraud, corruption and illegal gun dealing. Currently, 308 of these intelligence reports are at various stages of investigation and prosecution in the legal system as compared to four cases in 2008,” the cables read.

According to Saldivar, anti-money laundering efforts in Peru are hindered by several factors.

 

StanChart prospectus quiet about cases

 

Mumbai: Standard Chartered Plc, (StanChart) which is set to hit the market with the first ever issue of Indian depository receipts (IDRs) on 25 May, has not disclosed many pending cases against it for alleged violation of foreign exchange remittance norms in the draft red herring prospectus submitted to the capital markets regulator.

The alleged violations—17 transactions of drafts, one telex transfer and two cash transactions—go back to 1991-92, when the Enforcement Directorate (ED) found a series of forex violations made through the bank’s Mumbai branches to the UK.

ED is a government agency that looks into foreign exchange transactions.

The violations were discovered after ED investigated a number of banks, including Standard Chartered, in the aftermath of the Harshad Mehta scam that rocked the stock markets in 1991-92.

The ED complaint was filed in the court of chief metropolitan magistrate in Mumbai by enforcement officer S. Parvez in May 2002.

These complaints, which are still pending, charge the bank and its then chairman Rodney Galpin of “total violation” of the exchange control manual and provisions of then prevailing foreign exchange regulation norms.

Mint has reviewed copies of some of these case files.

The Issue of Capital and Disclosure Requirements (ICDR) norms, laid down by the Securities and Exchange Board of India (Sebi), require any firm floating a public issue to disclose all pending proceedings initiated for economic offences against the issuer or its directors, as well as the present status of such cases.

StanChart said that it has no “material litigation” to disclose. The bank’s spokesman Arijit De said the lender has applied the relevant materiality standard in arriving at the disclosures.

In response to an email questionnaire, he said the bank would comply with the applicable laws, regulations and international practice with regard to material information disclosure and uniformity of disclosures.

“Accordingly, in relation to disclosure on litigation, as provided under the provisions of the Sebi (ICDR) regulations, 2009, as amended, Standard Chartered Plc, as an issuer of IDRs, is required to disclose ‘material litigation’. In considering whether disclosures are necessary in relation to litigation, Standard Chartered Plc has applied the relevant materiality standard. On this basis, no litigation is required to be disclosed,” the email said.

Under Sebi rules, the so-called materiality of a case must be judged on three broad parameters: qualitative nature, litigation or defaults that may not be material at present but might have a material impact later, and litigations that may not be material individually, but may be found material collectively.

A questionnaire to Sebi on whether it has granted any special exemption to StanChart for the IDR remained unanswered.

A senior lawyer at a national law firm said: “All pending litigations that have a bearing on the issue should be disclosed in the prospectus as per ICDR regulations. Moreover, the issue of materiality varies from case to case and is subjective. If I were an underwriter, I would have disclosed the status of the cases and justified if the cases have any material impact on the company’s businesses or not, in the prospectus.” The lawyer did not want to be identified.

Market analysts say there is no definitive yardstick for deciding the importance of a case.

“Materiality is subjective and judgemental,” said Prithvi Haldea, chairman and managing director of Prime Database, a primary market tracker. “The merchant banker, issuer and lawyer can collectively take a call on whether a matter is material or not.”

However, if these matters are decided in court and proven to be material, the issuers, bankers and lawyers can be taken to court for substantial damages, he added.

The amount involved in the 17 transactions listed by ED and facilitated by the bank between February 1991 and September 1992 is Rs4 crore. The bank also allegedly facilitated a telegraphic transfer of Rs1.5 crore. ANZ Grindlays Bank, which was acquired by StanChart in 2000, allegedly helped the same entities transfer around Rs55 crore. Separate cases are pending against both banks in the matter.

According to the case files, Irish rugby player Keith Fairbrother was the key beneficiary of the transfers. He owned a company, Indo International, earlier known as Eastern Suburbs, based in the UK, but with bank accounts in both names in India as well as the UK.

Fairbrother is said to have facilitated a few import-export deals between some Indian firms and their counterparts in the erstwhile Union of Soviet Socialist Republics (USSR). Since India and USSR had bilateral trade pacts, any payment to entities there needed to be routed through the Reserve Bank of India (RBI) with appropriate approvals and sanctions. Fairbrother, the files claim, broke these rules using various foreign banks, including StanChart.

Through his associate Kuldip Singh Sood in India, Fairbrother would collect Indian rupee drafts drawn by an Indian bank on its domestic branch. Allegedly with the connivance of StanChart, he would get them cleared without making any declarations or taking any approvals and credit the amount to a vostro account of StanChart London and Manchester. These banks would, in turn, transfer the amount to a beneficiary of the same name in the UK.

A vostro account is the local currency account held by a local bank for a foreign one. Such accounts are used for inter-bank transfers, and money transfers to non-residents need RBI’s nod. ED has charged that the bank and its then CEO violated these rules.

A senior broker, on condition of anonymity, said that as a matter of principle, the company should publish all pending legislation and leave the question of materiality to investors’ judgement.

“By choosing to ignore pending legislations, they are setting a bad example for the companies coming to list such instruments in future,” he said.

n.subramanian@livemint.com

 

Excise scam money used to fund terror’

 

 

PANAJI: Opposition leader Manohar Parrikar on Thursday said he would write to Prime Minister Manmohan Singh, fearing that money from a multi-crore excise scam linking Goa with Indian border states is being used to fund terrorist activities.

Parrikar has also alleged that the state excise department has been issuing permits to companies furnishing bogus addresses.

·                                 Incidentally, the state government’s reply that the state finance secretary is investigating earlier allegations made by Parrikar on the excise scam has not satisfied the opposition leader, who has demanded that the matter be immediately handed over to the Central Bureau of Investigation (CBI).

·                                  

Raising the matter during question hour, Parrikar said that illicit alcohol consignments worth crores of rupees are being sent to border states in the north and north-east of India.

“Money from this scam is being used to fund terror networks. The excise departments from other states such as Punjab, Rajasthan and the north eastern states are involved,” he said. The opposition leader also reminded the House that he had first made these allegations in the last assembly session.

“I believe the prime minister is an upright person and I will write to him to probe into this,” Parrikar said. Chief minister Digambar Kamat, however, did not commit to a criminal investigation into the scam.

“The finance secretary is currently conducting an inquiry into the matter,” he told the House.

Parrikar retorted: “The finance secretary does not have powers to conduct such an inquiry. We have to verify the signature of the superintendent of excise on the order, which the finance secretary will not be able to do. He cannot go to Punjab and Rajasthan to investigate the matter.”

“The only thing that needs to be investigated is who made the payment for the 1.04 lakh litres of alcohol that was imported in September. Trace the source of payment and you will find out who the culprit is,” Parrikar said.

 

UBS deal died over unexplained money

 

 

Mumbai / Pune: The reluctance of a top Swiss bank to help Indian investigators is slowing the unravelling of an intricate multinational trail of money transfers—across Switzerland, New York, the British Virgin Islands and Pune—between an Indian horse owner and a fugitive Saudi arms dealer, according to officials in the Enforcement Directorate, the government body that investigates economic crimes.

A top official in the Enforcement Directorate (ED) who did not wish to be identified confirmed on Friday that the agency’s officials, in December 2007, had advised the Indian government not to clear a Rs467 crore plan by UBS (United Bank of Switzerland) AG, the world’s biggest wealth management company, to buy the Indian mutual fund business of Standard Chartered Bank because the Swiss bank had not helped track international money transfers of Pune horse owner Hassan Ali Khan.

Investigators from the ED, who recently claim to have found $8 billion in the Swiss bank accounts of Hasan Ali Khan, say they now have evidence of a $300 million transfer to him (via a Chase Manhattan bank account in New York) from billionaire Saudi arms dealer Adnan Khashoggi, whose arms supplies to Tamil terrorists, the LTTE, were revealed during an investigation into the 1991 assassination of Rajiv Gandhi.

alt=”Home turf: Hassan Ali Khan (second from right, in safari suit) with wife Rheema (second from left) and father-in-law Abbas Ali Khan (fourth from right). ” title=”Home turf: Hassan Ali Khan (second from right, in safari suit) with wife Rheema (second from left) and father-in-law Abbas Ali Khan (fourth from right). ” v:shapes=”_x0000_s1026″>Home turf: Hassan Ali Khan (second from right, in safari suit) with wife Rheema (second from left) and father-in-law Abbas Ali Khan (fourth from right).

As the Bombay high court hears an Enforcement Directorate plea not to return passports to Khan and his wife Rheema, theHindustan Timeshas previewed a secret ED report that reveals the agency’s attempts to find the links between Khan and Khashoggi.

As evidence the report quotes a notation, “funds from weapon sales”, made by UBS AG, a top-tier investment banking and securities firm, after it froze an account belonging to Hassan Ali Khan, the Pune horse owner, following the $300 million transfer to him—it isn’t clear when— from Khashoggi.

“I would not like to talk about this,” said UBS India managing director and chairperson Manisha Girotra, referring all questions to the bank’s spokesperson.

“As a truly global entity, our policy on such issues is to comply with the laws and regulations in each host country, while at the same time, complying with the banking laws in Switzerland,” the UBS spokesperson said in an email. The spokesperson declined to comment specifically on the arms sale notation.

The government has told the Bombay high court that the Khans are “virtually absconding” and if they are allowed to leave India, investigations could collapse. Khan’s counsel, Milind Sathe, said his client “regularly appeared before the Directorate”. Asked where Khan was, his main lawyer, Mugdha Jadhav, said: “Can’t tell you, sorry.”

At Pune race course, HT found Hassan Ali Khan’s father-in-law, Abbas Ali Khan, who said his son-in-law was “not well” and in Mumbai. He dismissed all allegations.

Hassan Ali Khan has three Indian passports—issued from Pune, Patna and Mumbai; he also applied for passports from Guwahati and Chandigarh— and he and his wife have applied to Switzerland for citizenship, another ED official who did not wish to be identified said. Passport authorities in those three cities are now trying to find out how three passports were issued to Khan.

Kashoggi now lives a quiet life in the principality of Monaco. There is a British warrant out for his arrest.

Another top official at ED who also did not wish to be identified said Kashoggi’s $300-million transfer was “only the tip of the iceberg” and that the agency was trying to connect the dots in the global trail, which also includes evidence of another $290 million in two “fictitious companies” created by Hassan Ali Khan and a friend in the British Virgin Islands in the Caribbean. All the money transfers are recorded in a laptop seized in January 2007 from Hassan Ali Khan’s house in Pune and while investigators believe this is laundered money, there is no direct evidence. They would also need corroboratory evidence to establish that these transfers have anything to do with terror networks.

“These are all false allegations,” said Sathe. Asked about the $300 million transfer from Khashoggi, he said: “When the Enforcement Directorate questions us, we shall give a reply.”

The ED official, who confirmed the agency’s involvement in spiking UBS’ deal with Standard Chartered, said the Swiss bank had told Indian investigators to get a letter rogatory, a formal request from an Indian court to a Swiss court. This is a complicated process and would have needed to be routed through the ministry of external affairs, and it would have involved finding and presenting clear evidence of Hassan Ali’s links to terror.

It now seems apparent that UBS’ stand in the ongoing investigation led to the collapse of its deal with Standard Chartered Bank.

In a December report, Mint said that the Reserve Bank, India’s banking regulator, would not approve the deal because of possible money laundering through the Swiss bank involving certain transactions of Khan. On Friday, RBI declined to comment. “We are a civil body,” a spokesperson said. “Whenever we find violations, issued to be investigated, we hand over the information to the Enforcement Directorate. We have not issued any comments on the issue of UBS.”

In December, Standard Chartered, the parent of Standard Chartered Bank in India, sent a notice to stock exchanges in London and Hong Kong, where it is listed, saying it would not proceed with the deal, without giving a reason.(Hindustan Times)

 

 

CRIMES OF RBI & CBI & IT’S COVER-UP
– An appeal to honourable supreme court of India

The central bank of India  Reserve Bank Of India , which is supposed
to direct the fiscal policies of government of India , has failed to
do so. It has enabled many looters in the garb of entrepreneurs  , to
swindle the exchequer to the tune of crores of rupees. The premiere
investigating agency of India CBI has failed to nail the culprits.

Hereby , I do request the honourable supreme court of India to treat
this as a PIL application & to provide speedy justice in following
cases.

Read the article “Crimes @ RESERVE BANK OF INDIA”  @ http://theftinrbi.blogspot.com/
http://theftinrbi.rediffblogs.com/  , http://theftinrbi.wordpress.com/

Read the article “PF scam shame shame judges” @
http://corruptmajority.blogspot.com/ ,
http://corruptjudges.rediffblogs.com/

 

AN APPEAL TO UNION FINANCE MINISTER GOVERNMENT OF
INDIA

An age old saying – AS THE KING SO DOES THE SUBJECTS. In india various
financial scams, crimes & it’s cover-ups have taken place amounting to
billions of billions of dollars have taken place, made possible , just
due to the involvement of the king – the netas & government officials
themselves in the shameful act – the crime.

The tax officials are utterly corrupt, the wards of these officials
spend double their pappa’s salary just during
weekends. Now, realise their financial might. These ill-gotten wealth
is destabilising our economy & might have even found it’s way into the
hands of underworld, terorrists. INDIA WILL BE DEFEATED FROM
CRIMINAL FORCES WITHIN LIKE THIS NOT FROM THE EXTERNAL FORCES.

Hereby, the HRW urges you to make public:

1. the financial worth of finance minister to tax official at circle
level, on annual basis including his spouse’s worth & property
details.

2. to make public the NPAs, losses & monies under litigation by both
private & public sector banks annually.

3. to make public measures taken to recover these monies.

4. to publish annual accounts with complete details of discretionary
funds allotted to the defence ministry, president, prime minister,
chief ministers , governors & intelligence agencies.

Public want to know whether proper discretion is being applied while
spending.

 

 

R.B.I CURRENCY THEFT CASE – COVER-UP ACT BY C.B.I?
– AN APPEAL TO THE UNION FINANCE MINISTER & CENTRAL VIGILANCE  COMMISSION

Even in ordinary branches of banks , the safety
locker room keys & currency chest room keys are with senior managers
only. with advance of technology various electronic gadgets like
burglar alarms, user id & palm readers are in use. It is quite
shocking to know that , in high security RBI CURRENCY PRESS , mysore
these gadgets were not in use & the keys were easily accessible to
ordinary security guards. Also, in mysore press there is no proper
accounting practices for blank papers issued for printing , after
printing is done accounts of accepted notes & rejected notes is not
at all kept. CBI is putting the whole blame on an ordinary security
guards & hurrying to close the case. The repeated thefts are not at
all possible by security guards alone without the help of insiders /
higher executives. CBI is trying to fool whom?

Even with respect to my complaint regarding
recruitment scandal complaint no: DPG/B/2005/80049 (2) (RBI) new
complaint no: DPG/Z/2005/90040, neither CBI nor secretary ( finance
sector ) department of economic affairs government of india nor the
RBI governor has taken any steps till date , why?
Hereby, e-voice  urges the honourable union finance
minister & CENTRAL VIGILANCE COMMISSION to look into the matter & to
provide speedy justice to all concerned.

 

C.B.I COVERING UP THEFTS IN R.B.I
Lie detector tests for C.B.I officers ?

 

Nowadays even free e-mail accounts need password to operate, to
operate a bank locker there are multi level security settings.
However , it is ridiculous, unbelievable to note that in the high
security reserve bank of india currency note press mysore, there were
no different key sets , palm readers, pass words, no different
authorised persons, no troops of security guards, to access the area.
Just only one security guard- a constable.

It is a cock & bull story of C.B.I, that all alone a single security
guard stole the booty. There must be a crime syndicate. The C.B.I
officers themselves must be subjected to polygraph, brain mapping
tests to know why they are lying , to cover-up whom? The C.B.I has
not answered previous questions raised by  us. The C.B.I must answer
the following questions :

1. who were responsible for selling the good printing machine at
security press nasik to scamster karim lala telgi as scrap ?
2. who recruited the candidates below merit rankings in R.B.I for
what criminal roles ?
3. how many irregularities have taken place in R.B.I till date ?
4. who is responsible for installing, operating & supervising the
security set-up in R.B.I ?
5. how the raw materials ie number of paper sheets, ink, etc are
accounted for in inward stores & while issuing for printing ?
6. how wastages, scrap of ink , papers , etc in the printing process
are accounted for?
7. How the finished goods ie currency notes are accounted for ?
8. Who keeps physical figures & possession of goods, inventory of all
the above?
9. How the scrap paper is disposed off ?
10. From security angle who keeps track from start till dispatch ?

 

ILLEGAL RECRUITMENT IN R.B.I CURRENCY NOTE PRESS RESULTING IN FREQUENT  THEFTS ???

 

Dear sir,

I have applied for the post of STORES ASSISTANT in
1995 & for the post of PROCESS ASSISTANT in 1996 for vaccancies at
Bharatiya Reserve Bank Note Mudran Private Limited ( BRBNMPL) MYSORE
& SALBONI. I didn’t even get the interview/written test call letter.

However candidates with lesser merit ranking were selected. My
requests for a copy of merit ranking list fell on deaf ears.
In the end of 1996, i once again applied for the
posts of PROCESS ASSISTANT & MAINTANANCE ASSISTANT at BRBNMPL. This
time
round i got written test call letters for both posts. I have
successfully cleared the common written test for both posts.
Subsequently i got the interview call letters for both posts. I have
successfully appeared for the common interview for both posts.
However candidates of lesser merit were selected & i didn’t get any
communication at all. My repeated requests for MERIT RANKING LIST
fell on deaf ears.

It is the criminals in R.B.I MANAGEMENT who
declared a good printing machine at nasik security press as scrap &
sold it to fake stamp paper king pin karim lala telgi It may be
possible that the criminals in the R.B.I MANAGEMENT selected
candidates who suited their criminal objectives. As a result there is
frequent occurrence of currency thefts & related
irregularities at R.B.I CURRENCY NOTE PRESS, mysore & salboni.
Hereby, i call upon the C.B.I to look into this matter.

Also, hereby i urge you to provide me justice by giving merit ranking
lists of all recruitments made from 1995onwards till date.
Specifically, for the above mentioned 4 posts in accordance with the
TRANSPARENCY /RIGHT TO INFORMATION ACT of government of india.

 

SATYAM CO FRAUD – ARE YOU SINCERELY READY TO CATCH TAX  THEIVES , CORPORATE CRIMINALS  ?  – AN  APPEAL  TO UNION FINANCE MINISTER & KARNATAKA STATE FINANCE  MINISTER 

 


Corporate  fraud is nothing new to india    , satyam company is just a
new addition to it. Satyam co was able to commit such a huge fraud &
keep it under wraps for years goes to prove the honesty , integrity of
our public servants , government officials belonging to SEBI , RBI ,
tax dept , pollution control , labour  depts. , etc & the honesty of
auditors & company secretaries. Ofcourse , still there are few honest
people in public service , auditing & company secretaryship , but
majority of them are hand in gloves with corporate criminals.
Definitely , this fraud will also be brushed under the carpet after
certain time as other frauds happened , afterall these frauds are the
money spinners for political party funding , mafia , underworld &
other criminal activities. 

In india , tax compliance is worse. In our criminal justice system,
there is rigorous imprisonment for a pick-pocketer stealing Rs.10.
even the authorities spend thousands of rupees in legally prosecuting
him & the thief spends a year or more as punishment behind bars. Where
as there is no commensurate investigation nor  legal prosecution nor
punishment  for corporate thieves , evading tax to the tune of crores
of rupees. In contrast, those tax thieves pay a part of that booty to
the ministers & political parties and get crores of rupees tax
exemptions , incentives from the government. Government is rewarding
corporate criminals.
The tax officials of central & state governments
are hand in glove with these corporate criminals & traders. For a
price, they are helping corporates & traders in evading tax. Most of
the tax officials are wealthy & leading luxurious  lifestyles , much
beyond the scope of their legal income. The black money thus generated
every year by tax evasion , is many times more than our total annual
budget allocation. As a result, all our fiscal reforms fail &
inflation is soaring. This black money is the source of illegal
funding of political parties , terrorist outfits & underworld. It is a
greater threat to national unity & integrity.
Both the central government & karnataka state
government  have failed to collect the full , actual tax dues from
corporates & traders. As a result , the governments don’t have enough
money in their coffers  even to provide basic needs like health care ,
education , safe drinking water , etc to the poor & needy. For every
Rs.100 tax evaded , one poor patient is dying without medical care ,
10 poor persons lack education , 100 persons don’t get safe drinking
water , 100 persons barely survive on a single piece meal per day , 20
persons starve. Most of The government officials , ministers &
people’s representatives who have deliberately failed in their duties
of tax collection & welfare of poor citizens , SHAMELESSLY indulge in
luxurious lifestyle at the expense of poor tax payer . they live in
paltial bungalows , chauffer driven AC cars , all living food expenses
paid by exchequer , dine at 5-star hotels , only drink bottled mineral
water ,  eat non-vegetarian dishes , drink alcohol  sitting before
mahatma gandhi’s photograph & preaching mahatma’s ideals. Mahatma
preached & practiced simple living , vegetarianism & he was teto
teller , he paid for his expenses from his earnings . these public
servants are parasites , who are making merry at the expense of tax
payer.
Some non government organisations ( NGO) have
formed trusts and under the aegis of those trusts are running
educational institutions , hospitals , community halls , etc , in the
name of providing free / subsidised services like education , health
care , etc to the poor. It is only in record books , they conduct fake
medical camps , self employment training camps . in practice they are
running these educational  institutions , hospitals & community halls
as commercial enterprises & collecting huge fees. they are not even
remitting full fees collected to the trust account & swindling the
money. no outsider is allowed to become a member of these NGOs , only
their cronies & their family members are in these trusts.
Numerous NGOs promoted by religious bodies , mutts
are swindling public & government money to the tune of crores of
rupees. Nobody dares to question  the heads , pontiffs of these
mutts , as at his feet VVIPs , ministers fall down. These religious
bodies are hot beds of fundamentalism , terrorism  & mafia.  Hwere is
the accountability of religious bodies & political parties in in
india ?
Inspite of bringing specific cases to the notice
of authorities , they are mum ? hereby , E-VOICE OF HUMAN RIGHTS WATCH
offers it’s services ( subject to conditions ) to the governments of
india & karnataka , in apprehending the criminals – tax evaders. Are
you ready?

 

MEGA FRAUD  BY  GOVERNMENT OF INDIA – Rs 85 000 crore tax arrears  waiver   +  non performing assets of  banks to the tune of Rs. 200 000 crore
–         An appeal to Honourable Supreme Court of India 

 

India has become an IT power , taken giant strides in the field of
science & technology. More & more MNCs are investing in India. However
due to our skewed , corrupt economic system , lack of accountability
on the part of corporates & public servants – a wide chasm has been
created between the ultra rich & the poor , the fruits of development
has all been usurped by the rich & mighty. This is the basic reason
for growth of black economy , growth of  naxalism , terrorism &
underworld in India. As per a recent study by UN organization ,
majority of Indians ie more than 50 crore Indians are barely
sustaining on Rs.13 per day earnings , a whole family depends upon Rs.
13 , they are struggling to get just single meal per day. People are
starving to death , farmers are committing suicides , people are
selling their own children for a bag of grains. Whereas , corporate
biggies , public servants are leading luxurious lifestyles , having
big parties full of  drinks , non-veg foods not at their papaa’s
expense but at the expense of public exchequer , out of the tax dues ,
loan repayments cheated to the public exchequer. 

The banks insist on matching collateral security  even for self
employment / educational loans by poor for an amount of Rs.5000. if
the loans are not paid in time , rowdies / recovery agents are sent by
banks to collect the amount by muscle power. As a final step , banks
auction-off properties of collateral security to recover it’s dues.
Even, the tax authorities mercilessly extract tax dues to the last
penny from the middle class. 

The same banks, overestimate the project cost of corporates ,
overestimate the project feasibility & it’s worth and coolly extend
hundreds of crores of rupees loans without matching collateral
security. The banks extend overdraft facilities without matching
collateral securities , to these corporates. When loans are not
repaid, no rowdies are sent by banks. The promoters , directors of
such tainted corporates drain – off the companies resources cunningly
through insider trading , finally making the company sick. Such
companies don’t pay taxes , electricity bills , water bills , etc
properly to respective authorities. The authorities are deaf , dumb &
blind to all these actions of  such corporates. At the end , banks
write-off such loans as non performing assets (NPA) & file case before
courts for recovery of dues. Even if the properties of collateral
security are auctioned-off  dues cann’t be fully realized. Finally
public money is swindled . ALL THIS IS POSSIBLE  DUE TO THE CONNIVANCE
OF KEY BANK OFFICIALS , TAX OFFICIALS WITH CRIMINAL CORPORATES SINCE
THE INCEPTION OF SUCH COMPANIES . THIS ALSO POSES UNFAIR COMPETITION
TO HONEST CORPORATES. How to stop this ? by making corporate
accountability ,accountability of bank , tax officials more stringent
with penal provisions . afterall , they are playing with public money
not their papa’s property. 

Already , by the connivance of public servants , bank , tax officials
we have witnessed many scams like harshad Mehta , ketan parekh ,
hawala , etc and  more than Rs. 2000000 crore NPAs are on the books of
the banks. Now, the government of India is planning to waive-off tax
arrears of corporates to the tune of Rs.85000 crore , why ? read
vijaya Karnataka kannada daily dated 04th January 2007. just look at
this in the backdrop of “QUESTIONS FOR MONEY BY SOME MPs” and “MP
LOCAL AREA DEVELOPMENT FUND ALLOCATION FOR A PRICE SCANDAL”. The
government is always unresponsive , careless towards  the sufferings
of poor , however it is always on toes to help out corporates that too
criminal ones but not honest corporates. Why ? 

HRW has extended it’s services to GOI months back itself , to
apprehend tax thieves , till date there is no reply from GOI , why ? 

Hereby , E-VOICE OF HRW requests the Honourable Supreme Court of India
to order GOI , 

1.      to make necessary amendments to companies act , to make the
promoters , directors of the corporates personally accountable for all
their actions.
2.      to constitute committees consisting of public persons with powers
to scrutinize & verify all the actions of corporates for insider
trading  like – selling products , materials  , shares to their sister
concerns at discounted prices  or buying products , materials  ,
shares from their sister concerns at inflated prices or  lending loans
at discount rates to their sister concerns or taking loans from their
sister concerns at high rate of interest or loaning materials ,
machines to their sister concerns , etc.
3.      to constitute committees consisting of public persons , to
scrutinize & verify the annual personal tax returns filed by key bank
officials & tax officials , who have amassed riches & leading
luxurious life styles much beyond the scope of their legal known
sources of income.
4.      to recover all tax dues , loan dues , etc from the corporates from
the personal properties , wealth of promoters , directors of such
companies.
5.      to put behind bar the key bank officials who have helped the
corporates in swindling public money by overestimating project
viability , worth and by overlooking the insider trading of promoters
and still extending loans to them.
6.      to put behind bars tax officials who have helped such corporates
in  swindling public money.
7.      to take all the necessary help from public like as services
extended by HRW in apprehending tax thieves.
8.      to recover & protect public money at any cost.
9.      to confiscate all money , properties possessed by directors of such
criminal corporates  & properties of corrupt bank , tax officials ,
public servants.
10.     to declare illegal black money kept by corporate criminals ,
politicians , etc in the banks of tax haven countries like Trinidad ,
Mauritius , Switzerland , etc as national property of India , as
public property of government of India & to secure that money to
Indian exchequer. 

 

QUESTIONS FOR MONEY – PARLIAMENTARY ACTS  & LEGISLATIONS  FOR  ????                                                                             –  improper functioning of democracy in india 

 

    the vohra committee report has proved the criminalisation of
politics in india. There are many number of criminals in the
parliament & state legislatures. Some of those criminals are cabinet
ministers as well as members of vital parliamentary committees.
Thereby, they are in a position to manipulate , enact laws favouring ,
benefitting the criminals their cronies. 

    Just see how the GOI gave export incentive of Rs.1800 crore to
reliance petroleum although it didn’t even export a barrel. Reliance
infocom & tata teleservices were CDMA mobile service providers & have
paid license fee of few crores only equal to landline fees without any
competitive bidding . They were supposed to provide mobile service to
operate like fixed phones within a radius of 40k.m. however they were
providing service like mobile service from one state to another like
GSM mobile service providers. By this act of RIC & TTSL , the GSM
providers who have paid thousands of license fee in competitive
bidding were economically hurt , the dispute went to court. The court
was on the verge of pronouncing it’s verdict awarding damages worth Rs.
18000 crore to GSM players & Rs. 3000 crore of license fees with
penalty to GOI. The government announced a unified telecom license
regime with retrospective effect. Thereby, the GOI lost thousands of
crores of rupees & the share holders of GSM players lost thousands of
crores. Onceagain the RIC was charged by PSU bsnl THAT RELIANCE IS RE-
ROUTING INTERNATIONAL CALLS AS LOCAL CALLS & SWINDLING THE GOI. This
time too, GOI bailed it out. during the dispute between ambani
brothers the younger ambani mr. Anil ambani director of reliance
himself has stated that for the favours received from the GOI , the
company gifted some shares to then IT & COMMUNICATIONS MINISTER mr.
Pramod mahajan. 

   Various indian & multinational companies are looting indian
exchequer to the tune of thousands of crores of rupees , through
lobbying / bribing. Take the recent case of allotment of 3G spectrum. 

   In india, indirect democracy is the form of governance. In this
form, people’s representatives are bound to raise the questions ,
issues concerning their constituents on their behalf , on the floor of
the house. However the sad part in india even after 58 years of
democracy , is the lobbying is at it’s peak. The lobbying is a
gentleman’s white collared crook’s  way of forming favour seeker’s
group , creating a corpus to pay lumpsum bribe & influencing decision
making.
The people’s representatives are bound to represent their people
first , then their party & party think tanks. India has come to this
sorry state of affairs , widespread corruption , huge black economy &
rampant poverty, all due to inefficient legislations & enforcements.
These think tanks & IAS lobby, consider themselves as most super
brains on earth & gives out suggestions . the present state of affairs
is a barometer of their brilliance. These think tanks & IAS lobby are
the hand maidens of lobbyists / bribers. 

 

THREAT TO INDIA’S SECURITY BY CORPORATE CRIMINALS
– An appeal to honourable prime minister of india & honourable chief
minister of karnataka 


In india , since ages certain section of people – dalits , tribals are
being oppressed in the name of caste by forward caste people. The name
sake independence has not changed the lives of dalits & tribals. The
upper caste people were in control of government & economic sector
before independence as well as after independence too. The upper caste
people are now MPs , MLAs & are running businesses . they have framed
rules , laws to suit their ends. They are getting bank loans ,
subsidies , tax cuts , etc , by greasing the palms of those in power –
their own caste men. The reservation policy is just a vote winning
gimmick of forward caste politicians , it is neo divide & rule policy.
Only few dalits with money & contacts have benefitted , by the
reservation policy of government. Majority of them are still
sufferring from utter poverty & social oppression.
Now, due to rapid industrialisation & globalisation a new economic
divide has taken place – rich & poor , haves & have nots. Now,
economically poor are also being oppressed along with dalits. The
forward caste people in government have framed laws to suit their
ends , they have provided concessional priority loans , tax cuts ,
subsidies , etc from the government to corporate sector . The
corporate sector has demanded & got monetary benefits , infrastructure
facilities from the government . however the same corporates , MNCs
are violating statuotary laws & are averse to social welfare measures
of the government . they are averse to provide jobs to dalits ,
tribals & poor , why ? these corporates are bribing the labour , tax
department & other government officials . as a result the government
is loosing tax revenues to the tune of thousands of crores every
year , the government doesn’t have money to provide social welfare
measures to common people. The lives of common people are under
threat. Now,
the number of common people dying due to starvation , lack of health
care is more than in a war field. The threat to unity & integrity of
india is more from the corporate sector than pakistan or china.
Now, the government of india & other state governments are literally
under corporate control. we have brought to the notice of government
cases of statuotary law violations by various corporate entities ,
till date no action has been taken. Why ? hereby , we once again
offers it’s conditional services to the government of india &
karnataka in apprehending corporate criminals , corrupt tax , labour ,
pollution control board offricials. Are you ready sir ???? 

 

Black money in foreign banks amounts to plunder of nation: Supreme Court

 

Black money stashed away in foreign banks is not just a case of tax evasion, it is “mind- boggling crime” amounting to “theft and plunder of national wealth’’, the Supreme Court said on Wednesday.

In a frank message to the Union government, the court wanted it to realise the gravity of the issue. “We are talking about mind-boggling crime. We are not on the niceties of various treaties,’’ a bench of justices B Sudershan Reddy and SS Nijjar told solicitor-general Gopal Subramanium.

Earlier, the government had contended that money in foreign banks was a case of tax evasion and it cannot make public the names of Indian account holders.

“The authorities have to go on the basis of mutual agreement with various countries where the money is stashed,’’ Subramium said.

“This is the problem worrying us. It is not only about tax evasion and has something more,’’ the bench said after it was pointed out that the source of the money could be narcotics, terror fund or arms dealing.

The court was hearing a petition filed by noted criminal lawyer Ram Jethmalani and some retired bureaucrats and police officers.

 

 

Standard Chartered tries to cover up its messy past, but SEBI is in a slumber   

 Standard Chartered Bank’s draft red herring prospectus to raise $500 million-$700 million through the first-ever issue of Indian Depository Receipts (IDRs) has completely blanked out at least 15 litigations pending against it in connection with the securities scam of 1992 and a foreign exchange scandal involving the misuse of its vostro account, also in the 1990s.

 

The prospectus has reportedly been cleared by the Securities and Exchange Board of India (SEBI), which is fully aware that most litigations pertaining to the 1992 scam are still dragging their way through the Indian judicial system. It is shocking that the Bank has attempted to avoid disclosure, given that the Bank’s deep involvement in the scam is widely known in India and the IDRs are being sold to Indian investors. What is worse, when asked about the failure to disclose litigation pending against the Bank, SEBI has chosen to not to respond to the emails marked to the entire top brass of the Bank.

 

On checking with the Bank, Arijit De, head of external communications, has this to say: “With reference to your email to Neeraj Swaroop, our response is as below: The IDRs represent the shares of Standard Chartered PLC, UK , the ultimate parent company of Standard Chartered Bank, India. In accordance with the disclosure requirements under SEBI Regulations, IDR Rules, other applicable laws and international practice, SC PLC has made appropriate disclosures of all material issues in the draft offer document filed with SEBI. We have nothing further to add beyond what is disclosed in the DRHP.”

 

However, a simple reading of page 414 of its draft red herring prospectus suggests otherwise. It says: “As of the date of this Draft Red Herring Prospectus, neither the Company, any member of the Group, any Director, or any material associate of the Company (emphasis ours) are involved in any material governmental, legal or arbitration proceedings or litigation and the Company is not aware of any pending or threatened material governmental, legal or arbitration proceedings or litigation relating to the Company, any member of the Group, any Director or any material associate which, in either case, may have a significant effect on the performance of the Group, and there are no liabilities or defaults (including arrears and potential liabilities) in relation to such material proceedings or litigation which would be required to be disclosed under the SEBI Regulations.”

Moreover, the cases filed by the Enforcement Directorate and in the Special Court do not all pertain to the Indian operations (the Bank’s Indian operation itself is significantly large and important, especially after the impact of the global financial crisis). In fact, many of them specifically name a former chairman of the Bank, Rodney Galpin.

 

Among the cases that we have information about include some in the Special Court set up to try the securities scam related offences (MA 365/2003 – SCB v/s the Custodian & others; Suit 45 of 1995 SCB v/s Andhra Bank; Suit No 6 of 1994 SCB v/s Andhra Bank and Suit No 32 of SCB v/s Andhra Bank). Then there are at least half a dozen cases filed by the Enforcement Directorate, many of them in 2002. We have sent a list of all these cases to SEBI, but have no response from the regulator.

 

Are these cases serious enough to make a difference to the Bank’s global operations and performance? Probably not. Also, many Indian companies have successfully raised funds, even after disclosing that the main promoters were accused of murder or worse. The issue is the Bank’s lack of transparency, while selling a financial instrument to Indian investors.

 

What is worse, the failure to insist on this disclosure reflects even more badly on the market watchdog. In its very first IDR clearance, SEBI has shown that it is probably overawed with the international bank’s plans to raise funds in India or its fat, 801-page offer document. Either way, it is not insisting on the same transparency and disclosure standards that it expects from Indian companies, which should be a matter of serious concern, given that global banks have not covered themselves in glory in the lead-up to the financial crisis of 2008. — Sucheta Dalal

 

Too many loopholes

Anand Adhikari        

 

 

Hidden-camera videos of the country’s three leading private banks’ officials allegedly advising customers on money-laundering recently kicked up a storm. Heads have started to roll at the junior levels in these banks – ICICI, HDFC and Axis. But punishing wrongdoers is unlikely to stem the irregularities. A commenter on Cobrapost.com, the Delhi-based website which conducted the sting, hit the nail on the head. He said the problem was not just these three banks – it was that the entire system was riddled with loopholes. “It’s a good opportunity for the regulators to plug these loopholes,” he wrote.

He pointed to the multiplicity of acceptable identity documents – for instance, the PAN (permanent account number) card, passport and Aadhaar unique identification (UID) number – and the fact that none of them are interlinked. “It’s a real pity for a country which produces some of the best IT talents in the world,” he added. Contrast India with the United States, where social security numbers are in place since 1935.

 

There are numerous problems at multiple levels – the industry regulator, the government, and the banks themselves. At the level of the bank, the core issue is the approach to banking, as banks are caught up in an aggressive sales culture. The ones named in Cobrapost’s allegations have said they do business ethically. However, all three declined to speak to Business Today until they had investigated the matter fully.

At the level of the regulator – the Reserve Bank of India (RBI) – there is an urgent need to improve the frequency and quality of inspection. More importantly, there is a need to overhaul Know Your Customer (KYC) norms for financial intermediaries such as banks, non-banking financial companies (NBFCs), insurers and mutual funds.

And at the government level, there is a need to speed up Aadhaar – the national unique identification (UID) number project – as it would eliminate the multiplicity of documents.

The central bank’s KYC guidelines require banks to collect three documents – photographs, identity proof, and address proof – from customers before they can open an account or get a locker. If a customer has no UID number, the bank has no option but to accept documents such as voter ID, electricity bill, passport, or PAN card.

“The root cause of many of the problems today is the multiplicity of enforcement agencies, array of regulations and variety of documents for the identification of a single person,” says Pavan Kumar Vijay, Managing Director of Corporate Professional Group, a corporate advisory firm.

The Cobrapost videos show bankers asking for easily available KYC documents, and, in some cases, even advising customers not to submit a PAN card so they can stay off the tax radar. Bankers say some customers get away with submitting a lease agreement and rent receipts as address proof. “These are the most suspect cases, where the bank should do a ground check or periodically re-check whether the customer still has the same residence or job,” says the chairman of a public sector bank.

 

Some banks accept a company ID card as proof of identity, and a letter from an employer as residence proof. That is in line with RBI guidelines, but banks are also required to update the customer data from time to time. But many bankers say these checks get short shrift, as the bank is focused on attracting new customers.

“The problem is not with the KYC, but its implementation,” says M.D. Mallya, who recently retired as Chairman of the state-owned Bank of Baroda. He may be right, as the genuineness of even crucial government-issued documents is not always above quest ion.

According to the Comptroller and Auditor General (CAG), there were close to 96 million PAN cards as of March 2010, but only 34 million tax returns were filed.

The PAN card is one of the most abused documents. The CAG noted in 2010/11 that big tax evaders spread out their money by opening multiple bank accounts with fake PAN cards. Tackling PAN card fraud is not enough, though. The Income Tax Act allows those who claim not to have a PAN card to fill out Form 60 and say they have no taxable income, or Form 61 to say their income is from agriculture. A Cobrapost video shows a banker allegedly advising an undercover re-porter to fill out Form 60 to avoid detection by tax authorities.

So just by filing Form 60 and without submitting a PAN card, a tax evader can deposit cash of over Rs 50,000 in a bank or post office, no questions asked. According to banking industry sources, the RBI and the finance ministry are investigating cases in which banks have not reported transactions backed by Form 60 or 61 to the government’s Financial Intelligence Unit (FIU).

Finance Minister P. Chidambaram

Eventually, Aadhaar will resolve the KYC issue. But until that happens, some argue, it is impossible to require just one or a few documents as acceptable proof of identity and residence. “There is the issue of financial inclusion, or people having different sets of documents,” says a banker from one of three banks named by Cobrapost. He adds that some people genuinely do not have taxable income, many do not have a passport, and for some, the only address proof is an employer’s letter.

 

“Banking is a serious business where service, compliance and safety are core elements,” says A.K. Khandelwal, former Bank of Baroda chairman and author of the book Dare to Lead. But private banks have a strong culture of cross-selling their subsidiaries’ products, and increasing the number of savings and cur rent account deposits.

“Nurturing an ethics-based corporate culture, with provisions to claw back performance-based incentives… can help correct the current approach of mobilising fresh business by any means,” adds Khandelwal.

The Cobrapost expose shows bankers allegedly marketing insurance products to convert black money into white. Insurance products are profitable, because the bank earns a high first-year commission on the premium. The bank manager could benefit, too: many banks and insurers offer rewards for high sales, such as foreign junkets.

Insurance products are easy to sell. The bank’s KYC requirements are sufficient proof for investing any amount in an insurance scheme. A PAN card is not necessary, even though some single-premium policy amounts are as high as Rs 30 lakh. Many banks sell policies that mature after seven years. At that point, nobody can question the source of the money, because income-tax laws do not require banks to keep records for more than seven years.

 

RBI Governor D. Subbarao

Cobrapost has also alleged that the three banks have been laundering money. Money-laundering means the transfer of money from illegal sources – drugs and arms trafficking, terrorism, extortion and theft – into the financial system through fictitious bank accounts and hawala transactions. Cobrapost alleges that the banks suggested opening accounts in the name of the applicant’s spouse, cousin, or friend, which is not money-laundering in the strict sense.

By law, bank employees have the authority to ask a customer for details of transactions that are not consistent with the customer’s profile. The onus is on the bank to ensure that the account is not being used to launder money. Insurance companies, too, are required to report cash transactions of over Rs 10 lakh a month to the FIU.

Following Cobrapost’s allegations, the RBI and the Insurance Regulatory Development Authority are investigating KYC violations and the background of customers who have put large sums into singlepremium insurance plans. ICICI Bank’s life insurance arm has launched a probe, too.

Some in the industry say the FIU is seeking details of policy holders with high-value single-premium policies. The RBI, too, is investigating high-value transactions. “If there is a series of cash transactions valued at Rs 10 lakh or more in a month, they need to be reported under AML,” says a public-sector banker on condition of anonymity. AML refers to anti-money laundering rules.

Banks are required to report demand drafts, mail transfers and travellers’ cheques worth Rs 50,000 and more to the RBI. A source in the central bank says: “The investigation will also look at the extent of complacency shown by the top management of these banks.”

Some bankers argue that it would be unfair to blame the top management of the three private banks that Cobrapost has named – the country’s largest in terms of market capitalisation. ICICI and HDFC have nearly 3,000 branches each, and Axis Bank has close to 2,000. The Cobrapost investigation covered some 50 branches. All three banks have comprehensive codes of conduct for employees. For example, ICICI Bank, with a balance sheet of Rs 5 lakh crore, has a detailed manual outlining due diligence for accepting a customer.

A day after Cobrapost published its investigation, ICICI and HDFC banks appointed audit firm Deloitte Touche Tohmatsu to carry out an independent forensic enquiry in addition to their own internal investigations into Cobrapost’s allegations. The stock market has reacted, too: the banks’ stocks have fallen more than the BSE Sensex.

“The RBI may also put the brakes on new branch licences to some banks,” says Kashyap Jhaveri, analyst at Emkay Global Financial Services, in a recent report. An analyst who manages the money of foreign institutional investors says the probe could expand to other banks. A Goldman Sachs report notes: “These developments, if proven true, could potentially lead to slower growth across private banks’ deposits and business.”

The RBI’s deadline for a scrutiny of the head office and branches of the three private banks is March 31. The central bank is also studying whether the banks’ gold coins and wealth management products could be potential ways to stash black money. RBI Deputy Governor K.C. Chakrabarty has downplayed the expose, saying: “If we find there is a need to further tighten any guidelines, we will do that.”

Some in the industry say that Finance Minister Chidambaram’s estimate that 46,800 people have taxable income of over Rs 1 crore is baffling, considering the growth of banks’ wealth management services and the portfolio management services of mutual funds and brokerages.

In addition to being the government’s debt manager, the RBI manages the country’s monetary policy, and supervise and regulate banks. “There is a strong case of hiving off the banking supervision from RBI,” suggests a banker.

The number of bank branches in the country has grown to 80,000. The RBI has some 20,000 employees, of which one-third are maintenance and technical staff. Some bankers question, however, whether adding layers of people will improve the situation.

Former RBI governor Bimal Jalan says: “We should learn from the current experience and see how we can improve our ethical governance system in implementing the banking guidelines.”

There is also the issue of black money – estimated at Rs 10-15 lakh crore – being generated in the first place. It is common knowledge that much of it is stashed in other countries. The Cobrapost sting has highlighted that banks, which are highly regulated, seem to be doing little to bring tax evaders to book at home. It is anyone’s guess what goes on in more loosely regulated financial intermediaries such as co-operative banks, NBFCs and credit societies.

 

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