Scam After Scam In Banks

Only a few days ago we came to know Rs.6000 crore forex fraud in which huge amount of Indian money has allegedly been remitted to foreign banks in the name of various fake companies and that through Bank of Baroda branch situated in Delhi. It is also informed that 32 banks were indirectly involved in such remittances .None of banks could detect it and if detected , none of them had courage to point it out or reveal the face to RBI and Government of India. this is India where telling truth is treated a crime and person who is indulged in crime gets appreciation, promotion and elevation from all . This is why fraud cases go unnoticed
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Another fraud of bill discounting came to light in the same fortnight when fake bills or say accommodation bills have been discounted by one of branches of Bank of Baroda and it is now difficult to recover Rs.350 crore from the company which committed fraud with bank.

Latest news is that The Enforcement Directorate has unearthed one more forex scam. This time it involves a total of 7 banks including Oriental Bank of Commerce , Axis Bank , ICICI , IndusInd , Kotak Mahindra , DCB , Dhanalaxmi Bank. The ED has arrested one Manish Jain under the Prevention of Money Laundering Scam. Jain transferred more than Rs 500 crore through 70 fake bank accounts. Jain was also sending money in the garb of imports and exports. He used to send money to Hong Kong in HSBC Bank and further to China. The money was remitted out of India illegally against the imports which actually never took place.

Last year also fraud through remittances involving many bank amounting to Rs.150000 crore was unearthed. We are also aware of global forex scam involving Rs.36000 crore of rupees.

In last year we came across so many cases of bribe led lending, creation of term deposit by illegal withdrawal of huge fund fro government accounts, cases of submitting fake fixed deposit receipts, cases of lending based on fake title deed etc .

We all know that all buy and sell of real estate properties take place with the help of black money and we all know how huge amount of stamp duty is thus saved by buyer and seller of properties in addition to using ill earned money called as black money to convert into white money.

Inspite of all guidelines on KYC , thousands of fake accounts are opened daily, thousands of fake companies are registered daily with Registrar of Companies and hundreds of ways are used to save taxes with the help of Chartered Accountants and tax officials. Without the help of bankers, government officials and CAs , creation of fake companies, opening of fake accounts and remittances to fake companies abroad or evasion of taxes is not possible.

We also remember how Harshad Mehta during eighties cheated banks , almost all big banks by submitting fake receipts of hundreds of crores of rupees. We also remember stock scam committed by Ketan Parekh.

We also remember LIC housing loan scam unearthed in nineties. We know how management of bank use window dressing to inflate deposits and advances and how they book artificial recovery to get appreciation from Ministry of Finance . It is also an open secret that banking channels have been used for decades to remit black money to foreign countries.

We have seen how weakness of many public sector banks due to load of bad loans have gone beyond the control of RBI and GOI. We also know how the tool of restructure and ever greening have been used largely by banks to conceal their bad loans. We also know how lacs of crore of rupees have been sacrificed by banks in write off of loans and write off of fraud oriented losses. If all losses are added together, the total volume will perhaps exceed total of all other frauds occurred in free India.

All politicians know it and almost all of them use this illegal money to enhance their political fate. Government of India always come out with a guideline after an exposure of each scam , RBI threaten to take punitive action against erring officials , committees are set up to look into the matter and so on.

But on real ground level, no improvement has ever taken place. The culture of fraud , culture of submission of false certification of good health and compliance of laws, culture of flattery , culture of bribery and culture of protecting evil persons and awarding good workers has become the lifeline and accepted norms of the system.

God knows when and how there will be change in culture and real improvement in health of banks. I know that if there is a will there is a way. Until there is a strong desire in the minds of rulers it is not possible to visualise any drastic change in the system in short run.

New Income Tax rules regarding form 15G and 15H

New Income Tax rules regarding form 15G and 15H

CBDT has notified the new Income Tax rules regarding form 15G and 15H.Under revised rules few conditions regarding submission Form 15G & 15H has been relaxed. As per new rules an eligible person may file form 15G and 15H in paper as well as in electronic mode. This is an enabling provision under the act, and you may file online 15G and 15H after deductor like banks provide such facility on their online websites to their customers so that customers may furnish Form 15G /Form 15H.It may take some time as CBDT has not given sufficient time for making changes in system.
Further, now no need to submit physical copy to Income tax office by deductor also. Till September, 2015 all the declarations received during the month were required to be submitted to within 7 days to office of the commissioner/Assistant commissioner having jurisdiction to that office. Now Declarations received in October will not be required to be sent in November,2015 and this will save wastage of papers.
The new Forms and Procedure have following main features .The revised procedure shall be effective from the 1st day of October, 2015.
For person seeking non deduction/Deductee/Income receiver Eligible Deductee may file form 15G/15H in paper (in duplicate- one copy for acknowledgement) or electronically.
·         Pan is must to submit form 15G/15H.
·         Only Resident can submit form 15G/15H

In form 15G /15H person have to provide details of Income for which form 15G/15H has already been submitted. For person accepting the Form 15G/15H/Deductor /Payee, he should check whether person providing the form is eligible to submit form or not according to particulars submitted by the person ( This is major responsibility to check the details furnished by the person ) .Pan number is to be verified.( PAN is required to be checked by the deductor) . Deductor/payee after verification shall issue a Unique identification number on form 15G/15H .UIN should be separate for each type of form. The forms received in a particular quarter is required to be reported in quarterly ETDS return even if there is no deduction in that quarter.( Branches were not raising flag where form 15G/H were given and now this will be must)

No need to submit physical copy of form 15G/15H to income tax department. Deductor shall retain the form 15G/15H for seven years.( Proper filing will be needed up to 7 years and Bank should instruct not to destroy these form till the end of 7 years ) Income Tax department has issued a Press release on the subject as under Subject: Simplification of procedure for Form No.15G & 15H – regarding
Tax payers seeking non deduction of tax from certain incomes are required to file a self declaration in Form No. 15G or Form No.15H as per the provisions of Section 197A of the Income-tax Act, 1961 (‘the Act’). In order to reduce the cost of compliance and ease the compliance burden for both, the tax payer and the tax deductor, the Central Board of Direct taxes has simplified the format and procedure for self declaration of Form No.15G or 15H. The procedure for submission of the Forms by the deductor has also been simplified.
Under the simplified procedure, a payee can submit the self-declaration either in paper form or electronically. The deductor will not deduct tax and will allot a Unique Identification Number (UIN) to all self-declarations in accordance with a well laid down procedure to be specified separately. The particulars of self declarations will have to be furnished by the deductor along with UIN in the quarterly TDS statements. The requirement of submitting physical copy of Form 15G and 15H by the deductor to the income-tax authorities has been dispensed with. The deductor will, however be required to retain Form No.15G and 15H for seven years.
The revised procedure shall be effective from the 1st day of October, 2015.
FAQ
What is Form 15H & 15G ?
Form 15G-15H and Income Tax forms which required to be submitted by Specified person earning a specified income to payer for Non deduction of tax at source.
Who can submit form 15G ?
First and foremost only a person who is resident in India can submit form No. 15G. So an NRI cannot submit this form. Any person other than a Company/Firm can submit form No. 15 G. So any Individual and HUF can submit form No. 15G.( Person does not means an individual but it it is defined otherwise)
However it is not that every Individual or HUF can submit form No. 15G. Only the individual or HUF, whose tax on the estimated income for the year is nil and the amount of interest income from all the sources does not exceed the minimum exemption limit, can submit this form.( Read carefully that there are 2 conditions)
So for being eligible for you to submit this form, you need to satisfy both the above conditions. In a situation where due to various deductions the tax payable on total income may be nil but if the total amount of interest income is expected to exceed Rs. 2.50 lakh then you cannot submit this form.
Who can submit form 15H?
Any resident Individual who is sixty years and above of age or completes sixty years during the financial year can submit form No. 15H provided his tax liability on the basis of his estimated income is nil for the financial year though the total amount of interest from all sources may exceed Rs. 3 lacs, the minimum amount liable for tax. So only senior citizens can submit this form. HUF cannot file this despite Karta may be a senior citizen.

What type of Income/sections under which Form 15G & 15H can be given?
Following sections/type of Income under which eligible person may submit form 15G /15H: Mainly these forms are furnished to non deduction of TDS by Banks/Other person on payment of Interest
Section 193 -Interest from Securities -Like eligible Govt /PSU bonds etc
Section 194-Dividends -Dividend from shares etc (presently exempted on receipt)
Section 194A-Interest other than securities -Like interest from Fixed deposit/from loan to other person
Section 194EE -Nation saving scheme (NSS)
Section 194DA: payment of Taxable Insurance maturity amount

Whether a Person without pan can submit Form 15G/15H ?
No, If person does not have Pan then he cannot submit form 15G and 15H and Tax shall be deducted on higher rate under section 206AA .Further if he has not submitted his pan on form 15G /15H or submitted wrong /incorrect pan on 15G /15H then also section 206AA higher TDS rate of 20% applicable.( Bank should check the correctness of PAN while accepting it)
Whether Non-resident person can submit form 15G/15H ?
NO
I do not have new form 15G or 15H. From where I may get it?
The form in word file are attached with sufficient number of column to accommodate number of receipts/RD accounts. Since the format is in word file, you may increase the columns.

Entry-level salaries in India are amongst the lowest in the Asia Pacific region

NEW DELHI: Entry-level salaries in India are amongst the lowest in the Asia Pacific region, a study by professional services firm Towers Watson says.

The average monthly starting pay in India is around US $400 (Rs 24,000), less than one-fifth of the equivalent paid in South Korea and Singapore, said the study by Towers Watson's Data Services.

Graduate Indian employees sit towards the bottom of the Asia Pacific countries in terms of starting salary, it said, adding that it augurs well for the 'Make in India' campaign as this would give the MNCs a competitive advantage over other Asia-Pac countries.

"Although dependent on prevailing exchange rates, the findings clearly highlight India's position as a competitive and attractive workforce and talent market," said Sambhav Rakyan, Data Services Practice Leader, Asia Pacific at Towers Watson.

Out of the top 11 Asia Pacific economies, the average monthly Indian starting salary was ranked ninth.

"The disparity in salaries also illustrates how a large knowledge pool and a significant cost arbitrage makes India a front runner in providing outsourced services. After achieving great success in IT/BPO, India can now become a natural choice for other sectors, like manufacturing," he added.

Further up the ladder, wages for experienced professionals at middle management levels in India are slightly more competitive, but still below their Asia Pacific peers.

Notwithstanding the recent push in its manufacturing sector and popularity of the IT sector, an engineering manager in India earns an average salary of USD 56,530 - almost half of his Chinese counterpart (US $112,070) and one-third of his Singaporean counterpart (US $151,168), the report said.

"Despite a common labour market in the region, it is striking to see how divergent guaranteed cash levels remain amongst top economies," Rakyan added.

OBC, IOB, YES Bank to be most affected by new base rate methodology

OBC, IOB, YES Bank to be most affected by new base rate methodology

The new proposed regime for calculating base rate, the benchmark rate for pricing loans, is going to affect the lenders with greater proportion of term deposits in their funding base the most, says a Moody's report.

As per the report, Oriental Bank of Commerce (OBC), Indian Overseas Bank (IOB), YES Bank, Canara Bank and Union Bank are amongst the ones that will be most affected. While OBC has 76 per cent customer term deposit to total deposit, IOB is at 75 per cent whereas YES Bank is at 71 per cent at the end of FY15.

"Because the latest interest rates on various deposits will be used to calculate the marginal cost of funds, banks with a greater proportion of term deposits in their funding base would likely be most affected. Because longer tenor deposits are less sensitive to decreases in policy rates, they tend to increase the cost of funds derived using current calculation methods," said the report.

In the last financial year, several public sector banks such as Bank of India, IDBI, State Bank of India, Syndicate Bank, Bank of Baroda have more than 55 per cent of customer term deposit to total despoits

RBI Press Release - Bank Holiday on Second & Fourth Saturdays

Bank Holiday on Second & Fourth Saturdays from September 1; RBI to offer its Support Services to Banks on Working Saturdays

All scheduled and non-scheduled banks – public, private, foreign, cooperative, regional rural and local area banks – will observe public holiday on second and fourth Saturdays from September 01, 2015; and will observe full working days on Saturdays other than second and fourth Saturdays (referred to as working Saturdays in the Press Release). Consequent to this, the Reserve Bank of India has announced the following changes in its functioning with effect from September 1, 2015:

I. Financial Market Segments

a) The financial market segments which are currently open for transactions on Saturdays will continue to remain open on all working Saturdays. That is,

    All money market segments, namely, call/notice/term money, market repo and Collateralised Borrowing and Lending Obligation(CBLO) will remain open on all working Saturdays as on any normal business day; and
    Forex market and Government securities markets, along with all OTC derivative markets would remain closed on all Saturdays, as hitherto.

b) The Reserve Bank will continue to operate fixed rate reverse repo as well as the marginal standing facility (MSF) windows on all working Saturdays between 7:00 pm and 7.30 pm as on any normal business day.

c) The Reserve Bank will also operate a fixed rate liquidity adjustment facility (LAF) repo window on all working Saturdays between 9.30 am and 10.30 am. The LAF repo window on working Saturdays would in fact be an extension of the Friday LAF window. That is, banks could borrow for three days on Friday, within the prescribed limits, and any residual unused limit could be utilised for a 2-day period on working Saturdays.

II. Payment Systems

    Payment systems will not be operated onsecond and fourth Saturdays but would operate for full day on working Saturdays. Payment systems typically includes Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT), Cheque Clearing operated by various Bankers' Clearing Houses in the country including the grid based Cheque Truncation System (CTS) and ECS suite [Electronic Clearing Service (ECS), Regional Electronic Clearing Service (RECS) and National Electronic Clearing Service (NECS)].

    Processing of future value dated transactions with value date falling on second and fourth Saturdays will not be undertaken under RTGS and ECS suite.

III. Banking Department

The Banking Departments in Regional Offices of the Reserve Bank will remain open for the full day on working Saturdays as required to support the functioning of the Financial Markets and the Payment Systems. Government business will be transacted at agency banks on working Saturdays.

It may be recalled that the Government of India issued a Notification on August 20, 2015 [published in the Gazette of India, Extra Ordinary, Part II, Section 3, Sub-Section (ii)] declaring every second and the fourth Saturday of every month as public holiday under Section 25 of the Negotiable Instruments Act, 1881 (26 of 1881). Accordingly, all banks whether or not included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934) will observe holidays on second and fourth Saturdays with effect from September 1, 2015. As a regulator of banks, financial markets and payment and settlement systems, the Reserve Bank has made supporting changes in the working of some of its operational areas.

The above arrangements would be reviewed after six months.

Alpana Killawala
Principal Chief General Manager

Press Release : 2015-2016/528