The World Opinion

Tag: Central Bank

  • RBI Revises Norms, Tells Banks To Hear Borrowers Before Taking Any Action | Economy News

    Mumbai: The Reserve Bank on Monday revised its master directions on fraud risk management to incorporate the recommendations of a Supreme Court judgment which asks banks to hear a borrower before an account is classified as fraud.

    The central bank said the three revised master directions on fraud risk management are principle-based and strengthen the role of the board in overall governance and oversight of fraud risk management.

    “The master directions now expressly require that the REs (regulated entities) shall ensure compliance with the principles of natural justice in a time-bound manner before classifying persons/entities as fraud, duly taking into account the Supreme Court Judgment dated March 27, 2023,” a RBI statement said.

    In the SBI versus Rajesh Agarwal case, an SC bench led by CJI DY Chandrachud batted for the rights of the borrower to be heard before an account is classified as fraud.”The principles of natural justice demand that the borrowers must be served a notice, given an opportunity to explain the conclusions of the forensic audit report, and be allowed to represent by the banks/ JLF before their account is classified as fraud under the master directions on frauds,” it had said.

    “Since the master directions on frauds do not expressly provide an opportunity of hearing to the borrowers before classifying their account as fraud, audi alteram partem (right to be heard) has to be read into the provisions of the directions to save them from the vice of arbitrariness,” the order had added.

    The RBI said the framework on early warning signals (EWS) and red flagging of accounts (RFA) has also been strengthened further for early detection and prevention of frauds in the REs and timely reporting to law enforcement agencies and supervisors.

    The central bank has also mandated data analytics and market intelligence units for strengthening risk management systems as part of the review, the RBI said. The directions also emphasize the need for instituting robust internal audit and control framework in the REs, it said.

    A total of 36 existing circulars on fraud risk management in the regulated entities stand withdrawn with the issue of the revised guidelines, it said, adding that the exercise has been carried out with the intent of rationalising the existing instructions and reducing the compliance burden on the REs.

  • RBI Fines Hero FinCorp Rs 3.1 Lakh For Violating Fair Practices Code | Companies News

    New Delhi: The RBI has announced on Friday that it has imposed a penalty of Rs 3.1 lakh on Hero FinCorp Limited for not complying with certain provisions of the fair practices code.The Reserve Bank clarified that the penalty is due to regulatory compliance issues and it does not affect any validity of transaction or agreement Hero FinCorp Limited has with its customers.

    The RBI conducted a statutory inspection of Hero FinCorp Limited based on its financial position as of March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the directions, it said. (Also Read: HDFC Bank Customers Alert! UPI, Net Banking, And Mobile Banking Services Will Be Down On THIS Date & Time- Details Inside)

    “After considering the company’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found, inter alia, that the … Charge against the company was sustained, warranting imposition of monetary penalty,” the central bank said. (Also Read: Google Infuses $350 Million In Walmart-Owned Flipkart)

    Hero FinCorp did not convey the terms and conditions of loans in writing to borrowers in the vernacular language understood by them, it said. The RBI also said imposition of the monetary penalty is without prejudice to any other action that may be initiated by it against the company. (With PTI Inputs)

  • Sri Lanka’s central financial institution raises key charges to curb inflation

    Sri Lanka’s Central Financial institution has raised its key rates of interest to fourteen.50% and 15.50% to check out to include inflation that has added to the rustic’s financial woes.

    Contemporary value hikes were a serious blow, particularly for the South Asian nation’s deficient and prone teams as they bear their nation’s worst financial disaster in reminiscence, suffering with acute shortages of necessities corresponding to meals, gasoline, cooking fuel, and drugs.

    The central financial institution mentioned it had raised its Status Deposit Facility Price and Status Lending Facility Price that it fees industrial banks through 100 foundation issues each and every to fourteen.50% and 15.50%, respectively.

    The financial institution mentioned it might wish to tighten its financial coverage additional to completely curb inflation, which rose to just about 55% in June.

    “Our precedence is to convey down inflation to no less than an inexpensive degree once conceivable. The earlier the easier,” mentioned the central financial institution governor, Nandalal Weerasinghe. He mentioned inflation may surge to 70%.

    Costs of maximum necessities have tripled in contemporary months and the the general public are suffering to pay for his or her elementary wishes.

    About 70% of Sri Lankan families surveyed through UNICEF in Might reported reducing again on meals intake. Many households depend on executive rice handouts and charitable donations.

    The central financial institution mentioned Sri Lanka’s economic system is estimated to have reduced in size 1.6% from a 12 months previous within the first part of 2022. Shortages of gasoline and electrical energy have crimped financial job in contemporary months.

    Because of the intense gasoline shortages, Sri Lanka has stored colleges close for weeks, whilst the federal government has requested state workers as opposed to the ones in crucial services and products to make money working from home.

  • Zimbabwe to introduce gold cash as native foreign money tumbles

    Zimbabwe’s central financial institution mentioned it might get started promoting gold cash this month as a shop of worth to tame runaway inflation, which has significantly weakened the native foreign money.

    The central financial institution governor John Mangudya mentioned in a observation on Monday that the cash will likely be to be had on the market from July 25 in native foreign money, US greenbacks, and different foreign currency echange at a value in line with the present global value of gold and the price of manufacturing.

    The “Mosi-oa-tunya” coin, named after Victoria falls, will also be transformed into money and be traded in the neighborhood and across the world, the central financial institution mentioned.

    The gold coin will include one troy ounce of gold and will likely be offered by means of Constancy Gold Refinery, Aurex, and native banks, it added.

    Gold cash are utilized by traders across the world to hedge in opposition to inflation and wars.

    Remaining week, Zimbabwe greater than doubled its coverage price to 200% from 80% and defined plans to make the USA greenback criminal delicate for the following 5 years to spice up self assurance.

    Hovering inflation within the southern African nation has been piling force on a inhabitants already suffering with shortages and stirring reminiscences of financial chaos years in the past below veteran chief Robert Mugabe’s close to four-decade rule.

    Annual inflation, which hit virtually 192% in June, solid a shadow over President Emmerson Mnangagwa’s bid to revitalise the economic system.

    Zimbabwe deserted its inflation-ravaged greenback in 2009, opting as an alternative to make use of foreign currency echange, most commonly the U.S. greenback. The federal government reintroduced the native foreign money in 2019, but it surely has impulsively misplaced worth once more.