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<ul><li>The State Bank of India overstated its profits by as much as ₹9,500 crore for three years in between 2012-13 to 2014-15, according<a href="https://www.moneylife.in/article/exclusive-rbi-inspection-reports-on-sbi-reveal-evergreening-window-dressing-cover-ups-and-worse/57631.html"> </a>an expose by Moneylife.</li><li>The revelations came out of a Right To Information (RTI) application.</li><li>The country’s largest bank has suppressed employee fraud, covered bad loans, flouted anti-money laundering rules, covered up bad loans by a mechanism referred to as ‘window dressing’.</li><li>In many cases, the bank has not enforced securities provided on a loan, and loans were disbursed even before a charge was created on the collateral.</li></ul> A fourth of the country’s bank deposits are making their way to State Bank of India (SBI). But, how safe is it there? According<a href="https://www.moneylife.in/article/exclusive-rbi-inspection-reports-on-sbi-reveal-evergreening-window-dressing-cover-ups-and-worse/57631.html"> to an expose by Moneylife</a>, the bank has overstated its profits by as much as ₹9,500 crore for three years in between 2012-13 to 2014-15. What makes it worse is that all this information is available with the banking regulator, Reserve Bank of India (RBI), and the dated details came out after a petition was filed under the Right to Information (RTI) Act, by an activist Girish Mittal. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.9960975000000001pt;border-right:solid #000000 0.9960975000000001pt;border-bottom:solid #000000 0.9960975000000001pt;border-top:solid #000000 0.9960975000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;">Year </td><td style="border-left:solid #000000 0.9960975000000001pt;border-right:solid #000000 0.9960975000000001pt;border-bottom:solid #000000 0.9960975000000001pt;border-top:solid #000000 0.9960975000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;">Overstated profit </td></tr><tr><td style="border-left:solid #000000 0.9960975000000001pt;border-right:solid #000000 0.9960975000000001pt;border-bottom:solid #000000 0.9960975000000001pt;border-top:solid #000000 0.9960975000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;">2012-13 </td><td style="border-left:solid #000000 0.9960975000000001pt;border-right:solid #000000 0.9960975000000001pt;border-bottom:solid #000000 0.9960975000000001pt;border-top:solid #000000 0.9960975000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;">₹1,220 crore </td></tr><tr><td style="border-left:solid #000000 0.9960975000000001pt;border-right:solid #000000 0.9960975000000001pt;border-bottom:solid #000000 0.9960975000000001pt;border-top:solid #000000 0.9960975000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;">2013-14 </td><td style="border-left:solid #000000 0.9960975000000001pt;border-right:solid #000000 0.9960975000000001pt;border-bottom:solid #000000 0.9960975000000001pt;border-top:solid #000000 0.9960975000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;">₹5,038 crore </td></tr><tr><td style="border-left:solid #000000 0.9960975000000001pt;border-right:solid #000000 0.9960975000000001pt;border-bottom:solid #000000 0.9960975000000001pt;border-top:solid #000000 0.9960975000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;">2014-15 </td><td style="border-left:solid #000000 0.9960975000000001pt;border-right:solid #000000 0.9960975000000001pt;border-bottom:solid #000000 0.9960975000000001pt;border-top:solid #000000 0.9960975000000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;">₹3,252 crore </td></tr></tbody></table> Source: Money Life There were two chairpersons running the bank during the period-- Pratip Chaudhuri was the chairman from 2011 to 2013 as Arundhati Bhattacharya too charge to stay on till 2017. SBI’s box of troubles The annual inspection of banks’ accounts by RBI has opened a Pandora’s Box where many evils came out—where the country’s largest bank has suppressed employee fraud, covered bad loans, flouted anti-money laundering rules, covered up bad loans by a mechanism referred to as ‘window dressing’, according to the report. An e-mail sent to SBI seeking answers on the revelations, did not elicit any response. Most Indian banks were found guilty of trying to hide the rising problem of bad loans. They would either give fresh loans to pay old ones or book the losses in a different year to soften the blow on the company’s financials. In SBI’s case, the RTI response reportedly revealed that these factors were seen in the loans given out to diamond trading and power sector. Loans to diamond traders have brought down banks, especially Punjab National Bank scam where diamantaire Nirav Modi made away with unpaid loans of ₹2 billion and is now in the UK. Yet, SBI is not in as much trouble, not from RBI who is aware of the situation, not from its 435 million customers --- that’s over 30% of India’s population! Like Goldman Sachs, it is everywhere and, probably, too big to fail. Flouting Norms The report says that the bank also flouted norms laid down by the Reserve Bank of India (RBI) itself with regards to Know Your Customer (KYC), lending limits set on sectors and individuals. The bank, as per the report, was also lax with its loans. In many cases, the bank has not enforced securities provided on a loan, wherein assets of defaulters are taken over. In some cases loans were disbursed even before a charge was created on the collateral. And, the suppression of data has happened at every level since most of the credit problems were never taken to the board as well. Scrubbing it clean In all, the bank performed a clean-up exercise every time a new chairman took over. The first year a new chairman comes in, huge amounts are written off the books, and has become a common practice with the bank. This leaves the chairman of the bank concentrating on ‘managing profits’. The owner of the bank however is the government. And it seems to be doing its part too. As non-performing assets as a result of bad loans increased and credit growth slowed down, the government is looking to recharge public sector banks (PSBs) with fresh funds. In the latest Budget 2019, the Finance Minister Nirmala Sitharaman said that they would be giving out as much as ₹75,000 crore to re-capitalise government banks, so that they can kickoff growth in the country, with renewed interest. The mistakes of the past have been conveniently forgotten. SEE ALSO 
 <div type="NEWSINCONTEXT" target="false" refhostid="261" refmsid="69557477" refmstype="2" refmssubtype="0"><cdata><![CDATA[An Indian bank is still making the same mistake of hiding the worst and hoping for the best]]></cdata></div>


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India’s largest bank was caught lying about its profits for 3 years but no one got punished, according to an expose

<ul><li>The income tax department of India recovered ₹ 548 million from the paintings owned by <keyword id="6242396" type="UNKNOWN" weightage="20" keywordseo="PNB-scam">PNB scam</keyword> accused Nirav Modi. </li><li>The department targeted a value of ₹970 million from the auction event held in Mumbai. </li><li>Camelot Enterprises, Nirav Modi’s company has filed a petition in the Bombay High Court for auctioning the paintings — calling the move unlawful.</li></ul>A few days ago, Punjab National Bank(PNB) scam accused Nirav Modi was arrested in London. The income tax department of India, today, auctioned the seized artwork paintings at the Saffron Art Gallery in Mumbai. <a href="https://www.indiatoday.in/india/story/nirav-modi-paintings-go-under-hammer-fetch-over-rs-54-crore-for-income-tax-department-1487311-2019-03-27">According to media reports</a>, the government recovered nearly ₹548 million by selling 55 of the 68 paintings during the bidding session that went on for more than two hours. However, the income tax department expected to recover ₹970 million from the event. The collection, in total, fetched ₹609 million. The auction included bidders from London, New York and New Delhi among others, bidding online for the paintings. As the auction took place, on Wednesday, Camelot Enterprises. Nirav Modi’s company, has filed a petition against the auction of paintings in the Bombay High Court calling the move unlawful. The company also said a few of those paintings are actually company’s assets, demanding to restrict the auction. Ranging from thousands to millions, the paintings were the artwork by renowned Indian painters including Raja Ravi Verma, FN Souza, Jogen Chowdhury, VS Gaitonde and Akbar Padamsee. For instance, Raja Ravi Verma’s oil on canvas from 1881 was sold at ₹140 million. Of the 55 painting sold during the auction, the highest amount fetched from a painting was recorded at ₹220 million and nearly 10 paintings touched the ₹<a href="https://indianexpress.com/article/india/nirav-modi-in-london-prison-his-art-under-mumbai-hammer-i-t-recovers-rs-54-8-crore-5644486/">10 million mark</a>. While, the 13 unsold paintings include a few by Chinese painters including a Miao Xiaochun piece. The paintings were sold at a Goods &amp; Services Tax (GST) of 12% along with a 15% commission for the auction house. Nirav Modi’s legal team is expected to file the second bail application in the UK court on Friday since he denied the first bail application on March 20. The CBI will send a team to Londom for the hearing on 29 March, ANI reported. Earlier, the ED reportedly <a href="https://www.businessinsider.in/nirav-modi-arrested-in-london/articleshow/68496650.cms">seized around</a> ₹6.4 billion from Nirav Modi’s assets including his property, bank deposits and jewellery. See also: <a href="https://www.businessinsider.in/nirav-modi-arrested-in-london/articleshow/68496650.cms">Here’s how the 13-month chase for Nirav Modi came to an end</a> <a href="https://www.businessinsider.in/india-presses-new-charges-against-diamond-merchant-nirav-modi-and-wife-ami-in-alleged-money-laundering-case/articleshow/68367950.cms">India presses new charges against diamond merchant Nirav Modi and wife Ami in alleged money laundering case</a>

India has seized over ₹548 million worth of paintings from Nirav Modi’s art collection including prized work by VS Gaitonde

New Delhi, Feb 27 () Sebi on Thursday slapped a total fine of Rs 5 crore on fugitive Mehul Choksi, Gitanjali Gems and another individual for violating various regulations, including listing norms, in connection with a massive fraud on state-run lender PNB. Choksi, promoter and managing director of Gitanjali Gems, is the maternal uncle of Nirav Modi, who is also facing charges for defrauding state-run Punjab National Bank (PNB) of over Rs 14,000 crore. Both Choksi and Modi fled India after the PNB scam came to light in early 2018. While Choksi is said to be in Antigua, Modi is lodged in a British jail and has challenged India's extradition request. In its order, Sebi said it is imposing a fine totalling Rs 5 crore on Choksi, Gitanjali Gems and Dhanesh Sheth, the executive director of Gitanjali. "... the default is grave and the gravity of this matter cannot be ignored," Sebi said. It quoted a communication from PNB that it had reported to the RBI total fraud of over Rs 11,394 crore in case of unauthorized issuance of LOUs, foreign letters of credit and inland letter of guarantees in the group accounts of Nirav Modi Group and Gitanjali Group and in the account of one Chandri Paper &amp; Allied Products Pvt Ltd. The overall fraud size is said to be even larger at over Rs 14,000 crore. "I am of the considered opinion that the deliberate defiance of the mandatory obligations and hiding the crucial and material information from investors, regulators and stock exchange, as found in this case should be dealt with sternly and the penalty in such cases should serve as effective deterrence," Sebi Adjudicating Officer Santosh Shukla said in a 28-page order. Sebi has penalised the entities for failing to make various requisite disclosures. Gitanjali has not made disclosures regarding withdrawal of credit limits by PNB in view of the alleged fraud by the firm and its subsidiaries, the sudden obligation to repay Rs 1,045.88 crore within 10 days and subsequent developments in the matter. The firm also failed to make disclosures on various litigations and actions by enforcement agencies against it, its managing director and other senior managerial personnel to the stock exchanges and also failed to reply on various clarifications sought by the exchanges till date, Sebi said. In addition, no disclosure was made on resignation of director, company secretary and chief finance officer to the stock exchanges. No disclosures with respect to delay in payment of interest and principal amount for a period of more than three months from the due date and default in payment of interest and principal to LIC on NCDs was made. Sebi noted that LIC has exposure to the firm under secured non-convertible debentures (NCDs) for Rs 125 crore. Gitanjali had issued post-dated cheques which were payable up to July 2019. However, the company stopped making repayments from October 2017. The firm has "prima facie" defaulted on debt obligations to LIC since October 2017, Sebi said. "Noticees actively and deliberately concealed the important information and did not disclose at all by the noticees, to the stock exchanges," it added. Highlighting Choksi's and Sheth's responsibility in making disclosures, Sebi said "instead of fulfilling their responsibilities, based on various media reports, it has been noted that the noticee no. 2 (Choksi) abdicated his responsibilities by leaving the country in the first week of January 2018, days before the alleged fraud came to light. Further, there is no information available with respect to the noticee no. 3 (Sheth)." "In this case, the Noticees have committed repeated and serious defaults by not disclosing subsequent material events / information with regard to material events as found hereinabove. The defaults by the Noticees are blameworthy and serious considering the degree of responsibility bestowed upon them by the statute," Sebi noted. Regarding Choksi and Sheth, Sebi said "the conduct of these directors is apparently mala fide." SRS BJ ABMABM

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India’s largest bank was caught lying about its profits for 3 years but no one got punished, according to an expose

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India has seized over ₹548 million worth of paintings from Nirav Modi’s art collection including prized work by VS Gaitonde

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PNB fraud: Sebi imposes Rs 5-cr fine on Mehul Choksi, others

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