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The <keyword id="6354335" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (RBI) has imposed <keyword id="512003" type="General" weightage="20" keywordseo="penalties" source="Orion">penalties</keyword> to the tune of Rs 40.39 crore on banks, non-banking financial companies (NBFCs) and other entities for breach of norms during 2022-23, Minister of State for Finance Bhagwat Karad said in a written reply to the Lok Sabha on Monday. As many as 176 of these cases involving fines of Rs 14.04 crore pertained to <keyword id="6554737" type="General" weightage="20" keywordseo="cooperative-banks" source="Orion">cooperative banks</keyword>. <keyword id="141219" type="General" weightage="20" keywordseo="private-sector-banks" source="Orion">Private sector banks</keyword> were fined Rs 12.17 crore while public sector banks (PSBs) were levied penalties of Rs 3.65 crore, foreign banks Rs 4.65 crore, and NBFCs ended paying up Rs 4.39 crore. "RBI has informed that it is mandated to take enforcement action as per Enforcement Policy and Framework approved by the Board for Financial Supervision of RBI, in the form of imposition of monetary penalty on regulated entities for contraventions of different statutes and directions," the Minister stated. The RBI issued guidelines on fair practices code to be adopted by banks, NBFCs, and HFCs and these covered various aspects of lending, he added.

RBI penalties on banks, NBFCs add up to Rs 40.39 crore for 2022-23

<ul><li>Three banks would be most impacted by the move as their capital ratios would be affected by 30-85 basis points.</li><li>Capital buffers will have to be further strengthened by banks if they want to lend to consumers for unsecured loans.</li><li>Borrowers with more than five personal loans rose from 1% in 2018 to 7.7% in March 2023, as per a report.</li></ul> Shares of <keyword id="116253" type="General" weightage="50" keywordseo="sbi-cards" source="Orion">SBI Cards</keyword>, RBL Bank, <keyword id="6357149" type="General" weightage="50" keywordseo="hdfc-bank" source="Orion">HDFC Bank</keyword> and <keyword id="6653" type="General" weightage="50" keywordseo="icici-bank" source="Orion">ICICI Bank</keyword> are expected to come under pressure after the Reserve Bank of India asked lenders on Thursday to set aside more capital for consumer loans. This move is expected to impact the capital buffers of these banks. According to analysts, these banks would be most impacted by the move as their capital ratios would be affected by 30-85 basis points. For banks the first line of defense against bad loans is CET Tier 1 capital or Common Equity Tier 1 capital (CET1), which is the highest quality of regulatory capital, as it absorbs losses immediately when they occur. According to Motilal Oswal Financial Services, the CET 1 impact would be maximum for RBL/HDFC Bank/ICICI Bank at 84 basis points/72 basis points/64 basis points. Among non banks, SBI Cards would be the most vulnerable with a 416bp impact on capital ratios. Capital buffers will have to be further strengthened by banks if they want to lend to consumers for unsecured loans. If a bank had to set aside say ₹20 for loans, it will now have to set aside 25% more for every unsecured loan it issues. Not just this the banks will have to set aside more capital if they want to lend to shadow banks or non banking financial institutions as well. When cost of capital increases, so will lending rates. In the years after the pandemic broke, unsecured personal loans to retail borrowers have been on a steady rise. Not just banks but even non banks have been merrily issuing such loans to borrowers, and in many cases these borrowers have multiple such loans used for consumption. From 12-14% these loans are now growing at 30% rate. The central bank has cracked down on some non banks for not adhering to norms while underwriting such small ticket loans. The red flags have been flying high for a while now. According to proprietary research done by UBS, borrowers with more than five personal loans rose from 1% in 2018 to 7.7% in March 2023. New disbursement of personal loans to borrowers with weaker credit profiles accounted for 22% of disbursements. Of all banks, UBS was of the view that state-owned banks and non banking financial companies had a much higher share of weak borrowers compared to private banks. Analysts believe that pressure on net interest margins and higher credit costs to impact earnings of banks and shadow banks over FY24 and FY25. Paytm, a fintech company, has recently built a large loan portfolio which is mostly comprised of personal loans. With the <keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword> cracking down on these loans, the loan growth will be impacted for Paytm too. Deepak Shenoy, CEO of Capital Mind, took to social media to explain the impact, “See how it affects SBI cards: SBI Cards had credit card receivables of ₹ 45,000 crore with 23% capital adequacy ratio (CAR). So ₹10,500 cr in capital (23% of ₹45Kcr). Increase risk weight to 125% means ₹45K cr=₹56K cr risk weighted assets.” Shenoy explains that if “SBI Cards wants to grow, and keep high CARs (min is 15% I think?) they’ll need to raise capital and dilute. Which means for the same profit = higher capital. Means lower ROEs.” ALSO READ: <a href="https://www.businessinsider.in/stock-market/markets/news/foreign-investors-continue-to-bet-big-on-banks-and-nibbling-on-small-and-mid-cap-stocks/articleshow/104462273.cms" data-type="tilCustomLink" target="_blank">Borrowers with multiple personal loans a big risk to profitability of banks and NBFCs</a>

RBI tightens norms on personal loans for banks and NBFCs; stocks to be under pressure

The <keyword id="19895371" type="General" weightage="20" keywordseo="Congress" source="keywords" meta.keywordsubtype="org" meta.entityname="Congress" meta.hostid="261" meta.entityid="Congress">Congress</keyword> party has levied fresh allegations against <keyword id="20914154" type="General" weightage="100" keywordseo="SEBI-Chairperson" source="keywords">SEBI Chairperson</keyword> <keyword id="19922107" type="General" weightage="20" keywordseo="Madhabi-Puri-Buch" source="keywords">Madhabi Puri Buch</keyword>, calling her a perfect case of the office for profit. This refers to a position that brings some financial gain, or advantage to the office holder, which in this case was Buch's position as a whole-time member of <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword>, and then post 2022, as the regulatory body's chairperson. In a press conference in New Delhi on Monday, Pawan Khera, Chairman, Media and Publicity Department, Congress, charged Buch of receiving regular income from private lender <keyword id="19900482" type="General" weightage="20" keywordseo="ICICI-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="ICICI Bank" meta.hostid="261" meta.entityid="ICICI Bank">ICICI Bank</keyword> and <keyword id="47860" type="General" weightage="20" keywordseo="ICICI-Prudential" source="Orion">ICICI Prudential</keyword>, India's second largest asset management company, all while being the whole-time member and later Chairperson of the capital markets regulatory body. "She (SEBI Chairperson Madhabi Puri Buch) between 2017 and 2024 was taking regular income of Rs 16 crore 80 lakhs from ICICI Bank," alleged Pawan Khera, at the press briefing. The congress spokesperson also alleged that Buch received a total of Rs 16.80 crore between 2017-18 to 2023-24, from ICICI Bank, ICICI Prudential, <keyword id="20043663" type="General" weightage="20" keywordseo="ESOPs" source="keywords">ESOPs</keyword>, and <keyword id="19948097" type="General" weightage="20" keywordseo="TDS" source="keywords">TDS</keyword> on ESOPs. According to the Congress' allegations, in 2017-18 the SEBI chief allegedly received Rs 2.06 crore from ICICI Bank as salary and Rs 7 lakh from ICICI Prudential. In 2018-19, she received Rs 4.71 crore from ICICI Bank, Rs 2.17 lakh from ICICI Prudential. In 2019-20, Rs 1.21 crore from ICICI Bank and Rs 2.17 lakh from ICICI Prudential. In 2020-21, she was alleged of having received Rs 4.64 crore from ICICI Bank and Rs 2.17 lakh ICICI Prudential. In 2021-22, Congress asserted that the salary stopped from ICICI Bank but she continued to receive Rs 2.17 lakh from ICICI Prudential, also same year she received ESOP and TDS on ESOP from ICICI Bank. In 2022-23, she was alleged to have received Rs 4.44 lakh from ICICI Prudential, in addition to ESOP and TDS on ESOP, In 2023-24, she was alleged to have received Rs 2.17 from ICICI Prudential. The Congress further alleges that during this period, Buch also drew a salary from SEBI as a whole-time member and later as the Chairperson. Khera further added that several probes on ICICI Bank were being adjudicated during this period when Madhabi Puri Buch was receiving income from the group. He also cited unnamed reports to claim that the SEBI chief has relaxed norms for the ICICI Bank. "The person sitting at the top of the regulator is taking salaries from another entity," Khera alleged, adding it was a perfect case of "office for profit". "So we want to know why you were taking your salary from ICICI despite being a full-time member of SEBI?," Khera asked what service she as the SEBI Chairperson provided the bank when she was part of SEBI. "This is a direct violation of Section 54 of SEBI. Therefore, if Madhabi Puri Buch has any shame, she should resign from her post," Khera added. The SEBI Chief is yet to react to the charges made by the Congress in Monday's news conference. Madhabi Puri Buch was a whole-time member of SEBI from April 5, 2017 to October 4, 2021. Then on March 2, 2022, Madhabi Puri Buch became the Chairperson of SEBI. Recently, US-based short seller Hindenburg Research made allegations against her accusing her of conflict of interest. Last month, Hindenburg Research alleged that SEBI Chairperson Madhabi Puri Buch and her husband Dhaval Buch had stakes in "both the obscure offshore entities used in the Admoney siphoning scandal." Hindenburg Research said it has made the new allegations based on documents provided by a whistleblower and investigations carried out by other entities. Soon after, the SEBI Chairperson and her husband, in their personal capacity, issued a detailed statement rejecting the allegations. In the joint statement released to the media they said, "In the context of allegations made in the Hindenburg Report dated August 10, 2024, against us, we would like to state that we strongly deny the baseless allegations and insinuations made in the report. The same are devoid of any truth. Our life and finances are an open book. All disclosures as required have already been furnished to SEBI over the years. We have no hesitation in disclosing any and all financial documents, including those that relate to the period when we were strictly private citizens, to any and every authority that may seek them. Further, in the interest of complete transparency, we would be issuing a detailed statement in due course." "It is unfortunate that Hindenburg Research against whom SEBI has taken an Enforcement action and issued a show cause notice has chosen to attempt character assassination in response to the same," the statement from Madhabi Buch and her husband Dhaval Buch read.

Congress alleges SEBI Chairperson Madhabi Puri Buch of office for profit

Inside a prison healthcare company's ownership shell game

<ul class="summary-list"><li>Team owners will meet at the annual league meeting in March to discuss private equity.</li><li>The investment-ownership model is favored in the NBA, MLB, and NHL — but not in the NFL.</li></ul>NFL ownership is unique compared to other major-league sports. When you think of <a target="_blank" href="https://www.businessinsider.com/celebrities-spotted-at-the-73rd-nba-all-star-game-2024-2">the NBA</a>, the players spring to mind before the owners. But in <a target="_blank" href="https://www.businessinsider.com/taylor-swift-made-nfl-more-popular-in-america-us-2023-9">the NFL</a>, a team owner's face is often as familiar to fans as any player's.Most owners have long histories with their teams, which are often family-owned and passed down from generation to generation.But this narrative could change as the league inches closer to opening its doors to a slew of institutional investors, including <a target="_blank" href="https://www.businessinsider.com/top-private-equity-firms-investing-in-sports-2022-10">private-equity firms</a>, <a target="_blank" href="https://www.businessinsider.com/personal-finance/venture-capital">venture-capital funds</a>, and potentially sovereign-wealth funds.Why is the league considering this? Team valuations are skyrocketing, raising the bar to entry to anyone but the richest of the rich, including <a target="_blank" href="https://www.businessinsider.com/rich-sports-team-owners-investing-private-equity-2023-9">Silicon Valley billionaires </a>and <a target="_blank" href="https://www.businessinsider.com/sports-investing-pga-tour-nfl-2024-1#:~:text=Lasry%20and%20Cohen%20are%20prime,hedge%20fund%20boss%20of%20Point72.">Wall Street tycoons</a>.In 2023, the average team was worth a record $5.1 billion, up by 14% from the year prior, according to <a target="_blank" href="https://www.forbes.com/lists/nfl-valuations/?sh=36a0b9717386">Forbes</a>. The Washington Commanders is a prime example of how team valuations have shot up — the billionaire <a target="_blank" href="https://www.businessinsider.com/apollo-global-josh-harris-family-office-tensions-2022-9">Josh Harris</a> bought the team for $6.05 billion in July."There are only a limited number of billionaires left who will check every box to be a lead owner," <a target="_blank" href="https://www.businessinsider.com/mark-patricof-private-equity-investing-professional-athletes-2021-5">Mark Patricof</a>, the founder of the investment firm Patricof Co and an operating executive at the private-equity firm Crestview, said. "Clearly, they're going to have to have a change in the threshold of what the lead owner has to put up to control the team."The NFL has long encouraged the family-ownership model, but it appears that executives are starting to realize that skyrocketing valuations are making it harder for owners to keep these teams within their families. <a target="_blank" href="https://www.bloomberg.com/news/features/2024-02-09/nfl-owners-face-huge-estate-taxes-to-keep-teams-in-family">Changing the rules</a> to allow more owners with passive interests to invest in teams could help NFL families benefit from rising team values without losing control."In 2026, 50% of the tax exemptions that are currently in place for estate taxes are expiring," Carrie Potter, a lecturer of sports management at Rice University and a sports-finance expert, said. "So when these teams are selling for $6 billion, the amount of estate tax that they're going to have to pay is incredibly high.'Another reason the ownership rules may change is that there are no Black controlling owners in the NFL and fewer than 12 Black billionaires in the United States, Forbes data shows. Some teams have partial Black owners, including the Denver Broncos — whose partial owners include <a target="_blank" href="https://www.businessinsider.com/mellody-hobson-life-career-denver-broncos-ariel-investments-george-lucas-2022-6">Mellody Hobson</a>, <a target="_blank" href="https://www.businessinsider.com/condoleezza-rices-advice-for-women-leadership-tips-kpmg-2022-6">Condoleezza Rice</a>, and <a target="_blank" href="https://www.businessinsider.com/lewis-hamilton-net-worth-salary-wife-f1-mercedes">Lewis Hamilton</a>, but they are not controlling owners.Therefore, the burning topic of private equity will most likely spark conversation when executives from all 32 NFL teams gather at the annual league meeting in <a target="_blank" href="https://www.businessinsider.com/moving-to-orlando-florida-cheaper-homes-from-miami-california-ny-2024-2">Orlando</a> in a few weeks. Owners are expected to discuss what the model could look like, who could be affected, and how it could impact ownership diversity."I think the owners are going to be split," Kurt Rotthoff, a finance expert and professor of economics at Seton Hall University, told BI. "I think they'll be torn because of the legacy aspects that you can build by having the family or individuals or a small group of people own the team for long periods of time."So, what could a rule change mean for institutional investors, their Wall Street brokers, owners, and sports fans? To better understand this, BI spoke to leading sports-finance professionals, including Patricof, an investment banker who has advised <a target="_blank" href="https://www.businessinsider.com/florida-democrats-dwyane-wade-grant-hill-nba-scott-2024-senate-2023-5">Dwyane Wade</a> and <a target="_blank" href="https://www.businessinsider.com/coco-gauff-best-tennis-advice-from-venus-williams-2023-8">Venus Williams</a>, and three sports-finance professors from leading institutions.Here are their thoughts.<div type="image" title="Head coach Andy Reid and owner Clark Hunt wave to fans" height="3536" width="5314" msid="108117361" hostid="261"></div><h2>The NFL team owners</h2>Gil Fried, a professor at the University of West Florida and the author of "<a target="_blank" href="https://us.humankinetics.com/products/managing-sport-facilities-4th-edition-with-web-study-guide">Managing Sports Facilities</a>" and "<a target="_blank" href="https://affiliate.insider.com?amazonTrackingID=biauto-64358-20&amp;h=dbead43162155666d5ec6c1b317fc3c4e6ff05419677e3c060b695f14c011271&amp;postID=65e091d5e3dcaf0271294dd8&amp;postSlug=nfl-ownership-rules-change-big-win-wall-street-private-equity-2024-2&amp;site=bi&amp;u=https%3A%2F%2Fwww.amazon.com%2FSport-Finance-Gil-B-Fried%2Fdp%2F1492559733-">Sport Finance</a>," said he thinks the owners will be the winners of any rule change because it will allow them to cash in on their investment at a high premium while potentially still maintaining a majority stake in their teams.Opening the door to people "who aren't shy when it comes to dropping a billion dollars for part ownership of minority ownership in a team is going to be a godsend for current owners," he said.Experts also think NFL team owners' "wealth would increase drastically," Rotthoff said — due to the considerable profits they've already made from <a target="_blank" href="https://www.businessinsider.com/dyal-basketball-private-equity-phoenix-suns-nba-team-stakes-2021-7">team valuations </a>in the past decade.<div type="image" title="Football player celebrating with a crowd of people at the New York Stock Exchange" height="3257" width="4886" msid="108117363" hostid="261"></div><h2>Wall Street</h2>Wall Street will come out on top because it is made up of companies that stand to earn big fees managing these investments and acting as <a target="_blank" href="https://www.businessinsider.com/what-do-investment-bankers-do-2016-7#:~:text=%22An%20investment%20bank%20does%20something,through%20to%20the%20very%20end.">brokers for buyers and sellers</a>.Experts think the NFL won't go as far as allowing sovereign-wealth funds, or funds controlled by foreign governments, to invest in sports teams. But, they think the NFL will allow teams to sell small, passive stakes to a wide variety of other types of institutional investors, including <a target="_blank" href="https://www.businessinsider.com/wall-street-private-equity-woes-debt-stock-market-interest-rates-2023-12">private-equity</a> and venture-capital firms, both of which tend to raise money from wealthy people to invest in an array of assets, whether startups, <a target="_blank" href="https://www.businessinsider.com/blackstone-jonathan-gray-predicts-commercial-real-estate-bottom-2024-1">real-estate</a>, or sports teams.<a target="_blank" href="https://www.businessinsider.com/citigroup-and-jpmorgan-announce-new-investment-banking-leaders-viswas-raghavan-2024-2">Wall Street investment banks</a> could also benefit in their role as advisors to wealthy investors and sports teams, including helping connect buyers with sellers. Just last year, Goldman Sachs launched a new Sports Franchise Group within its investment-banking team to help connect wealthy people with opportunities to invest in teams, stadiums, and other sports assets, <a target="_blank" href="https://www.wsj.com/finance/banking/goldmans-pitch-to-rich-clients-hey-buy-a-piece-of-this-sports-team-5a58746b">the Wall Street Journal</a> reported.<div type="image" title="Stock man with chart" height="350" width="700" msid="108117365" hostid="261"></div><h2>Investors</h2>Investors are less likely to be winners from the NFL rules changes.Experts believe as soon as the rules change, there could be an initial boost in <a target="_blank" href="https://www.businessinsider.com/sports-leaders-invest-billions-into-the-pga-tour-2024-1">team valuations</a> as investors scramble to get a piece of the pie. But new investors may find themselves disappointed in the long term, Rotthoff said."I think Wall Street would see the initial honeymoon bump in terms of investors trying to jump in," he said. He compared it to <a target="_blank" href="https://www.businessinsider.com/coinbase-stock-price-sam-bankman-fried-ftx-crash-markets-cryptocurrency-2022-11">much-anticipated IPOs</a>, which can result in a stock popping on its first day of trading only to decline after the hype fades."It's a very risky long-term return," he said. "As more people try to own more of these teams, it would diminish the average expected return over time."<div type="image" title="Taylor Swift gives fans a high-five during the NFL playoff matchup between the Chiefs and Dolphins." height="2000" width="3000" msid="108117367" hostid="261"></div><h2>Sports Fans</h2>Experts think sports fans stand to lose in the long run, even if they benefit from owners having more money to invest in their teams in the short term.Opening the door to new investment will mean a sudden influx of cash that owners could put toward some much-needed upgrades, Potter said. "A lot of the <a target="_blank" href="https://www.businessinsider.com/super-bowl-2023-state-farm-stadium-grass-cost-months-2023-2">NFL facilities</a> are aged and have a lot of upgrades that need to happen or perhaps new stadiums to be built."But it could also mean rising costs, especially as "smart money investors" — such as institutional investors, hedge funds, or private-equity firms — start demanding a return on their investment, Fried said."That's their whole purpose," Fried said. "They want to have a strong rate of return. The only way to get that is by finding a new revenue stream." That could mean increased concession or ticket prices, he added. And it could mean average fans "get priced out of being able to actually go to games".Experts also believe that <a target="_blank" href="https://www.businessinsider.com/how-overtime-grew-revenue-to-projected-100-million-advertising-sponsorships-2024-2">sports fans </a>may lose passion if they feel like the corporation is putting on a show.Fans may "feel like losers," Rotthoff said. This feeling may be because fans are used to having a "particular person that they perceive as being invested in their team and their local community to a private-equity group who is probably less invested in the local areas," he said.Contact this reporter to share your experience. Tiara White can be reached via email at <a target="_blank" href="mailto:twhite@insider.com">twhite@insider.com</a> or SMS/ the encrypted app Signal at <a target="_blank" rel="noopener noreferrer" class="c-link">(917) 275-7823</a>.

The NFL is gearing up to change team ownership rules in what could be a massive win for Wall Street

It takes an Oscar-worthy director to come up with the juicy drama that somehow seems to pervade India’s pre-general election seasons. Amid all the chaos, a political hot topic has just witnessed a major development: the electoral bonds row. <cmsannotation type="cmsannotation" annotationid="What are electoral bonds?" comment="subhead" text="What are electoral bonds?">What are electoral bonds?</cmsannotation> For those unversed in the whole episode, the government introduced the <keyword id="4697813" type="General" weightage="100" keywordseo="electoral-bond" source="Orion">Electoral Bond</keyword> Scheme via the Finance Act of 2016-2017, allowing anyone to anonymously make an indefinite number of non-capped donations to their preferred political parties. Before this scheme, all donations above Rs 20,000 had to be explicitly made public, and donations of more than a certain percentage of the company’s revenue were disallowed. Such restrictions were meant to ensure that no political party had an unfair monetary advantage over the others and that the policies would not be influenced by the rich. Therefore, many experts were concerned that this new lack of transparency in the donation process opened up a gaping avenue for big corporations to donate for favourable outcomes from the ruling regime in terms of acquiring licences, government contracts, leases, and even accelerating favourable policy changes. The government insists that the measure ensures transparency as the purchaser would be allowed to buy bonds only on due fulfilment of all the extant KYC norms and by making payment from a bank account. However, the opposition parties kept raising objections, with the <keyword id="19895371" type="General" weightage="20" keywordseo="congress" source="keywords">Congress</keyword> leader Rahul Gandhi terming the electoral bond scheme as a legalisation of the process of accepting bribes and commissions. <cmsannotation type="cmsannotation" annotationid="How did the Supreme Court step in?" comment="subhead" text="How did the Supreme Court step in?">How did the <keyword id="19895345" type="General" weightage="20" keywordseo="supreme-court" source="keywords">Supreme Court</keyword> step in?</cmsannotation> Recently, in a move that many celebrated as a major win for transparent and fair electoral practices, a Constitution Bench panel of five Supreme Court judges scrapped the Centre’s electoral bonds scheme on February 15, deeming that the whole ordeal was “unconstitutional” to begin with. Subsequently, the <keyword id="19934368" type="General" weightage="20" keywordseo="state-bank-of-india" source="keywords">State Bank of India</keyword> (<keyword id="19898108" type="General" weightage="20" keywordseo="sbi" source="keywords">SBI</keyword>) was ordered to disclose all details of the donors that had purchased electoral bonds, the amount purchased, and the recipients of these “support” donations. Nearly a month after the directive, SBI finally submitted the electoral data to the <keyword id="19895782" type="General" weightage="20" keywordseo="election-commission" source="keywords">Election Commission</keyword> on March 13, after the apex court denied its application for more time. The bank attributed the delay in compiling the information to the non-digital nature of the way electoral data was collected and stored, making it harder to collate and produce. <cmsannotation type="cmsannotation" annotationid="What does the data reveal?" comment="subhead" text="What does the data reveal?">What does the data reveal?</cmsannotation> The data published by the Election Commission based on SBI’s affidavit revealed information on over 22,217 electoral bonds purchased between April 1, 2019 and February 1, 2024. This also means there exists a year’s worth of data missing from the first year of the electoral bonds scheme, amounting to hundreds of crores of Rupees. Further, the very content of the data remains lacklustre, many experts maintain. The problem is that individual electoral bonds do not have their serial numbers attached. This makes it impossible to accurately ascertain who these bonds were directed to, meaning we still do not know which corporations donated how much to which parties. Condemning the SBI for not divulging the unique serial numbers as per its previous full-disclosure directive, the Supreme Court has now issued a notice for a prompt response by March 18. <cmsannotation type="cmsannotation" annotationid="Which political party benefited the most?" comment="subhead" text="Which political party benefited the most?">Which political party benefited the most?</cmsannotation> While many political parties benefited from this scheme, the Bharatiya Janata Party (<keyword id="19894848" type="General" weightage="20" keywordseo="bjp" source="keywords">BJP</keyword>) encashed about 1,300 crores worth of electoral bonds during the 2023 financial year, according to media reports. This amounted to about half of the total electoral bond donations, and more than seven times the amount Congress received during the same period. Out of a total of 12,155 crores worth of electoral bonds purchased between 2019 and 2024, BJP redeemed Rs 6061 crores, followed by Mamata Banerjee’s Trinamool Congress at Rs 1610 crores. A total of 213 donors purchased bonds worth over Rs 10 crores, with the top 20 donors accounting for nearly half of the total electoral bonds. <cmsannotation type="cmsannotation" annotationid="Are scams hiding behind the electoral bonds?" comment="subhead" text="Are scams hiding behind the electoral bonds?">Are scams hiding behind the electoral bonds?</cmsannotation> The ruling party receiving such a disproportionate share of the electoral bonds has raised many eyebrows. Rajya Sabha Minister Kapil Sibal expressed discontent with the SBI report, calling it a “scam” and explaining that it needs thorough investigation by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI). Jharkhand Congress President Rajesh Thakur emphasised that a comprehensive study is essential to ascertain the true extent to which companies might have their money to get favour from the central government. Many Congress leaders, such as Manickam Tagore and Jairam Ramesh, also held that it was suspicious that only companies that donated funds to the BJP were given projects and contracts. The other problem is the fact that several of the big purchasers have been consistently under the radar of central agencies, facing frequent raids. This includes the top donor, Lottery company Future Gaming and Hotel Services, led by “Lottery King” Santago Martin, who donated a whopping Rs 1,368 crores. Many others also concern that large corporations may have donated money through shell corporations, in order to hide their involvement in any political favouritism. Congress MP Manish Tewari asked for a Supreme Court order to “lift” this corporate veil of shell companies to reveal the true purchasers of the bonds. Further, as per a Mint analysis, several donor companies who contributed massive amounts were found to be ‘inactive’, and thus the true details of the donors were not transparent at all. According to their report, this included entities such as Rungta Sons, SN Mohanty, Sasmal Infrastructure Private Limited, Avees Trading Finance, and others, whose collective contributions amount to hundreds of crores of Rupees. The official electoral bond data can be accessed via the <a href="https://www.eci.gov.in/candidate-politicalparty" data-type="tilCustomLink">Election Commission of India website</a>.

Electoral bonds: What are they? What does the newly-released data reveal? Would it make an impact?

Mumbai, The arrest of ICICI Bank's former Managing Director and Chief Executive Officer (CEO) Chanda Kochhar and her husband Deepak Kochhar by the Central Bureau of Investigation (<keyword id="19896633" type="General" weightage="20" keywordseo="cbi" source="keywords">CBI</keyword>) in a loan fraud case was "without application of mind and due regard to the law", amounting to an "abuse of power", the Bombay High Court has said. A division bench of Justices Anuja Prabhudessai and N R Borkar had on February 6 held the <keyword id="20482859" type="General" weightage="20" keywordseo="kochhars" source="keywords">Kochhars</keyword>' arrest as illegal and confirmed a January 2023 interim order passed by another bench granting them bail. In the order made available on Monday, the court said the CBI has been unable to demonstrate the existence of circumstances or supportive material based on which the decision to arrest was taken. The absence of such circumstances renders the arrest illegal, it said. "Such routine arrest without application of mind and due regard to the law amounts to an abuse of power," the court said. The court also refused to accept the probe agency's contention that the arrest was made as the Kochhars were not cooperating with the probe and said the accused had a right to remain silent during interrogation. "The right to silence emanates from Article 20(3) of the Indian Constitution, which gives an accused the right against self-incrimination. Suffice it to say that exercise of the right to remain silent cannot be equated with non-cooperation," it said in the order. The CBI arrested the couple on December 23, 2022, in the Videocon-ICICI Bank loan case. They immediately moved the high court challenging the arrest and sought for the same to be declared illegal, and by way of interim order, sought to be released on bail. On January 9, 2023, the court, in an interim order, granted the Kochhars bail, noting that the CBI had made the arrest casually and mechanically and without application of mind. In the February 6 order, the bench noted that section 41A of the Criminal Procedure Code (CrPC) was introduced to avoid routine arrests. It cited that this provision restricts the power to arrest when an accused person complies with the notice issued by the police to appear for questioning and mandates that an arrest shall be made only when the police are of the opinion that it is necessary. The court held that while it was within the domain of the investigating agency to interrogate an accused and to arrive at a subjective satisfaction on the issue, the same was not "wholly immune from judicial reviewability". "The court can consider whether the reasons for deprivation of liberty are rational, reasonable or fanciful," it said. The bench further said that the first information report (FIR) against the Kochhars was registered in 2019, and they were summoned for questioning only in 2022. "Despite the gravity of the offence, the petitioners (Kochhars) were not interrogated or summoned for a period of over three years from the date of registration of the crime," it said. From June 2022, the Kochhars have been appearing before the CBI as and when notices under section 41A were issued to them, the bench said. The CBI had claimed that the Kochhars were arrested as they were not cooperating with the probe and that their custodial interrogation was required to unearth the entire gamut of conspiracy. Apart from the Kochhars, the CBI had also arrested <keyword id="20060394" type="General" weightage="20" keywordseo="videocon" source="keywords">Videocon</keyword> group founder <keyword id="20641998" type="General" weightage="20" keywordseo="venugopal-dhoot" source="keywords">Venugopal Dhoot</keyword> in the case. The high court granted him bail in January 2023 in its interim order. The probe agency has alleged that private sector lender ICICI Bank had sanctioned credit facilities to the tune of Rs 3,250 crore to the companies of Videocon Group promoted by Dhoot in violation of the Banking Regulation Act, <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword>'s guidelines, and credit policy of the bank. The CBI had named the Kochhars, Dhoot along with Nupower Renewables (NRL) managed by Deepak Kochhar, Supreme Energy, Videocon International Electronics Ltd and Videocon Industries Ltd as accused in the FIR registered in 2019 under the Indian Penal Code sections related to criminal conspiracy and provisions of the Prevention of Corruption Act. The agency has alleged that the ICICI Bank sanctioned credit facilities to the tune of Rs 3,250 crore to these companies in violation of norms. It further claimed that as a part of quid pro quo, Dhoot made an investment of Rs 64 crore in Nupower Renewables through Supreme Energy Pvt Ltd (SEPL) and transferred SEPL to Pinnacle Energy Trust managed by Deepak Kochhar through a circuitous route between 2010 and 2012.

Chanda Kochhar, her husband's arrest in loan fraud case amounts to abuse of power by CBI: HC

<div type="image" title="RBI" agency="ANI" height="900" width="1200" msid="105464045" hostid="261" sizebytes="40796" caption="&amp;lt;p&amp;gt;RBI&amp;#39;s vigilance: New consumer credit norms to bolster India&amp;#39;s financial stability amidst surging loan growth&amp;lt;/p&amp;gt;"></div>In a proactive move aimed at mitigating potential systemic risks associated with the rapid growth of <keyword id="437168" type="General" weightage="20" keywordseo="consumer-credit" source="Orion">consumer credit</keyword>, the Reserve Bank of India (<keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>) has implemented stringent measures, impacting both banks and non-bank financial institutions (NBFIs). <keyword id="125045" type="General" weightage="20" keywordseo="fitch-ratings" source="Orion">Fitch Ratings</keyword> has provided insights into the repercussions of these regulatory adjustments on the financial sector. The central focus of the regulatory adjustments is to mandate banks and NBFIs to allocate more capital against unsecured consumer credit. Fitch Ratings views these changes as a credit-positive effort by regulatory authorities to control emergent risks in consumer credit. Notably, the growth of unsecured credit card loans and personal loans by banks witnessed an impressive 29.9 per cent and 25.5 per cent year-on-year increase, respectively, in the first half of the financial year ending March 2024. This surge in consumer credit raised concerns, prompting the need for preventive measures. The increasing exposure to unsecured consumer credit considered a riskier <keyword id="6360217" type="General" weightage="20" keywordseo="loan" source="Orion">loan</keyword> category, signals a greater risk appetite among banks and NBFIs. This trend is attributed to the institutions seeking to protect net interest margins (NIMs) amid fierce competition for secured retail loans. The regulatory changes introduce higher risk weightings, aligning for both banks and NBFIs. While risk weightings for credit-card lending increase to 125 per cent (from 100 per cent previously) for NBFIs, banks maintain a higher 150 per cent. Microfinance is excluded from higher risk weights for NBFIs, distinguishing it from banks. Fitch Ratings estimates that the measures may lower the common equity Tier 1 (CET1) ratio of the banking system by around 30 basis points. The impact varies for Fitch-rated banks, ranging from 6 to 34 basis points, with a double-digit impact expected for private banks like State Bank of India (SBI) and Canara Bank. Private banks, with relatively better CET1 capitalization, are expected to maintain reasonable capitalization even after the changes. The measures, however, may not significantly lower banks' capital scores or standalone Viability Ratings (VRs), though SBI's VR headroom could narrow. Fitch-rated NBFIs, including Shriram Finance Limited, Muthoot Finance Ltd, IIFL Finance Limited, and Manappuram Finance Limited, witness an impact on capitalization ratios, loan growth, and future asset quality. However, the overall impact is expected to be limited, with these entities benefiting from reduced systemic risk. NBFIs may experience a rise in bank funding costs by 40 to 60 basis points. This assumes that banks pass on capital costs from higher risk weights on loans to NBFIs. Larger NBFIs are better positioned to negotiate favorable terms with banks, while lower-rated entities could face greater increases. Loans to housing finance companies and NBFIs eligible for priority sector classification are excluded from the adjustment, benefiting entities like Shriram due to their priority sector exposure. The regulatory changes aim to strike a balance between fostering consumer credit growth and preventing the buildup of systemic risks. The phased implementation of these measures underscores the regulators' commitment to maintaining financial stability while allowing financial institutions time to adapt to the new norms. As India's financial landscape undergoes these adjustments, stakeholders are closely monitoring the impact on lending practices, risk management, and overall economic resilience. (ANI)

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