MM TAX CLUB

State Bank of India, ICICI Bank, and HDFC Bank continue to be identified as Domestic Systemically Important Banks (D-SIBs), under the same bucketing structure as in the 2021 list of D-SIBs. The additional Common Equity Tier 1 (CET1) requirement for D-SIBs was phased-in from April 1, 2016 and became fully effective from April 1, 2019. The additional CET1 requirement will be in addition to the capital conservation buffer. The list of D-SIBs is as follows:

Background:

 The Reserve Bank had issued the Framework for dealing with Domestic Systemically Important Banks (D-SIBs) on July 22, 2014. The D-SIB framework requires the Reserve Bank to disclose the names of banks designated as D-SIBs starting from 2015 and place these banks in appropriate buckets depending upon their Systemic Importance Scores (SISs). Based on the bucket in which a D-SIB is placed, an additional common equity requirement has to be applied to it. In case a foreign bank having branch presence in India is a Global Systemically Important Bank (G-SIB), it has to maintain additional CET1 capital surcharge in India as applicable to it as a G-SIB, proportionate to its Risk Weighted Assets (RWAs) in India, i.e., additional CET1 buffer prescribed by the home regulator (amount) multiplied by India RWA as per consolidated global Group books divided by total consolidated global Group RWA.

The Reserve Bank had announced SBI and ICICI Bank as D-SIBs in 2015 and 2016. Based on data collected from banks as on March 31, 2017, HDFC Bank was also classified as a D-SIB, along with SBI and ICICI Bank. The current update is based on the data collected from banks as on March 31, 2022.

The Reserve Bank of India (RBI) has, by an order dated December 27, 2022, imposed a monetary penalty of ₹8.00 lakh (Rupees Eight Lakh only) on The Baghat Urban Cooperative Bank Limited, Solan, Himachal Pradesh (the bank) for contravention of section 35A and section 36 (1) (a) read with section 56 of the Banking Regulation Act, 1949 as the bank failed to comply with specific directions issued to it by RBI under Supervisory Action Framework (SAF). This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) and section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

The Inspection Report and Risk Assessment Report of the bank based on its financial position as on March 31, 2021, revealed, inter alia, non-compliance with specific directions issued to the bank by RBI under Supervisory Action Framework (SAF). Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the said directions. After considering the bank's reply to the notice, submissions made during the personal hearing and additional information furnished pursuant to the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty

The Reserve Bank of India (RBI) has, by an order dated December 28, 2022, imposed a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on Col. R.D.Nikam Sainik Sahakari Bank Ltd., Satara (the bank) for contravention of Section 26-A read with section 56 of the Banking Regulation Act, 1949 (the Act) and the Depositor Education and Awareness Fund Scheme, 2014. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949 (the Act), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

                The inspection report of the bank based on its financial position as on March 31, 2021, revealed, inter alia, that the bank had not transferred balances, in certain accounts which were unclaimed for more than ten years to Depositor Education and Awareness Fund. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with and contravention of the provisions of the Act and the directions issued under the Act, as stated therein.

                After considering the bank’s written reply to the notice, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.

The accused was arrested on December 1, 2022, and remanded to Judicial Custody till December 14, 2022.

A Delhi Court has granted bail to an accused allegedly involved in wrongfully passing input credit of GST amounting to ₹ 19 crores.

The accused was arrested on December 1, 2022, and remanded to Judicial Custody till December 14, 2022.

The Additional District Judge Sudhanshu Kaushik while granting bail last week said, no blanket ban can be put on bail merely because a person has been accused of an economic offence. In the present matter, the applicant is in custody since December 1, 2022. The report submitted by the prosecution demonstrates that the investigation of the accused already stands concluded.

The court in order further said, "Prosecution has already recorded the statement of the concerned persons including the transporters. The relevant documents have been collected. The fact that custodial interrogation of the accused is not warranted is evident from the fact that the prosecution never moved any application for the same."

Court further said that prosecution has opposed the bail application on the ground that there is a likelihood that the accused would try to influence the transporters, whose statements have been recorded. The bail cannot be refused merely on the apprehension that the accused would try to influence the transporters, more so, when no grounds for further custodial detention are made out.

The court granted bail to Jagdish Bansal on ₹ 15 lakh personal bail bond and two like amount surety.

Appearing for Jagdish Mittal, Advocate Vijay Kumar Aggarwal and Advocate Ayush Jindal argued that offence under section 132 of the GST Act entails a maximum punishment of five years and in such like offences, granting of bail is the rule and magistrate has dismissed the bail application on the basis of erroneous interpretation of the law.

Advocate Vijay Aggarwal, also submitted that the Additional Chief Metropolitan Magistrate has wrongly applied the principles of law by holding that at the state of remand, the court only has to see that a prima-facie case is made out against the accused and it cannot proceed to evaluate the evidence available on record.

He further argued that the Magistrate is duty bound to record satisfaction before authorizing further detention of the accused and the Magistrate has not complied with the guidelines issued by the Apex Court in the case of Arnesh Kumar.

It was alleged that Jagdish Bansal has created four proprietorship concerns and illegally claimed an input tax credit (ITC) under GST on the basis of false invoices, without there being any actual receipt of goods. It was further alleged that by following this modus operandi, the proprietorship concerns have passed on illegal ITC to the tune of ₹ 19.67 crores. It was further alleged that Jagdish Bansal in his statement recorded under section 70 of the Central Goods and Services Act, 2017 purportedly admitted that he had been running fake firms and passing on ITC on the strength of god-less invoices.