Thursday, April 23, 2015

Mandatory Leave For Bank Staff AND Amendment In LTC Rules For Central Government Employees



Approval to introduce the Negotiable Instruments (Amendment) Bill, 2015 in Parliament
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the proposal to introduce the Negotiable Instruments (Amendment) Bill, 2015 in Parliament. The amendments are focused on clarifying jurisdiction related issues for filing cases of offence committed under Section 138 the Negotiable Instruments Act,1881 (NI Act).

The main amendment included in this is the stipulation that the offence of rejection/return of cheque u/s 138 of NI Act will be enquired into and tried only by a Court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment is situated.

Section 138 of the NI Act deals with the offence pertaining to dishonour of cheque for insufficiency, etc., of funds in the drawer’s account on which the cheque is drawn for the discharge of any legally enforceable debt or other liability. Section 138 provides for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. The object of the NI Act is to encourage the usage of the cheque and enhancing the credibility of the instrument so that normal business transactions and settlement of liabilities could be ensured.

The clarification of jurisdictional issues may be desirable from the equity point of view as this would be in the interests of the complainant and would also ensure a fair trial.

The clarity on jurisdictional issue for trying cases of cheque bouncing would increase the credibility of the cheque as a financial instrument. This would help trade and commerce in general and allow lending institutions, including banks, to continue to extend financing to the economy, without the apprehension of the loan default on account of bouncing of a cheque.

Action will be initiated to introduce the Negotiable instruments (Amendment) Bill, 2015 in Parliament in the second phase of the current Session of Parliament.

Background

Various financial institutions and industry associations have expressed difficulties, arising out of the recent legal interpretation of the place of jurisdiction for filing cases under Section 138 to be the place of drawers’ bank by the Supreme Court. To address the difficulties faced by the payee or the lender of the money in filing the case under Section 138 of the NI Act, because of which, large number of cases were stuck, the jurisdiction for offence under Section 138 has been clearly defined. The Bill provides for filing of cases only by a court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment, is situated. Further, where a complaint has been filed against the drawer of a cheque in the court having jurisdiction under the new scheme of jurisdiction, all subsequent complaints arising out of Section 138 against the same drawer shall be filed before the same court, irrespective of whether those cheques were presented for payment within the territorial jurisdiction of that court. Further, it has been provided that if more than one prosecution is filed against the same drawer of cheques before different courts, when this fact is brought to the notice of the court, the court shall transfer the case to the court having jurisdiction as per the new scheme of jurisdiction.



Read more at:http://economictimes.indiatimes.com/articleshow/47029040.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst 

Frauds in Indian banks have increased: Deloitte survey-LiveMint

Most of the incidents were linked to retail banking, including frauds linked to Internet banking, automated teller machines (ATMs) and debit and credit cards
Incidents related to fraud are increasing in Indian banks, a survey has found.
Audit and consultancy company Deloitte Touche Tohmatsu Ltd surveyed 44 banks in the second edition of its India Banking Fraud Survey, in which more than 50% of the respondents said fraud-related incidents increased at least 10% in the last two years.
Most of the incidents were linked to retail banking, including frauds linked to Internet banking, automated teller machines (ATMs) and debit and credit cards, apart from identity frauds.
 
The banks surveyed pointed to an average loss of Rs.10 lakh per fraud in retail banking, while a similar incidence in the corporate banking side led to a loss of Rs.2 crore.
In corporate banking, most of the frauds are linked to diversion of funds and siphoning off of money, while identity thefts and fraudulent documentation were mainly the routes for frauds in private banking.
 
“Majority of the respondents indicated that less than 25% of the reported fraud loss value is recovered,” Deloitte said.
Frauds in Indian banks are discovered mostly through customer complaints, internal whistleblowers, during the reconciliation of accounts or through automated data analysis or transaction monitoring software, Deloitte said.
 
K.V. Karthik, senior director, financial advisory services at Deloitte said banks have to pull up their socks in monitoring loans both before giving them and during their usage.
“In retail loans, it is important to prevent frauds when taking the customer on board not after you give the loan because it is very difficult to check where the funds are used. In corporate banking, because the relationships are much more long term and are renewed frequently, end use monitoring is important,” Karthik said.
 
He added that public sector banks are increasingly becoming sensitive to increasing investments to ensure fraud prevention.
“The mentality of public sector banks is changing. Private banks are anyway on par with the foreign banks,” Karthik said.
The survey was conducted between August and September 2014. The majority of banks surveyed had an asset size above Rs.5,000 crore



LTC Exemption: Rules Relaxed for Unmarried Government Employees-NDTV-23.04.2015

Unmarried central government employees can now avail benefits of Leave Travel Concession (LTC) for visiting any part of the country, as per a relaxation in the rule, which earlier restricted them to use the facility for going to their hometown only.

"It has been decided that the facility of conversion of home town LTC to allow travel to different parts of the country, under the special dispensation scheme, will also apply to an unmarried central government servant, who is eligible to avail the benefit of LTC to visit hometown every year," a fresh order issued by the Department of Personnel and Training (DoPT), said.

The facility may be availed by converting one occasion of hometown LTC out of the block of four years, it said.
As per norms, an eligible government employee gets to and fro journey reimbursement after availing LTC. However, employees are supposed to undertake the visit from the place of their posting to their hometown.

The DoPT has been allowing special dispensation to the government servants for taking LTC from time to time by relaxing rules.
Presently, one such dispensation in operation is the relaxation for the government servants to travel by air to visit North East region, Jammu and Kashmir or to the Andaman and Nicobar Islands by converting one block of hometown LTC available to them.

The DoPT has received references seeking clarification on the admissibility of conversion of hometown LTC facility into travel to different parts of the country, which is permissible under special dispensation, to such unmarried government servants.
The matter was examined in consultation with the Ministry of Finance and it has been decided to allow unmarried government employees to visit any other part of the country under the LTC scheme, it said

Mandatory leave for select bank employees, says RBI Economic Times 23.04.2015

MUMBAI: A rise in banking frauds has forced the Reserve Bank of India to ask banks to send employees working in treasury business, risk management and currency chests among others on mandatory 10 days leave. The dictate comes after the banking regulator in its inspection observed that the policy of 'mandatory leave' is not being implemented effectively, leading to an increase in operational risk across banks.

The bank should identify such highly sensitive positions where the bank will, without any prior intimation, advise the employee to be away from his desk for a specified number of working days each year,'' said the RBI in a statement.

The central bank has asked banks to immediately implement the mandatory leave policy if not already done.

Banks in consultation with the board would have to put in place an exhaustive list of sensitive positions or areas of operations to be covered

under 'mandatory leave' and under 'away from desk' requirement.

``Implementation of such policy would be covered under the Pillar 2 review of banks' risk management system by the Reserve Bank of India,'' said the central bank.
 

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