HENCY R SHAH AND ASSOCIATES

  Bob World Fraud: A wake-up call for the banking industry A recent fraud at Bank of Baroda's Bob World app has raised concerns about the security of digital banking platforms in India. According to a report by Al Jazeera, bank employees linked unauthorized mobile numbers to customer accounts in order to onboard them onto the app without their consent. These unauthorized mobile numbers included those of bank staff, managers, guards, their relatives, and bank agents in remote areas. The fraudsters then used these unauthorized mobile numbers to access customer accounts and steal money. An internal audit by Bank of Baroda revealed that the fraudsters had stolen Rs 22 lakh from 362 customers. This fraud is a wake-up call for bank customers in India. It is important to be aware of the risks associated with digital banking and to take steps to protect your accounts. Here are a few tips: Be careful about sharing your personal information. Do not share your bank account details, mobil...

Consequences of an Inoperative PAN: Financial Transactions You Can't Do Without PAN-Aadhaar Linkage  The government introduced the Permanent Account Number (PAN) to make it easier to access taxpayer information and match it with their investments, loans, and business activities. This helps detect and prevent tax evasion and broaden the tax base. According to the Income Tax Act of 1961, it became mandatory to link Aadhaar number with PAN by June 30, 2023. Failing to do so would render PAN inactive from July 1, 2023. If PAN is not linked with Aadhaar, it can create difficulties in certain transactions. For example, routine banking transactions such as depositing more than Rs. 50,000 in a bank account, paying insurance premiums exceeding Rs. 50,000, or applying for credit/debit cards may be affected. Senior citizens (except those aged 80 years or more) who haven't linked PAN with Aadhaar may also face consequences. However, residents of Assam, Jammu and Kashmir, Meghalaya, non-res...

The Reserve Bank of India (RBI) has made the decision to withdraw the ₹2000 denomination banknotes from circulation, although they will still be considered legal tender. The RBI has advised banks to immediately stop issuing ₹2000 banknotes. The ₹2000 note was introduced in November 2016 following thxe withdrawal of the ₹500 and ₹1000 banknotes at that time. According to sources cited by news agency ANI, the ₹2000 banknotes will continue to be legal tender even after September 30th. The RBI expects that within the four-month timeframe, most of the ₹2000 notes in circulation will be returned to banks. The RBI emphasizes that this is a routine exercise and urges the public not to panic. The RBI stated that the objective of introducing the ₹2000 banknotes was achieved once banknotes in other denominations became readily available. The printing of ₹2000 banknotes was discontinued in 2018-19. The majority of ₹2000 banknotes, about 89%, were issued prior to March 2017 and have reached their e...

Professionals under PMLA On May 3rd, 2023, the Central Government issued a notification bringing practicing professionals in the field of Chartered Accountancy, Company Secretaries, and Cost and Works Accountants under the ambit of the Prevention of Money Laundering Act (PMLA) if they execute any financial transactions on behalf of clients. This notification has been issued under sub-clause (vi) of clause (sa) of sub-section (1) of section 2 of the Prevention of Money-Laundering Act, 2002 (15 of 2003). The following financial transactions carried out by a relevant person on behalf of his or her client, in the course of his or her profession, will be considered an activity for the purposes of the PMLA: 1. Buying and selling of any immovable property. 2. Managing of client money, securities, or other assets. 3. Management of bank, savings, or securities accounts. 4. Organization of contributions for the creation, operation, or management of companies. 5. Creation, operation, or managemen...

"Empowering Entrepreneurs: Celebrating the 8th Year of Mudra Loans and counting" MUDRA loan is a financial initiative launched by the Government of India on 8th April 2015, to provide financial support to small and medium enterprises (SMEs) in India. MUDRA stands for Micro Units Development and Refinance Agency Ltd. It is a subsidiary of the Small Industries Development Bank of India (SIDBI) and acts as a refinancing agency for microfinance institutions, which provide loans to small businesses. The primary objective of MUDRA loan is to promote entrepreneurship and boost the growth of small businesses in India by providing them with easy access to credit. The loan scheme is available for various sectors such as manufacturing, trading, services, and agriculture. MUDRA loans are classified into three categories based on the loan amount, namely, Shishu, Kishor, and Tarun. Shishu: This category covers loans up to INR 50,000, which are typically provided to small businesses that ar...

  US Banks Collapse: Could the US bank crisis be blessing in disguise for Nifty bulls, OR are we heading back to 2008? A week after Silicon Valley Bank and Signature Bank failed, First Republic Bank is considering a sale following a dramatic 60 percent drop in its stock price over the past week. The bank also received $70 billion in emergency loans from JP Morgan Chase and the Federal Reserve. Eleven of the biggest U.S. banks Thursday announced a $30 billion rescue package for First Republic Bank in an effort to prevent it from becoming the third to fail in less than a week and head off a broader banking crisis. The rescue package brought back memories of the 2008 financial crisis, when banks collectively came to the aid of weaker banks in the early days of the crisis. Banks then bought each other in hurried deals in order to keep the crisis from spreading further. With FIIs pulling out more dollars from India after back-to-back collapse of three US banks, including Signature and...

G20, IMF, FSB to work on policy formulation of crypto assets The Indian Administration has proposed a joint specialized paper by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to "integrate the macroeconomic and administrative points of view of crypto-resources". These associations are supposed to introduce their joint paper during the fourth G20 Money Clergymen and National Bank Lead representatives Meet, planned next October. This would assist in the detailing of a planned and far reaching strategy with drawing closer to crypto resources, when numerous nations including India didn't have an administrative system for crypto resources. A few conversations on the issue are normal over the span of G20 gatherings this year, which will help "construct informed banter inside the G20 gatherings and lead to the detailing of composed and extensive strategy approach," as per a Press Data Department discharge. The IMF-JSB paper is "expe...

RBI puts on hold NUE licensing RBI is said to have put on hold licensing of the New Umbrella Entity (NUE) network, a fintech institution planned as a rival to the National Payments Corporation of India (NPCI). Six Groupings, which included Facebook, Google, Amazon, Flipkart, and others, had applied for NUE licenses. RBI will not grant permission to any of the six consortiums to commence business as all of them have fallen short of the RBI's expectations. It looks like none of the applicants have proposed anything novel or a great technology breakthrough that would have made RBI look over it, almost all of the plans were similar to that of the NPCI, which did not enthuse the RBI. NPCI, established by the RBI and banks, runs the Unified Payments Interface (UPI) and other payment systems. NUEs were supposed to set up and operate a new retail digital payment system and manage clearing and settlement systems that could be an alternative to the bank-promoted NPCI. The applica...

₹ to use as foreign trade currency   Use of rupee in foreign trade:  In order to facilitate international trade, Sri Lanka has agreed to utilize ₹. It occurs shortly after the Indian government announced it was looking into ways to include nations who are particularly short on dollars in the Indian rupee trade settlement process. Notably, the Indian government has been attempting to entice nations with dollar shortages to use its rupee settlement system since July of this year. The Indian rupee trade settlement system allows for the use of the Indian rupee in place of dollars and other major currencies in all international transactions. The RBI announced the creation of a system to conduct foreign trade in Indian rupees on July 11. While the market determines the exchange rate between the trading partners, the method will allow all exports and imports to be denominated and billed in Indian rupees. In order to educate stakeholders on the rupee trade, the Indian Fina...

Exploring tech, legal provisions to keep e-Rupee transactions 'anonymous' RBI is exploring technological solutions to keep retail transactions using the digital rupee ‘anonymous’. RBI could also explore legal provisions to keep the transactions anonymous. It will weigh its options as things evolve but will ensure the anonymity of transactions up to a certain limit, which is a basic feature of cash transactions. The basic distinction between Unified Payments Interface (UPI) transactions and digital rupee transactions is that UPI is a payment mode, which involves the intermediation of banks, and the digital rupee is money. So, all UPI transactions hit banks’ core banking solution (CBS). But in the case of a digital rupee, once the money is withdrawn from the bank and reaches the customer’s wallet, the transaction that takes place following this process is essentially a transfer of money between two wallets. Experts have suggested that when a bank ...

IMF, World Bank sound alarm about global economic outlook T he International Monetary Fund, World Bank and others raised concerns about a worsening global outlook, while hopeful that China’s reopening will help support world growth. IMF Managing Director Kristalina Georgieva said indicators show further downgrades to global growth are likely. Speaking Friday after a meeting with China’s Premier Li Keqiang in Anhui province, Georgieva said China’s recalibration of its Covid policies would be a good thing for the domestic economy and the rest of the world. The IMF currently forecasts global growth will be 2.7% next year, slowing from 3.2% this year. The meeting was part of the “1+6” dialogue that China holds every year with heads of the IMF, World Bank, OECD, World Trade Organization and others. David Malpass, head of the World Bank, was also downbeat about the global outlook. "I’m deeply concerned that the world is at risk of a global recession,” Malpass said, warning of the potent...