CORPORATE GOVERNANCE
Report
of SEBI committee (India) on Corporate
Governance defines ‘corporate governance as the acceptance by management
of the inalienable rights of shareholders as the true owners of the corporation
and of their own role as trustees on behalf of the shareholders. It is about
commitment to values, about ethical business conduct and about making a
distinction between personal & corporate funds in the management of a
company.”
The
definition is drawn from the Gandhian principle of trusteeship and the
Directive Principles of the Indian Constitution. Corporate Governance is
viewed as ethics and a moral duty
It
Key elements of good corporate governance principles include honesty, trust and
integrity, openness, performance orientation, responsibility and
accountability, mutual respect, and commitment to the organization.
COMMERCIAL
PAPER
A
short term money market instrument issued as a usance promissory note to meet
short term funding requirements. Companies, Primary dealers, All India
financial institutions can issue. Individuals, Banking companies, other
corporate bodies, NRIs, FIIs (within permitted limits) can invest.
Minimum 7 days and maximum up to one year
Minimum 5 lacs and in multiples of 5 lacs.
Tangible Net worth as per latest audited balance sheet is
not less than Rs.4.00 Cr.
Company should have got sanctioned working capital limits
from Banks/FIs.
CERTIFICATE OF DEPOSIT:
Certificate of Deposit [CDs] is a negotiable money market
instrument and issued in demat form or as a usance promissory note for funds
deposited at a bank or other eligible financial institutions for a specified
time period.
Eligibility: CDs can be issued by SCB [excluding RRBs and LABs] and
Select financial institutions
Minimum size: Rs.1.00 lacs in multiples of Rs.1.00 lacs thereafter.
Period:
Minimum 7 days Maximum One year
Banking Ombudsman
June 15, 1995 – RBI announced the Banking Ombudsman Scheme
, revised wef. 14.06.2006, Amended in 2007 and 2009.
Ombudsman: RBI Governor
appointed for 3 years and extension of 2 years
subject to maximum age of 65 years
Essential Requirements for complaint: The complainant had,
before making a complaint to the Banking Ombudsman made a written
representation to the bank and the bank had rejected the complaint or the
complainant had not received any reply within a period of month after the bank
received his representation or the complainant is not satisfied with the reply
given to him by the bank.
A period of 1 year has not lapsed
Not a subject matter settled through Ombudsman in previous
proceeding and not pending with any other court
Not frivolous or vexatious in nature.
Limit
of amount: The compensation payable to the complainant is limited to the amount
arising directly out of the act or omission of the bank or Rs 10 lakhs
whichever is lower.
Award
Complaint if not settled within 1 month from the date of
receipt of complaint Banking Ombudsman may pass an award after affording the
parties reasonable opportunity to present their case.
Binding of Award: Within 30 days of receipt of award it has
to be presented to the Bank, and a letter of acceptance of the award in full
and final settlement of his claim in the matter
The bank shall within one month – comply and intimate the
compliance to ombudsman unless it chooses to appeal.
Review Application: Bank may file review application before
the Review Authority within one month from the date of receiving the copy of
Award if the bank opines the award
against it.
(In
case of appeal by a bank, the period of thirty days for filing an appeal shall
commence from the date on which the bank
receives letter of acceptance of Award by complainant)
Provided
that the Appellate Authority may, if he is satisfied that the applicant had
sufficient cause for not making the appeal within time, allow a further period
of not exceeding 30 days.
As
per the amendment dated 02/03/2009 In case of complaints arising out of credit
card operations, the Banking Ombudsman may also award compensation not
exceeding Rs 1 lakh to the complainant, taking into account the loss of the
complainant’s time, expenses incurred by the complainant, harassment and mental
anguish suffered by the complainant”.
CONSUMER
PROTECTION ACT AND BANKING BUSINESS
COPRA – enacted in 1986 implemented w.e.f 15.04.87
Comprehensively amended on 17.12.2002 implemented
w.e.f.15.03.2003
Consumer : Person
buying goods or hires services for consideration for his/her use. All Banking
services where deficiency in service is observed, the consumer can file a
complaint under COPRA.
·
Limitation : 2 years from the date of cause of action
Pecuniary ( financial) jurisdiction of different
authorities:
District Forum Up to Rs.20.00 lacs
State Commission
Up to Rs.100.00 lacs
National Commission Above Rs.100.00 lac
Time Limits for disposal:
Admissibility of complaint – within 21 days
Decision on complaint – Without analysis or testing of
commodities – 3 months
With analysis or testing of commodities – 5 months
National and State Commission – 3 months
BCSBI - Banking Codes and
Standard Board of India
As
per recommendation of committee headed
by shri S.S. Tarapore to improve customer service RBI has set up BCSBI as a
society on 18.02.2006 with its registered office in Mumbai
This
is a voluntary code which sets minimum standards of banking practices for banks
to follow when they are dealing with Individual customers.
BCSBI
has formulated a code of bank's
commitment to customer ( code of BCTC) which mentions minimum standard of
services a bank should undertake to
provide to its individual customer not
corporates
Important provisions of the
code-
Disposal
of complains - acknowledge
the complaint within 7 days and should reply within 30 days. Display the name
of nodal officer at branch, regional manager, banking ombudsman
Code
for recovery agent-
should approach at his residential address only between 7 am to 7 pm
New
account
-opening- if customer is not happy after opening any account in branch bank
will allow to change the account or close as per request of the customer
without any charge within a period of 14 days
2-3 month notice to shift the
branch
Statement
of account free of cost at monthly interval
Settlement
of death claim within 15 days
Return
of securities within 15 days from the date of
closure of loan account
Transfer
of loan account within 21 days
Copy
of loan documents to borrower at bank's cost
Closure
of account within 3 days
Right to information act-
RTI
act came in to effect from October 12,2005
Applicable
to Whole India except J&K
Right
to get information - access to the information by way of inspection, taking
note, taking certified samples to the material obtain electronic copy of the
information
All
citizens can apply barring corporates and companies
Applicant
need not to give any reason
In
case of bank public information officer are appointed by its board of directors
eg. FGM is ACPIO in respective zone.
Fee
for application Rs.10/- can be paid in form of DD, banker cheque, IPO or by
cash
Where
applicant request copies of record they have to pay Rs.2/ per copy barring BPLs
Within
30 days PIO has to provide information or reject from the date of application.
If delay information commissioner can levy penalty Rs.250/ per day (maximum
25000/-)
As
per this act all public authorities are required to maintain record from
minimum period of 20 years.
What is Para Banking:-
In recent past banks are
providing various ancillary services such as -
·
opening
and operating Demat Accounts for securities and shares transactions
·
Sale
of Units of Mutual Funds
·
Portfolio
Management services
·
Wealth
management services
·
Merchant
Banking Services
·
Bancassurance
- Sale of Insurance Products [life as well as non-life]
·
Setting
up of subsidiary to carry out insurance business
·
Credit
Cards, Tax collections
·
Utility
payment services
·
-Providing
facility of purchase of Railway /Airway – tickets
·
Stamp
Vending ----etc. these activities are known as
Para Banking activities
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