Google

Jan 22, 2014

Banks not to credit "account payee" cheque proceeds to third party



In a circular issued on 22nd January 2014 the RBI has strictly prohibited the banks from crediting  'account payee' cheques to the account of any person other than the payee named therein. RBI reiterated its previous circulars and instructed that banks should strictly collect ‘account payee’ cheques only for their payee constituents.

Banks may, however, consider collecting account payee cheques drawn for an amount not exceeding Rs.50,000/- to the account of their customers who are co-operative credit societies, if the payees of such cheques are the constituents of such co-operative credit societies

Bank notes issued prior to 2005 will be withdrawn from 31st March 2014

The Reserve Bank of India has today (22nd January 2014) advised that after March 31, 2014, it will completely withdraw from circulation all banknotes issued prior to 2005. From April 1, 2014, the public will be required to approach banks for exchanging these notes. Banks will provide exchange facility for these notes until further communication. The Reserve Bank further stated that public can easily identify the notes to be withdrawn as the notes issued before 2005 do not have on them the year of printing on the reverse side.

The Reserve Bank has also clarified that the notes issued before 2005 will continue to be legal tender. This would mean that banks are required to exchange the notes for their customers as well as for non-customers. From July 01, 2014, however, to exchange more than 10 pieces of `500 and `1000 notes, non-customers will have to furnish proof of identity and residence to the bank branch in which she/he wants to exchange the notes.

The Reserve Bank has appealed to the public not to panic. They are requested to actively co-operate in the withdrawal process.

Major lenders for Kingfisher Airlines

SBI has the largest exposure to Kingfisher at Rs 1,600 Cr, followed by Punjab National Bank and IDBI Bank at Rs 800 Cr each. Bank of India and Bank of Baroda have an exposure of Rs 650 Cr and Rs 550 Cr, respectively.

9000% dividend !!!!!!!!!!!!!!!!!!!

Tamilnad Mercantile Bank (TMB) has declared an interim dividend of 9,000%. That’s actually Rs 900 per share of Rs 10 each, for the fiscal ending March 2014. The board of this Tuticorin-headquartered bank took a decision to this effect at a meeting held on January 18. Bank sources said this would translate into an outgo of Rs 25.6 Cr (unchanged from last year). The 9,000% interim dividend is said to be the highest in the banking industry and this is the second year in a row that the bank has declared such a high dividend. It may be recalled that the bank’s board had approved a dividend of Rs 750 per share for 2008-09 and Rs 1,000 per share the following year, but could not make the payment as the annual general meetings for 2009-10 and 2010-11 were not held due to legal issues. The AGMs for the subsequent years have also not been held till date. As a result of the legal tangles, the bank has been compelled to hold back some major decisions, including the plan to go for an initial public offering. Bank sources said TMB’s shares continue to trade at between Rs 60,000 and Rs 65,000 a share in the informal market.

FII can invest upto 74% in Federal Bank

The Cabinet Committee on Economic Affairs has approved the proposal of Federal Bank for increase in foreign investment up to 74%. This nod is, however, subject to the condition that aggregate foreign institutional investor shareholding will not exceed 49% of the paid-up capital of the bank. The approval will result in a foreign investment of Rs 1,400 Cr into the country, an official release said. As at end December 2013, FIIs had an aggregate holding of 43.34% in the private sector lender.