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Tag: banking

How PNB scam exposes the biggest flaws in the Indian banking system

How PNB scam exposes the biggest flaws in the Indian banking system

Finance
KOLKATA: Amid the blame game between Punjab National Bank (PNB) and other affected lenders in the Rs 11,300-crore scam, the elaborate web of deception has served to expose the biggest flaws in the Indian banking system – weak risk management practices and glaring over sight lapses. While international banks tightened supervision and corporate governance after the subprime credit crisis in 2008, most Indian banks appear to have remained laggards. Doubts are now being raised in several quarters as to how PNB officials at Mumbai’s Brady House branch continued to issue letters of undertaking (LoU) against import receipts from Nirav Modi and his firms for seven long years without attracting management supervision. Overseas branches of other lenders such as Axis Bank or Allahabad Ba
Open Banking 'revolution' to challenge banks' dominance

Open Banking 'revolution' to challenge banks' dominance

Business
A fundamental change to the way people can bank, manage and spend their money in the digital world is under way.A change in the law and the start of the Open Banking system means people can allow businesses, other than their bank, to access their financial data.Organisers say this has the potential for consumers to get better deals, such as cheaper overdrafts, and to speed up the switching process.But warnings over fraud risks have already been issued.As part of the same legislation, surcharges for payments made by credit card, debit card, or other payment systems such as PayPal will be banned.How it worksTraditionally, banks have held all our information about our past transactions and spending habits.A change in UK law now means that banks and building societies must allow regulated busi...
Everyone is upset about India's banking mess except NBFCs. Here's the reason why

Everyone is upset about India's banking mess except NBFCs. Here's the reason why

Finance
When Infrastructure Development and Finance Co (IDFC) was granted universal banking licence in 2014 from among 26 applicants, it was the envy of those who missed out on the coveted prize. Three and a half years later, both investors and the managements that were not lucky enough, are smiling. A surge in liquidity, regulatory arbitrage, and the crippled state of banks converged to make the non-banking finance company (NBFC) business model a success with equity investors latching on to any business that would reflect the Indian financial services growth without its baggage of bad loans. Life has come a full circle with premium attached to banks shrinking while NBFCs gaining traction. IDFC Bank which came into being in 2015 has lost 15.91 per cent since, while its parent IDFC gained 16.33...