Page 8 - Banking Finance November 2022

BANK UPDATE

One of the two people said that iden- The matter started with specific infor- towards electric vehicles and green
tified bank branches would offer door- mation against ICICI Prudential, which hydrogen to be classified under the
step delivery banking on payment of a led to the probe. The company alleg- priority sector lending.
nominal user-fee. There may be a uni- edly had availed of and utilised "ineli-
"Some lenders made these suggestions
versal phone number to request these gible ITC".
during various individual interactions
services.
with the Reserve Bank," said an execu-
Doorstep banking services have al- SBI ready to open Rs. tive aware of the developments.
ready been mandated by the Reserve
trade account with Rus- Banks are of the opinion that bringing
Bank of India (RBI) which gave banks
such loans under priority lending list
sian banks
two separate deadlines-31 December
will help plug financing gaps in these
2017 and again 30 April 2020. But pan- State Bank of India, which was earlier
sectors and help lenders meet their
India application remains weak and reluctant to open rupee trade ac-
priority sector lending targets.
patchy. The government through a counts with Russian banks, seems to
"Expanding the PSL category will also
fresh notification now wants to make have moved forward on this front and
help lenders meet their requirements,
these services mandatory with strict is looking for a tie-up with Russian
which they are unable to do presently
instruction for time-bound implemen- banks. Sources told TNIE that SBI and
tation. It also wants banks to con- a few other banks have sought permis- and are required to buy priority sector
lending certificates," said another ex-
stantly expand the scope of such ser- sion from the RBI to open rupee trade
vices to cater to large sections of accounts with Russian banks. ecutive aware of the matter. Banks
needy population across the country. are mandated to provide 40% of their
Earlier, it was reported the SBI was not
adjusted net bank credit to priority
keen on tying-up with Russian banks to
sectors.
Insurers, banks accused of facilitate trade in local currency, fear-
ing sanctions on Russia from the US Last month, the Indian Banks' Associa-
Rs. 800 crore GST fraud
authorities. tion (IBA) set up a committee to inves-
In a major embarrassment for top in-
tigate various aspects of sustainable
surance companies and intermediaries, However, it seems pressure from the
financing and lending with Environ-
RBI has brought about the change in
such as banks and NBFCs that distrib-
mental, Societal and Governance (ESG)
SBI's stance. "SBI will have to look for
ute policies, the Directorate General of
issues in focus.
tying up with a Russian Bank with no
Goods and Services Tax Intelligence
sanctions," an exporter told. IBA chief executive Sunil Mehta told
(DGGI) has detected an alleged fraud
that the banking body will examine the
of over Rs 800 crore in availing input Recently, RBI officials and bankers held
committee's recommendations and
tax credit (ITC), without underlying a meeting in this regard with finance
accordingly make a formal representa-
supplies. ministry and commerce ministry offi-
tion to the regulator.
cials. TNIE had also reported that the
Under the GST architecture, credit for
framework for opening up of Vostro
taxes paid by entities in the value chain
accounts has already been laid down
is refunded in the form of input tax 3 US-based economists
by RBI. A vostro account is opened by
credit. Sources said the Mumbai unit given Nobel Prize for work
a domestic bank with a foreign corre-
of DGGI has come across around 15
spondent bank to act as an agent for on banks
insurance companies, who were alleg-
the domestic bank.
edly claiming ITC, without the supply This year's Nobel Prize in economic
of goods and services. Recovery of sciences has been awarded to the
around Rs 217 crore has been re- Banks for including EVs, former chair of the U.S. Federal Re-
ported as companies have resorted to serve, Ben S. Bernanke, and two U.S.-
Green Hydrogen in priority
voluntarily paying cash, which is al- based economists, Douglas W. Dia-
lowed under the Central GST Act. Fur- lending mond and Philip H. Dybvig, "for re-
ther investigation is under way. Banks have pitched for including loans search on banks and financial crises."
8 | 2022 | NOVEMBER | BANKING FINANCE