Page 6 - Banking Finance July 2024

BANK UPDATE

SBI sanctioned 20,000 digi- an immediate response. A total fine of that forex transactions through credit
Rs 1,66,25,000 was issued by the FIU cards would be covered under the
tal small biz loans against the bank on alleged charges of scheme and charged 20% tax collected
SBI has sanctioned around 20,000 violation of the anti-money laundering at source (TCS) beyond the threshold
loans of Rs 10 lakh to Rs 50 lakh for law, the order said. of Rs. 7 lakh per fiscal.
small businesses as part of a digital
Senior bank executives decided, at a
lending pilot that started in December, World Bank retains India's meeting held earlier this month, to
a senior official said.
growth forecast for FY25 seek an extension till June 30 to fully
Having been satisfied with the results calibrate their systems to report such
of the pilot, under which a customer The World Bank retained its growth transactions. "Earlier this month a
can get a loan sitting at home, the forecast for India at 6.6 per cent for communication was received from the
country's largest lender is now broad- FY25. RBI on the preparedness for imple-
ening the loan amounts to Rs 5 crore, "India will remain the fastest-growing menting the guidelines," said one of
Deputy Managing Director Surendra of the world's largest economies, al- the executives, who did not wish to be
Rana said at a banking conference. though its pace of expansion is ex- identified.

"We rolled out the Rs 10-50 lakh model pected to moderate. After a high Banks need more time for customer
in December and I am happy to share growth rate in FY 2023/24, steady awareness, staff training and system
that we have already sanctioned growth of 6.7 per cent per year, on calibration for smooth implementa-
around 20,000 loans through this pro- average, is projected for the three fis- tion, the executive said. In its commu-
cess and this is working very smoothly. cal years beginning in FY 2024/25," the nication to banks and the Indian Banks'
Now, we are escalating it to Rs 5 multilateral bank said in its latest bian- Association (IBA), the RBI suggested
crore," he said. nual Global Economic Prospects. that they work out a standard operat-

For FY26 and FY27, the World Bank ing procedure for uniformity and
FIU imposes over Rs. 1.66 projected India's economy to grow at smooth implementation, the executive
crore penalty on Axis 6.7 per cent and 6.8 per cent, respec- said.
Bank tively. In FY24, the National Statistical
Office has estimated gross domestic Banks need to look be-
The Financial Intelligence Unit has
product (GDP) to have grown at 8.2 yond bulk deposits to
slapped a fine of more than Rs 1.66
per cent.
crore on Axis Bank for "failing" to put fund loans
in place a mechanism to detect and Banks seek one more RBI said that banks must reduce their
report suspicious transactions carried reliance on wholesale deposits to fund
out at one of its branches by creating month to comply with in- loans and be watchful of the risks as-
a "fraud" account in the name of ternational card spend sociated with their advances and trad-
counter-terrorist commando force ing exposures amid interest rate fluc-
NSG. rule tuations.
The federal agency has issued an order Lenders have sought a one-month ex- "Considering the dynamic nature of the
on June 3 under Section 13 of the Pre- tension from the government to com- interest rate risk, banks may have to
vention of Money Laundering Act ply with the Liberalised Remittance address both trading and banking book
(PMLA) that empowers its Director to Scheme (LRS) for international credit risks, especially in the light of moder-
impose a monetary penalty on a re- card spends, said people familiar with ating net inter margins," the RBI said
porting entity (like Axis Bank) if the the matter. in its annual report for FY24. "On the
agency finds that its designated direc- The scheme allows Indian residents to liabilities side, it is imperative to focus
tor on the board or any of its employ- remit up to $250,000 abroad in a finan- on diversification of deposit sources as
ees failed to comply with the obliga- cial year for permissible purposes such reliance on bulk deposits heightens
tions mandated under the said law. as education, travel and investment. sensitivity to interest rate fluctua-

A query sent to Axis Bank did not elicit Last year, the government announced tions," it added.

6 | 2024 | JULY | BANKING FINANCE