'When you think of cross-border payments, the first things that come to mind are risk, compliance, taxation, speed, and cost.'
The cost of remittances across various modes has come down significantly.
State Bank of India (SBI) is willing to work with Russian banks not facing sanctions and remain on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network to open a special rupee vostro account (SRVA) for invoicing in Indian currency. The country's largest lender in a statement said it has not been identified as the nodal bank for handling Russia-related transactions. In July, the Reserve Bank of India (RBI) allowed banks in India, including SBI, to open an SRVA to promote invoicing in Indian rupee, subject to certain safeguards. Accordingly, the bank in a statement said it is "making necessary arrangements and processing requests received from various banks, including Russian banks", following guidelines laid out by the RBI.
The World Bank has announced that it will stop all its programmes in Russia and Belarus with "immediate effect" in response to Moscow's military operations in Ukraine and "hostilities" against the people of the war-torn country. On February 24, Russian forces launched military operations in Ukraine, three days after Moscow recognised Ukraine's breakaway regions - Donetsk and Luhansk - as independent entities. The decision comes as a large number of countries, organisations and businesses are severing ties and have imposed sanctions on Russia over the country's invasion of Ukraine, and with Belarus for its support and cooperation with Moscow.
The ruble has recouped most of its losses and become the top-performing currency globally. It continues to gain and is up 60 per cent against the US dollar from its lows in the first week of March. The ruble appreciated to 83 to the dollar intraday on Tuesday against a record low of 139 on March 7.
The government may soon give the green light to bilateral trade between Russia and India in their national currencies to avoid any trade disruptions, multiple people aware of the matter said. While the Department of Commerce has recommended the proposal, an announcement is likely to be made by the finance ministry after further deliberations between the Department of Economic Affairs and Department of Financial Services. "The finance ministry will take a call on how to peg the two currencies," a senior government official told Business Standard. In the past, the two nations have had rupee-rouble trade, and when such an arrangement is implemented again, it will bypass the sanctions imposed on Russia by the West.
The Centre is unlikely to announce an agreement over payment mechanism with Russia until a ceasefire is declared in the Ukraine war, said people in the know. An inter-ministerial group headed by the finance ministry has been meeting regularly for over a month to analyse and discuss payment mechanisms that can work under the current circumstances and ensure the trade between India and Russia is not disrupted. The US had recently said that there would be consequences for countries actively attempting to "circumvent or backfill" American sanctions against Russia.
Subhash Shankar Parab, a key accused in the Rs 7,000 crore diamantaire Nirav Modi bank fraud case, was "deported" from Cairo on Tuesday after a long diplomatic and legal process, officials said in New Delhi. A CBI team had gone to Egypt's capital to bring back 50-year-old Parab, who was allegedly kept in illegal confinement in a Cairo suburb by Modi, the fugitive diamantaire, they said. The CBI had been chasing Parab, deputy general manager (finance) in Modi's Firestar Diamond and understood to be a key witness to the Letters of Undertaking (LoU) submitted to the Punjab National Bank (PNB) to siphon off over Rs 7,000 crore, they said.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is the world's main banking messaging service which links around 11,000 banks and institutions in more than 200 countries, including India.
The total number of arrests by the CBI has risen to six -- four PNB officials, a retired employee of the bank, and an authorsied signatory of Nirav Modi's company -- after Monday's development.
Park is charged with one count of conspiracy to commit computer fraud and abuse and one count of conspiracy to commit wire fraud.
The CBI on Wednesday directed him to contact the embassy of India in a country where he is staying so that his travel to India can be arranged
The message is clear: The 60-year-old wise uncles need to handhold the 40-year-old entrepreneurs when, obsessed with ambition and greed for growth, they become a victim of hubris, points out Tamal Bandyopadhyay.
With Western corporations, including Microsoft, AWS and Oracle, shutting down their operations in Russia, the rest of the world has become acutely aware of its dependence on a clutch of technology service providers.
Experts say the recent Rs 14,000-crore PNB fraud could have been avoided had there been an integration of PNB's CBS with its SWIFT system
The country's largest lender State Bank of India has seen a perceptible increase in the number transactions happening at its multiple digital channels, with the percentage moving from 60 per cent in the pre-pandemic period to 67 per cent currently, chairman Dinesh Khara said. The rise in the number of digital transactions at the bank was largely driven by pick up in e-commerce during the pandemic-induced lockdown, which restricted movement, he said.
Use of blockchain technology will ensure that banks will not be blindsided like in the case of the Nirav Modi-Mehul Choksi blowout at PNB, says Raghu Mohan.
The issuance of NBWs by a court also opens door of seeking Red Corner notices against both of the accused from the Interpol.
It is up to the bank management to decide which application gets to interact with the CBS
Iran is India's largest importer of tea in value terms while in terms of volume, it is the second largest after Russia
Those who consider the rupee as a proxy for virility have started thumping their chests and dreaming of dethroning the dollar from its coveted position, observes Tamal Bandyopadhyay.
The RBI on April 6 directed all payments service providers to make sure "that the entire data relating to payment systems operated by them are stored in a system only in India."
'If you give your ID and password to somebody else, how can anybody blame the technology for that problem?'
She was the managing director and the CEO of PNB since August 14, 2015 before being appointed in Allahabad Bank on May 6, 2017.
Penalty must act as a deterrent. If it is too low, it could encourage the regulated entities to lap up penalty instead of complying with the norms, suggests Tamal Bandyopadhyay.
Secretary of State Mike Pompeo said that countries like India, if it gets the exemption, would be asked to bring down their oil imports from Iran to zero in six months' time.
The agency on Monday questioned three general managers of the Punjab National Bank who have handled the -International Banking Division and Treasury department of the bank, officials said without revealing their identity.
The problem here is that internal auditors are good at accounts, but they are not trained to track foreign exchange transactions
Exchange rates play an important factor in international fund transfers
The PNB fiasco falls into a family line that involves non-fund limits - read contingent liabilities which are off-books. Harshad Mehta did it with bankers' receipts in 1992. Ketan Parekh exploited the ignorance of bankers who did not know the difference between a cheque and a pay-order. And the RBI blinked when it failed to insist the SWIFT platform be linked to the core banking solution. Raghu Mohan & Abhijit Lele trace the banking mess that was just waiting to happen.
'For years, the RBI has been warning banks on probable frauds in bank guarantees and advised them to exercise due care.' 'PSB staffers feel their jobs are secured, hence there is no need to be vigilant and exercise financial prudence.'
'NiMo having skipped, the next best bet is a high-profile banker.' 'Ms Usha happens to be in the wrong place at the wrong time.' 'Ms Usha's crime? That's as thin as it gets.'
'Four weeks have passed after the scam was exposed, yet no big guy has been arrested.' 'This gives the impression that he wants to be soft on the biggies.'
Tamal Bandyopadhyay details HDFC Bank's digital journey.
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