One of the leading newspapers has claimed that the Union finance ministry has unearthed a FD scam of Rs. 4.4 bn involving Dena Bank and OBC. In case of Dena Bank, the branch manager mobilized fixed deposits (FD) to the tune of Rs. 2.6 bn from seven corporates using middlemen. Then fake FD receipts were sent to the organization against which the middlemen proposed to sanction the loans. The original FD receipt was retained by the bank. Loans are then disbursed in the third party accounts of these organisations. In case of OBC, Misappropriation of funds to the tune of Rs 1.8 bn was reported.
This amount was deposited by an organisation as fixed deposit (FD). As the organisation didn’t have an account in the branch, the branch manager transferred the funds to the sundry account. FDs mostly get deposited here for the period till the account is opened. This money was again deposited in the current account, which is wrong and must have been done to beef up the low interest deposit of the bank and fudge figures to meet the current account target. From here, the money was routed to third-party accounts. We expect some clarification related to this scams may be released soon. Although both these scams are on a lower scale, we believe one should avoid both these stocks for trading or investment and stick to large cap names like SBI and BOB.
Indirect taxes kitty swells 3.9% during April-July
Indirect tax collections rose 4.9% in July and 3.9% in April-July, indicating that targets for the full fiscal may be difficult. The government budgeted Rs 6.23tn from indirect taxes of customs, central excise and service tax in FY15, a near 25% rise from last year. Indirect tax collections in the first four months add up to 24.8% of the total budgeted for the year. Steep revenue target is seen by experts as the biggest risk to achieving fiscal deficit target of 4.1% of GDP this year. In July alone, indirect taxes were up 4.9%, a moderation from 13.5% in June.
IFC’s $2-billion bond sale a a vote of confidence for Indian economy
The International Finance Corporation (IFC), private finance arm of the World Bank, is set to raise as much as $2 billion in a bumper bond sale, a vote of confidence in the Indian economy that’s set for a turnaround under the growth-oriented policies of the Modi government. This will also be the first onshore offer of such magnitude by a blue chip entity and will help deepen and internationalize India’s corporate bond market, something that successive governments and the Reserve Bank of India have aspired to over the years but haven’t quite been able to achieve.
U.S. Consumer Prices Inch Up Just 0.1% In July
Consumer prices saw only a modest increase in the month of July, with higher prices for shelter and food offset by decreases in prices for energy and airline fares. The Labor Department said its consumer price index ticked up by 0.1% in July after rising by 0.3% in June. The modest increase by the index matched economist estimates. The uptick in consumer prices was partly due to higher food prices, which climbed by 0.4% in July after inching up by 0.1% in June.
U.K. Inflation Falls More Than Expected In July
U.K. inflation slowed more-than-expected in July as summer price discounting among retailers dragged clothing costs, while factory-gate prices declined for the first time since 2009 suggesting absence of inflationary pressure. Inflation eased to 1.6% in July from 1.9 % in June. The figure was forecast to slow to 1.8%. It has been below the 2% target since last January.
Japan July Trade Deficit Y963.99 Billion
Japan posted a merchandise trade deficit of 963.99 billion yen in July, the Ministry of Finance said, remaining in the red for a record 25th consecutive month. The headline figure missed forecasts for a deficit of 713.9 billion yen following the 823.2 billion yen shortfall in June.