NISHKA Sept 2014 Volume V Issue 51

NISHKA

A FINANCIAL NEWSLETTER
September 2014, Volume V, Issue 51

ANTI-MONEY LAUNDERING

Christ University Institute of Management, Kengeri Campus

NISHKA Sept 2014 Volume V Issue 51

In this newsletter

NISHKA Sept 2014 Volume V Issue 51

Introduction to Anti-Money Laundering The different stages of money laundering are as folSudeshna Bhattacharya, F1 & Purnima Singh, F2
Hawala or Money Laundering has become
synonymous terms for Black Money transactions in
our country. There are scores of cases where it has
been found that banks had a nexus and was actively
involved in money laundering. Money Laundering is
not just used as a vehicle to stash black money but it
also has repercussions like, finding its way to financing terrorism. The government has been pro-active
in this regard to stop money laundering; it has come
up with Anti-Money Laundering Act, 2005 which
collaborates with Financial Action Task Force
(FATF), the inter-country organisation that combats
money laundering. It is an initiative of the G-7 countries.

lows:
Placement: The first stage is about the physical disposal of cash. It introduces illegal profits of the launderer into the financial system. This placement is
accomplished by depositing the cash in domestic
banks or in other types of formal and informal institutions.

Layering: The Second stage in money laundering is

layering. It engages a series of conversions or movements of the funds to distance them from their
source or origin. The funds might be channelized
through the purchase and sale of investment instruments such as bonds, stocks, and travellers checks
or the launderer might deposit the funds through a
series of accounts at various banks across the globe,
The standards have been the international particularly to those jurisdictions that do not cooperbenchmark for Anti-Money Laundering Act, 2005 ate in anti-money laundering investigations.
and it helps to combat the financing of terrorism by Integration: In this stage the funds are returned to
the regulatory authorities. It is necessary for the the legitimate economy for later extraction. Exambanks, financial institutions and NBFCs to comply ples include investing in a company, purchasing real
with these standards for international financial rela- estate, luxury goods, etc.
tionship. The Hawala Mechanism facilitates transferring out of the country and hiding unaccounted
wealth. Black money refers to funds earned, on
The launderer makes the ill-gotten wealth
which taxes have not been paid and hence unac- appear as it appear to have been legally earned and
counted. Black money is earned through legally or accomplishes integration of the cleaned money
illegally traded goods or services while White mon- into the economy.
ey is the money earned through legal means and on
which taxes have been paid.
https://www.moneylaundering.ca/public/
law/3_stages_ML.php

NISHKA Sept 2014 Volume V Issue 51

Case Analysis: M/S Chinubhai Patel & Co.

Aswathy Edison, F1

The further investigations conducted by Foreign Exchange Enforcement Directorate(ED) revealed that these illegal transactions occurred in
number of banks, one of them being United Commercial Bank, Bombay. During the period 1991-95,
remittances amounting to Rupees 5,467.8 million
had been made through 12 different banks.

In 1995, M/s Chinubhai Patel & Co. was synonymous with the money laundering operation conducted by Directorate of Revenue Intelligence
(DRI), which revealed a number of fictitious accounts opened in banks by individuals. Further inIn 1990s, there was a money laundering
vestigations conducted opened up the major role
league operating with the help of middlemen who
played by Indian banks in such illegal transactions.
appointed front persons to open fictitious bank acAt a Glance:
counts for the purpose of depositing cash and receivM/s Chinubhai Patel & Co. was the name of ing pay orders from other banks. This was also utithe fictitious bank account opened in South Indian lized to reward bank officials who were aware of the
Banks Nariman Point Branch, Mumbai. The bank transactions. Fraudulent Documents such as customaccount was opened in 1994 by the then bank man- er Invoice, Bills of Entry, Packing Lists etc., were
ager Mr. Kasturi Rangan. The bank created the ac- created to show that imports had taken place and
count without obtaining and authenticating the ac- funds were required to be remitted from the accounts
to the fictitious exporting countries such as Hong
countholder or account operators photograph.
Kong. To obtain the remittances from India, fictiWhat happened?
tious accounts were also opened in banks of Hong
This account was utilized for depositing cash Kong. 33 people who were associated with the
of Rupees 387,379,000 and from his account; US $ league were arrested during February 1996 to June
12,048,650 was remitted in favour of M/s R.P. Im- 1998.
ports and Exports, Hong Kong. The remittances
Despite the measures taken by the Governwere made on the basis of fraudulent documents.
ment of India in the form of Prevention of Money
Further investigations conducted by the Directorate
Laundering Act, 2002, money laundering leagues
of Revenue Intelligence (DRI) in India and abroad,
still thrive in the country. Though, India has been
revealed that four more firms have been operating
compliant with the global intergovernmental body
their accounts in a similar manner in the South Indi- Financial Action Task Force (FATF) recommendaan Bank Ltd., and these firms were identified as M/s
tions in combating the problem of money launderRakesh International, M/s R.M. International, M/s
ing, the country still hasnt fully been able to preP.M. International and M/s DeePee International.
vent the problem.
These firms were also found to be fictitious and not
When we think of Switzerland, besides their
existing at the given address. They were operating
the account with the said bank since June 1992. chocolates and watches, Indians could relate to the
Through this account, an amount equivalent to US $ huge piles of black money believed to be stashed in
80 million (Rupees 2,500 million) were remitted the accounts which is yet to be recovered. So, let us
be optimistic about our Swiss counterparts who will
from India to Hong Kong.
co-operate with India and return the black money to
The people associated with the act were Mr.
India.
Rajesh Mehta and Mr. Prakash who used this account to siphon off funds in foreign exchange to
countries such as Dubai, Singapore and Hong Kong References:
with the help of pseudo documents which resulted in
a foreign exchange loss to India estimated at Rupees http://www.taxindiaonline.com/RC2/
print_story.php?newsid=2600
2,500 million.

NISHKA Sept 2014 Volume V Issue 51

Case Analysis: Ketan Parekh Scam (2001)

Challapalli Kalyana Karthik, F2 and Niharika
Shadra, F1

Mutual funds and foreign institutional investors by investing heavily in technology stocks
helped K-10 scrip to rise high. He placed shares of
Satyam at a premium of Rs 1,000 with UTI and the
shares of HFCL for Rs 1,400 with mutual funds and
foreign institutional investors. Parekh would increase the liquidity of stock when there was a strong
demand or he himself would buy aggressively if
one of the portfolio stocks fell.

Money laundering is the conversion of illegitimate money into superficially legitimate assets
or money. Money from crimes such as extortion,
terrorism & the like is dirty money which is
cleaned to supposedly appear to arise from noncriminal activities. The global financial system as a
The Bull Run started in May 1999 and conwhole has been striving hard to curb money launtinued up until November 1999 when Parekh started
dering by putting in place, a number of legal prohis first major round of trading aggressively in
cesses. Instances of banks being fined by RBI or US
HFCL, Global, Satyam, and Zee scrips. Sensex rose
Federal Reserve have sharply risen over the past
few years. A number of KYC norms and adherences
are strictly followed, but loopholes still exist and
money laundering is still as common.

AML (Anti-Money Laundering) is a system

in place to reduce the money laundering activities.
Out of 140 countries, India has been ranked 93rd
and 70th in 2012 and 2013 respectively with a score
of 6.05 in 2012 and 5.95 in 2013, as compared to
Norway, which has a score of 2.36 and ranks No. 1
from 3,378 to 4,491 points. Sensex peaked to 6,100
in the Anti-Money Laundering (AML) Basel Index
before it started falling due to a global meltdown in
2013. This clearly indicates the importance, we
ICE shares. There was a sharp decline in prices due
need to accord to AML norms in India.
to factors such as global economic slowdown, sigAbout the Case:
nificant market capitalization erosion at NASDAQ
All over world investment in ICE and other leading stock exchanges. The sudden
(Information Technology, Communication and En- steep fall in prices of these scrips resulted in a huge
tertainment) shares was the trend. Ketan Parekh col- depletion in the margins of shares that were placed
luded with promoters of the new economy (ICE) as securities with the banks. Consequently the
shares and changed the complexion of the market banks were obliged to ask Parekh and his associates
by buying stock known as K-10 scrip. He succeeded to either pledge more shares as collateral or return
in lifting scrips such as HFCL, Satyam and Global some of the borrowed money, and on the other
hand, they were driven to prop up the prices by
to international P/E levels.
pumping more money into the capital market. This
Parekhs modus operandi was to route or- resulted in a financial crunch for some major bull
ders through his three broking outfits and 40 satel- operators, which led to disputes in the Kolkata
lite brokers. He had contacts with brokers in Kolka- (Calcutta) Stock Exchange (CSE). The crisis snowta and Ahmedabad, who were rewarded with balled as the Kolkata brokers took more long posiBadla payments. His sources of funds were Non- tions than Parekh. Trading at Kolkata was 90 per
Resident Indians (NRIs) and the new private sector cent unofficial. It was a cash Badla market where
banks who accepted shares as collateral. He would Rupees 1,500-2,000 crore was rolled every month at
pledge the shares with banks as collateral when the 21-30percent. As the circumstances developed,
share prices were high.
Badla rates shot up to 80 per cent at the Kolkata
Stock Exchange. So, Parekh defaulted on payments

NISHKA Sept 2014 Volume V Issue 51

to Kolkata brokers which resulted in a payment crisis between March 12 to17, 2001. Seventy CSE brokers
defaulted as the exchange plunged into crisis. The bear cartel on BSE, which was hammering the market
with inside information was caught red handed by SEBI who suspended all the seven members from the
BSE governing board.
Ketan Parekh desperately borrowed huge sums from the Ahmedabad based Madhavpura Mercantile
Cooperative Bank (MMCB). The bank issued pay orders running into Crores of Rupees without receiving
cash payment or collateral from Parekh. Pay orders are instruments whereby the issuing branch of a bank
orders another branch of the same bank to pay the stated amount to the named payee. The issuing branch of
the bank collect cash up front and hence have full collateral. Hence, the discounting bank is sure of collection. As Parekh colluded with Ramesh Parekh
the chairman of MMCB, the latter issued Pay
Orders without having the balance in the banks
accounts. The Bank of India (BOI) discounted
Rupees 137 crores worth of Pay Orders which
bounced. Ketan Parekh paid only Rupees 7
crores and BOI went to a criminal court against
him. The Reserve bank specifically prohibits cooperative banks to invest in the stock market or
to lend to stock brokers. However, the latter are
free to lend to individuals against a pledge of
shares up to Rupees 10 lakh per borrower if the
shares are in a physical form and up to Rupees 20 lakh if they are in dematerialized form. MMCB flouted
the norms of the Reserve Bank to earn higher rates of return.
Ketan Parekh took money from the NRIs and the private banks which lent money against shares
and MMCB helped Ketan Parekh and all the NRIs to clean the dirty money so that they can claim it to be
White.
http://articles.economictimes.indiatimes.com/2009-01-24/news/29403716_1_satyam-fraud-audit-pricewaterhouse,
http://articles.economictimes.indiatimes.com/keyword/ketan-parekh/recent/3

NISHKA Sept 2014 Volume V Issue 51

Operation Red Spider by Cobrapost

Niken Jain, F2
Cobrapost claimed to have unearthed a

vast, nationwide money laundering racket being

run by three leading private sector banks of India,
HDFC Bank, ICICI Bank and Axis Bank.

Facts of the Case:

The investigation found that the banks and
their managements systematically and deliberately
violated several provisions of the Income Tax Act,
FEMA, RBI regulations, KYC norms, the Banking
Regulation and Prevention of Money laundering
Act (PMLA) with utter disregard to the consequences, driven by their desire to boost cheap deposits and reap higher profits.
Cobrapost captured the huge money laundering racket being run by these banks on video
tapes which were secretly filmed. These tapes
showed that money laundering services were
openly offered to even walk-in customers who
wish to launder their illicit money.

How did it come out?

Reporters at Cobrapost walked in to banks
and asked the bank officials if they could help
launder a huge sum of money belonging to politi
cians and, surprisingly found that employees accepted those brazen offers.
How do the banks do it?
You must be wondering how a bank can
indulge in such an activity with so much of stringent norms put in place by the RBI on banking
industry. Following are a few of the ways suggested by the bank officials:

Accept huge amounts of cash and invest it in

insurance products and gold.
Open an account to route the cash into various investment schemes of the bank and do
it even without the mandatory PAN card or
adhering to the KYC norms laid down by
RBI.
Split the money into tranches (transaction

value than Rupees 49,999) to get it into the

banking system without being detected.
Use Benami accounts to facilitate the conversion of black money.
Use accounts of other customers to channelize the black money into the system for a
fee.
Get demand drafts made for the client either
from their own banks or from other banks to
facilitate investment without it showing up
in the clients account. They will keep the
identity of the investor/depositor secret.
Open multiple accounts and close them at
will to facilitate the investment of black
money.
Invest black money in multiple instruments
in the names of different individuals, not
necessarily hailing from the same family.
Allot lockers for the safekeeping of the illegitimate cash, including special large size
lockers to accommodate crores of Rupees of
hard cash.
Bank officials were known to have personally visiting residence of clients to collect unaccounted or ill-gotten money which were to
be later laundered. It was reported that they
even took along with them currency counting machines.
Use Form 60 to deposit the illegitimate cash
into accounts with no PAN and later route
monies so deposited into investments.

Operation Red Spider made it clear that the

RBI, the IT Department, the ED and various other
institutions entrusted under the law to keep a
watch on the banks have been inefficient in unearthing the misconduct, claimed Cobrapost.
RBI did an investigation and found that transgressions found were operational in nature with
employees not adhering to norms and guidelines.
It concluded that current KYC norms and AML
guidelines were robust and does not need any revisions. RBI for now has fined the banks but what
remains to be seen is the banks follow the guidelines and be more careful in future.
7

NISHKA Sept 2014 Volume V Issue 51

RBI Column
Pawanpreet Kaur, F2
RBIs liquidity management triggers volatility: The Reser ve Bank of India has cr eated mor e
volatility in the money market than reducing it, making some believe, that it is tightening of interest
rate by stealth. Interbank rates which are supposed to be closer to the policy rates has gone widely off
the mark in the past three months. Overnight rates should have been between 8.20% and 7.80% instead of 9.16% and 7.4%. Addressing this problem being faced by all the banks in India, RBI governor
said, RBI wanted banks to do better forecasting for funds, cut the funds available under LAF to
0.25% of total deposits, from an unlimited amount. Though RBI is planning to sell bonds which will
reduce liquidity in the system and not releasing funds through Repo agreement to compensate through
reducing export refinancing, this action in spite of lowering down liquidity crunch is confusing the
system.

RBIs initiative to be lenient while licensing small banks: Even after RBIs fir st attempt in giving differentiated licenses for small banks does not hold out many hopes for scores of aspirants. The
rules and policies include:

Operational area of small banks will be restricted to contiguous districts and expansion plans for
initial three years would need prior approval of RBI.
Minimum capital of Rupees 100 crore is required to start small banks and involves more risks
for the new entrant.
Professionals with 10 years of banking/finance experience can set up a small bank.
NBFCs, MFIs, Local area banks can convert themselves into small banks.
Small banks to follow all banking norms, including CRR and SLR maintenance.
Minimum 50% loans should be Rupees 2.5 Million or less.
Promoters initial contribution to be 40% of capital and cannot exit or sell his share before 5
years.

RBIs plan to end lazy banking: RBI gover nor Dr Raghur am Rajan seems to have made a beginning to end lazy banking in India. Reducing SLR by 100 basis points (22%) is an indication:

More lending to productive sectors of the economy.

Reduction in SLR will be compensated by payment banks as they will grow in size.
Meeting the fiscal deficit target of 4.1% of GDP. It will be done when funds with government
will be reduced.
Unproductive banks will be penalised by putting an end to them.

RBIs step to put restriction on wilful defaulter from investing in capital market:
The RBI has forwarded a proposal to SEBI suggesting barring wilful defaulters of bank loans from
raising funds through capital markets. RBI will be sharing details of these defaulters on real time basis. Information about wilful defaulters is shared with SEBI and CIBIL, and is inviting other agencies
to share the information to bring more credibility and efficiency in the market.

http://www.rbi.org.in/scripts/bs_pressreleasedisplay.aspx
8

NISHKA Sept 2014 Volume V Issue 51

Corporate Column
Sai Nanthini R.K, F2
To gain insights on Anti-Money Laundering in India, we interviewed Mr. Arthanari, Retd.
Bank Manager, Canara Bank, Chennai.
1. What is the Prevention of Money Laundering Act?
A: The Pr evention of Money Launder ing Act, 2002 (PMLA) for ms the cor e of the legal fr amework put in place by India to combat money laundering. This came into force in July 2005. This Act
imposes obligation on banking companies, financial institutions and intermediaries to verify identity
of clients, maintain records and furnish information to the designated government agency. It defines
money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of
crime. It makes it obligatory for all intermediaries including banks, HFCs to follow 'Know Your Customer' norms which basically defines the customer identification process. As per the KYC, intermediaries have to collect documents before entering into any transaction with the customers. This process
is basically to know the true identity, the source from where the funds have been brought, nature of
customer's occupation or business, etc.
2. What is the biggest challenge in complying with AML regulations?
A: The challenges ar e faced in thr ee phases: Implementation, Inter pr etation and Repor ting. In
each phase the role of the management differs which actually shows the level of difficulty.
These challenges may be due to legacy data or operational difficulties, and hence, designing and executing an effective implementation program remains the biggest impediment. Perceptions of the middle management do matter in this. To meet these challenges, all areas of AML function require an
equal focus. The budget has to be divided proportionately on activities such as training, technology
and operations.
3. What are the key operational challenges that every organisation faces with respect to AML?
A: Few common oper ational challenges ar e: Changing r egulations
infrastructure and technology, skilled staff, no standardized process for complying.

in

AML

When we closely look at it, AML has not reached the level of stability compared to normal operational process, where procedures are strictly codified and concerned people are fully trained to follow
them.
4. How does PMLA helps in combating financing of illegal activity?
A: India has consistently maintained a r obust AML system. Our str ict for eign -exchange laws
and transaction reporting requirements, together with the banking industrys KYC policy, make it difficult for criminals to use banks or other financial institutions to launder money. Large portions of
illegal proceeds are laundered through the alternative remittance system known as Havala.
Under the Havala system, individuals transfer value from one location to another, often without the
actual movement of currency. This is why, many Indians do not trust banks and we prefer to avoid
lengthy paperwork. But, Havala dealers provide the same remittance service as a bank with little or
sometimes no documentation and at rates less than those charged by banks.
To prevent this, the Bill was amended in 2002. This legislation criminalizes money laundering, established fines and sentences for money laundering offenses, imposes reporting and recordkeeping
9

NISHKA Sept 2014 Volume V Issue 51

Finance Buzz
Vyom Goel, F2
Racketeering: It r efer s to a cr iminal activity that is per for med to benefit an or ganization, such
as a crime syndicate. Examples include Money Laundering, Loan Sharking, Obstruction of Justice and
Bribery.

Black Economy: The segment of a countr y's economic activity that is der ived fr om sour ces that
fall outside the country's rules and regulations regarding commerce. The activities can be either legal
or illegal depending on what goods and/or services are involved.

Perpetrator Walk: A slang ter m that descr ibes the pr actice sometimes employed by law enfor cement authorities, notably in the U.S., of parading an arrested suspect in public, with members of the
media usually in attendance. The alleged suspect is usually a white-collar or high-profile criminal.

Suspicious Activity Report (SAR): Suspicious Activity Repor ts can cover almost any activity that
is out of the ordinary, if that activity gives rise to a suspicion that the account holder is attempting to
hide something or avoid reporting under the Bank Secrecy Act (BSA). The Indian version of SAR is
Suspicious

Financial Crimes Enforcement Network (FinCEN): A networ k administer ed by the United

States Department of Treasury whose goal is to prevent and punish criminals and criminal networks
that participate in money laundering.

Wire Fraud: A situation wher e a per son concocts a scheme to defr aud or obtain money based on
false representation or promises. This criminal act is done using electronic communications or an interstate communications facility.

10

NISHKA Sept 2014 Volume V Issue 51

Market Round-up
K.Alekhya, F2 & B. Suma Sravya, F1
Public sector banks' NPAs have piled up enormously and soar ed to a stagger ing Rupees 25,809
crore for the financial year ended March 31 pushing the total gross NPA ratio to 4.03 per cent in 2013
-14 from 3.42 per cent in 2012-13 and 2.94 per cent in 2011- 12- 02/08/2014 (BS).
No change in interest rates as RBI looks ahead: Reduced SLR by half-a-percentage point to 22%
to free up funds of about Rupees 40,000 crore in the banking system, given its total deposit base of
about Rupees 80 trillion. - 05/08/2014 (ET).
FIPB clears 14 FDI proposals worth Rupees 1,528 Crores: Of the pr oposals appr oved, phar ma
company Laurus Labs will invest Rupees 600 Crores; ACME - Rupees 275 Crores; Sinclair Hotels Rupees 41.52 Crores and Golden Agri Resources (India) Rupees 485.9 Crores - 06/08/2014 (ET).
SEBI clears norms for Real Estate Investment Trusts: To boost the r eal estate and infr astr ucture sector with inflows of over US $20 Billion investment from both foreign and domestic investors,
SEBI on Sunday, approved the SEBI (Real Estate Investment Trusts) Regulations, 2014, and SEBI
(Infrastructure Investment Trusts) Regulations, 2014- 11/08/2014 (The Hindu).
RBI to transfer Rupees 52,679 Crores surplus profit to government: This amount would pr ovide
some help to the government, which proposes to bring down the fiscal deficit to 4.1 per cent of GDP
this fiscal from 4.5 per cent last year - 11/08/2014 (BS).
Factory output slips to 3.4 percent in June: Showing signs of sluggishness in the economy,
growth rate of industrial production slowed to 3.4 per cent in June, as against 5 per cent in May, mainly due to lower output of consumer goods - 12/08/2014 (ET).
No foreign equity in multi-brand retail. Nar endr a Modi' s gover nment will not per mit for eign
equity in multi-brand retail trade, which was an assurance in the party's election manifesto and as per
the extant FDI policy, FDI up to 100 percent is permitted in single brand retail trading. The present
draft of the policy does not permit retail trading in any form, by means of e-commerce, for companies
with FDI engaged in the activity of single/multi brand retail trading - 13/08/2014(BS).
Trade deficit rises to $12.22 Billion as July exports growth slows down: Expor ts gr owth slipped
to 7.33 per cent in July after witnessing a growth of 10.22 per cent and 12.4 per cent respectively in
June and May. Gems and jewellery and electronics continue to be a cause of concern as their negative
growth is pulling down overall exports growth - 14/08/2014(ET).
US Immigration Bill is all for significantly cutting down on outsour cing of wor k for cer tain
kinds of visas that were mostly used by Indian firms and professionals. If the Bill becomes a law, then
India's GDP could be adversely impacted by about US $30 billion a year. Direct impact will be, 10
million Indian IT Professionals domestically and 500,000 in the US will no longer have any work 15/08/2014(BS).

FIIs pull out Rupees 5,300 Crores from bonds so far in August fr om the Indian debt mar ket.
Foreign investors were gross buyers of debt securities worth Rupees 9,175 crore till August 14, and
sellers to the tune of Rupees 14,448 Crores - a net outflow of Rupees 5,273 Crores. There are several
reasons such as geo-political unrest in Ukraine, Iraq and Gaza along with global economic issues like
the defaults in Argentina and Portugal, and the recent SLR (Statutory Liquidity Ratio) cut by the Reserve Bank of India (RBI) -18/08/2014 (ET).

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NISHKA Sept 2014 Volume V Issue 51

Stock Market Analysis

Sooraj Kumar, F1
Sensex crossed 27000 points in August-September from 25894.97 points in July, 2014. Stock
markets averaged 6329.06 Index points from the time of inception till 2014, reaching an all-time high
of 27000 points. Since July 2014 the monthly growth has been 2.87%. Cautious sentiment may prevail as the Supreme Court will decide the fate of coal blocks.
Improved performance of mining, manufacturing and services sector pushed India's economic
growth rate to two-and-half year high of 5.7 per cent in the April-June quarter, a development which
the Finance Ministry expects to continue for rest of the fiscal. But, focus will largely shift on the Supreme Courts verdict. Historically, September has been a weak month for equity markets. But, Dalal
Street participants seem to be thinking otherwise this year. As the September contracts take the center
stage on expiry of the August contracts on Thursday, traders are sitting on bullish bets on Nifty futures. Stock futures of technology, pharma, oil & gas and automobile sectors have also seen a rollover
of long positions to the September series from August.
The top gainers for the month of august are Bharat Petroleum (20.33%), M&M (20.07%), Tata Motors (19.32%), Godrej Consumer Products (17.49%), Cipla (16.23%) followed by Nestle India, Dabur
India, HPCL, etc. The top Losers for the month are Jai Prakash associates (21.66%), Reliance Power
(17.66%), Adani Power (14.84%), IDBI Bank Ltd (14.78%) followed by Unitech, Jindal Steel and
Power, Reliance Communication and others.
Stock of the Month - Bharat Petroleum

Face Value: Rupees 10

Traded Volume (Shares): 33, 87,252
Traded Value (Lacs of Rupees): 23,496
Market Cap (Lacs of Rupees): 17,942

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NISHKA Sept 2014 Volume V Issue 51

Economic Rollers
Simmy Kumari, F2

Rates

Rates as on 1st August,

2013

Rates as on 15th August,

2014

Repo Rate

7.25%

8%

Reverse Repo Rate

6.25%

7%

CRR

4%

4%

SLR

23%

22%

MSF

10.25%

9%

9.70/10.25%

10.00/10.25%

9.30%

7.97%

10.92%

8.65%

364-Day Treasury Bill (Primary) Yield

9.88%

8.74%

10 years Govt. Securities Yield

7.97%

8.65%

10.25%

9%

CBLO(weighted average)

8.50%

9.19%

Savings Deposit Rate

4.00%

4.00%

10.01%

8.77%

Base Rate
Call Money Rate (Weighted average)
91 days T-Bill (Primary) Yield

Bank Rate

Forward Premia of US$ 1-month

Source: Finance Ministry, Office of Economic Advisory, HDFC Securities Report, Ministry Of Commerce,
RBI, http://www.tradingeconomics.com/india/

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NISHKA Sept 2014 Volume V Issue 51

Finance Quiz
Srinivas Rahul Chaganti, F2

1.

The provisions of PMLA (Prevention of Money laundering Act, 2002)

have come into effect from __________.

2.

Which Bank announces EMI facility on debit cards, which ties up with
Samsung?

3.

India signs MoU with_____________ to develop infra for semi highspeed trains.

4.

Who is the new CEO of Mahindra Retail who replaced K. Venkataraman?

5.

_____ Power bought Lanco Infratechs Udipi power plant for 6000 crores.

6.

Who is the Indian origin mathematician who has been awarded prestigious 2014 Field Medal at International Mathematician Union (IMU)?

7.

Tata-Singapore joint venture is branded as __________.

8.

SEBI imposes 13 crore penalty on ____ for non-disclosure of diluted

earnings.

9.

Which bank has been emerged as most valued bank in India with a brand
value of US $ 9.4 Billion?

10. _________Steel Ltd. Indias steel maker has agreed to buy Welspun Max
Steel for Rupees 1000 crore.

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NISHKA Sept 2014 Volume V Issue 51

Photo-Find
Nilanjana Chatterjee, F2

1)

2)

3)

4)

5)

6)

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NISHKA Sept 2014 Volume V Issue 51

Crossword
Samyuktha P Reddy, F2
1.

3.

2.
7.
8.

5.
9.

10.
4.

6.

Vertical:
1.
------------ confirmed Wednesday that it faces fresh US fines over alleged breaches in its anti-money laundering
systems, two years after it paid massive penalties for violating American sanctions.
2.
A special anti-money laundering court here has attached assets worth over Rs 37.86 crore belonging to former
Karnataka minister and mining baron --------- and his wife in connection with an alleged multi-crore iron ore
mining scam.
3.
US regulators are investigating Charles Schwab Corp and Bank of America Corp's -------brokerage over
whether they are doing enough to learn about their clients' identities, sources said, the latest sign a crackdown
on money laundering is expanding.
4.
To safeguard Indian markets from money laundering risks, brokers and other intermediaries would need to
have designated director for ---------------- compliance by the end of this month.
5.

----- which has a score of 2.36 and ranks No. 1 in the Anti Money Laundering (AML) Basel Index 2013.

Horizontal:
6.
In which year the Parliament of India passed an act called the Prevention of Money Laundering Act.
7.

This type of money laundering is a process that disguises a legitimate source of funds that are to be used for
illegal purposes

8.

In December 2012, ---- : paid a record $1.9 Billion fines for money-laundering hundreds of millions of dollars
for drug traffickers, terrorists and sanctioned governments such as Iran.The money-laundering occurred
throughout the 2000s.
---- was a major international bank founded in 1972 by Agha Hasan Abedi, a Pakistani financier. The bank it
finally came out was being used to fund criminals and dictators, the CIA of USA was using it to fund the Afghan Mujahedeen and Contras. It was laundering proceeds from trafficking heroin grown in PakistanAfghanistan, boosting the flow of narcotics to European and U.S markets.
Formed in 1989 by the G7 countries, the ---- is an intergovernmental body whose purpose is to develop and
promote an international response to combat money laundering.

9.

10.

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NISHKA Sept 2014 Volume V Issue 51

Answers
Answers to Quiz:
1. 2005
2. ICICI
3. Czech Republic Railways
4. Prakash Wankankar
5. Adani
6. Manjul Bhargava
7. Vistara
8. RIL
9. HDFC
10. JSW

Answers to Crossword:
1.

Standard Chartered

2.

Gali Janardhana Reddy

3.

Merrill Lynch

4.

PMLA ( Prevention of Money Laundering

Act)

5.

Norway

6.

2002

7.

Reverse

8.

HSBC

9.

BCCI - The Bank of Credit and Commerce

International

10.

FATF

ANSWERS TO PHOTO FIND:

1.
2.
3.
4.

5.
6.

Logo of Standard Chartered which has been in news recently for having
faced a hefty money laundering fine.
Jeffrey Preston "Jeff" Bezos, technology entrepreneur who has played a key
role in the growth of e-commerce as the founder and CEO of Amazon.com
Lloyd Craig Blankfein, CEO and Chair man of Goldman Sachs.
Manjul Bhargava, the fir st per son of Indian or igin to win the Fields Medal,
which is awarded every four years to mathematicians who are 40 years old or
younger and is often described as a Nobel Prize for mathematics.
Logo of HSBC (Hongkong and Shanghai Banking Cor por ation), wor ld's second largest bank.
Arundhati Bhattacharya, the fir st woman to be the Chairperson of State
Bank of India. In 2014, she was listed as the 36th most power ful woman in
the world by Forbes.

17

NISHKA Sept 2014 Volume V Issue 51

NISHKA TEAM
Nishka is a monthly finance newsletter brought by the students of the finance club of Christ
University Institute of Management, Kengeri Campus. The idea behind coining this issue of the
magazine is to establish a learning among the students, which helps them to gain an insight
about the world of finance.

Faculty Coordinator
Prof Shrikanth Rao

Coordinators
Niharika Shadra, F1
Niken Jain, F2

Editors

RBI Column

Crossword

Gerorge P Job, F2
Neha Mishra, F2

Pawanpreet Kaur, F2

Samyuktha P Reddy, F2

Introduction

Finance Buzz

Quiz

Upasana Gurung, F1
Srijita Mukherjee, F2

Vyom Goel, F2

Rahul Srinivas, F2

Article Coordinators

Market Round Up

Photo Find

Aswathy Edison, F1
Sudeshna Bhattacharya, F2

B.S Sravya, F1
Katepalli Alekhya, F2

Nilanjana Chatterjee, F2

Article Writing by

Economic Rollers

Corporate Interview

Kalyan Karthik, F2
Purnima Singh, F2

Simmy Kumari, F2

Sai Nanthini R K, F2

Stock Analysis

Designing

Sooraj Kumar, F1

Sharan Kumar G, F2

CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT, KENGERI CAMPUS

Please mail your valuable feedback/reviews to nishka@mba.christuniversity.in
(for private circulation only)
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