After HSBC, Standard Chartered India under US scanner

The US regulatory order also accused StanChart of deficient money laundering controls in its outsourcing of work to India, which the bank has refuted.

NEW YORK/LONDON/MUMBAI: Outsourcing of key oversight jobs by global banks to India has come under the scanner for the second time in less than a month for exposing the US financial system to terrorists and money laundering risks.

On the heels of a probe by the US Senate's Permanent Committee on Investigations pointing out major lapses in the work of HSBC's India staff, another UK-based banking giant Standard Chartered's outsourcing of key banking jobs to Indian shores have come under the scanner in the US.

A probe by the New York State's key banking regulator, the Department of Financial Services (DFS), has found deficient money laundering controls in outsourcing of work by StanChart to India, thus exposing the US financial system to terror financing and other risks.

The findings in these two separate probes have come at a time when the voices against outsourcing of jobs to India and other locations are gaining momentum in the US, ahead of the Presidential elections in November.

In an order last night, the DFS accused StanChart of hiding secret transactions involving USD 250 billion with Iran -- leaving the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes.

The DFS probe found that SCB had assured the New York state in May 2010 that it would take immediate steps to comply with the US Office of Foreign Assets Control (OFAC) sanctions. However, another regulatory examination in 2011 found continuing and significant Anti Money Laundering failures.

Among these, the bank was outsourcing its "entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices."

The OFAC is the designated US government agency for preparing list of entities with whom US citizens and entities are barred from doing any business.

Standard Chartered slumps 20% in India

The Standard Chartered Bank stock today plunged by up to 24 per cent in the Indian and UK markets, as the New York state in the US threatened to revoke its licence and charged it of USD 250 billion worth secret transactions with Iran.

At the Bombay Stock Exchange, the scrip fell 19.97 per cent to hit its lowest permissible limit for the day at Rs 83.15. On the NSE, the scrip was down 19.97 per cent at Rs 82.95.

At the London Stock Exchange, Standard Chartered shares plunged 23.9 per cent to 1,119 pence in morning trade.

The New York state has threatened to revoke the bank's licence after charging the UK-based global banking giant of operating as a "rogue institution" and hiding over 60,000 transactions worth USD 250 billion with Iran.

While the bank has refuted the charges saying that more than 99.9 per cent of its Iran-related transactions complied with the US regulations, the New York State Department of Financial Services (DFS) has charged StanChart of exposing the US financial systems to terrorists, drug kingpins and weapon dealers through its transactions with Iran for about 10 years.

In a 27-page order, the Superintendent of Financial Services Benjamin Lawsky of DFS said that "grounds exist for revocation of Standard Chartered Bank's licence to operate in the State of New York and that interim measures must be taken to protect the public interest."

The order accused Standard Chartered of operating as a "rogue institution" which was "motivated by greed."

Reacting to the regulator's order, Standard Chartered said it "strongly rejects" the position and portrayal of facts made by DFS.

Read more »

Identify sex workers in metros willing to quit: SC

New Delhi: The Supreme Court on Tuesday ordered the government to identify sex workers willing to give up the trade in Delhi, Mumbai, Kolkata and Chennai and suggest mode and manner of imparting vocational training to enable them earn a dignified livelihood.

A bench of Justices Markandey Katju and Gyan Sudha Misra also set up a panel headed by senior advocate Pradeep Ghosh and asked the Centre and state governments to conduct a survey and report to the panel, which will then suggest and assist the court in passing appropriate orders.

Other members of the panel are senior advocate Jayant Bhushan, Usha Multi-purpose Cooperative Society through its president and Delhi-based NGO 'Rohini' through Salma Hasan.

The panel was set up to assist the court after the bench learnt that neither the Centre nor the states had filed an affidavit in response to its February 14 order asking them to suggest schemes to impart vocational training to sex workers, who number between 7-12 lakh.

The Union health ministry says there are 6,88,751 "registered" sex workers, while National Aids Control Authority ( NACO) estimates their population at 12.63 lakh. Andhra Pradesh has more than one lakh registered sex workers while Karnataka has 79,000. They are followed by Tamil Nadu, Maharashtra and West Bengal. Among the metros, Delhi leads the list with 37,900 sex workers.

The bench asked the governments to file their affidavits in two weeks, posted further hearing on August 2 and said it would give directions to the Centre and states from time to time based on the panel's recommendations.

"Since this is a continuing mandamus, to begin with, we will focus on the metropolitan cities of India, namely, Delhi, Kolkata, Chennai and Mumbai as this problem of sex workers is more acute and on a much larger scales in these metropolitan cites. However, this does not mean that we will not take up other cities into consideration," it said.

The court said it was taking up the exercise to give a chance to sex workers to live a life with dignity, a right guaranteed under Article 21 of the Constitution.

"It is only if a sex worker is able to earn a livelihood through technical skills rather than by selling her body that she can live with dignity, and that is why we have requested all the states and the Union of India to submit schemes for giving technical training to these sex workers," it said.

The SC order for survey of sex workers followed senior advocate Anand Grover's suggestion for ascertaining how many sex workers wanted rehabilitation and the type of vocational training.

The court on February 14 had said, "A woman is compelled to indulge in prostitution not for pleasure but because of abject poverty. If such a woman is granted opportunity to avail some technical or vocational training, she would be able to earn her livelihood by such vocational training and skill instead of selling her body."

It had directed the governments to prepare schemes for giving technical or vocational training to sex workers and sexually abused women and ensure that goods produced by vocationally trained sex workers had a market.

The order came on a petition filed by one Budhadev Karmakar who was convicted and sentenced for killing a sex worker in Kolkata on September 17, 1999.

Read more »

Shiv Sena chief Bal Thackeray under fire over 'U-turn' on varsity renaming

Mumbai May 20 -  Two days after he lambasted political opponents for insinuating that he opposed renaming of Marathwada University after Dr Babasaheb Ambedkar, Shiv Sena chief Bal Thackeray is now in middle of a contorversy, with a section of media terming it as his 'U-turn'.

"From 1994 to 2011, Thackeray has done a 180-degree turn on the renaming issue," leading Marathi newspaper Loksatta claimed in its lead story on Friday.

Marathi channel Star Majhaa aired a special programme last night, highlighting the change of stance, apparently with an eye on Dalit votes, in backdrop of his cosying up with new-found ally, Dalit leader Ramdas Athawale.

"At a public meeting in Parbhani on February 21, 1994, Thackeray said he will continue to oppose the varsity renaming till he is alive," the newspaper said.

"Thackeray also said that Dalits were paying obeisance at the university gate, thinking it was the Chaityabhoomi," it said. Chaityabhoomi, in Dadar area, is where Ambedkar was cremated and lakhs of his followers visit the memorial on his anniversary each year.

Rubbishing critics who questioned the contradiction of his alliance with Athawale, whose party RPI has a large Dalit following in the state, and also his old stance against the renaming, Thackeray had said on May 16: "Let me make it clear once again. I never opposed renaming of the university. I had suggested that the name Marathwada University be retained and Ambedkar's name be added to it."

Read more »

Foreign secretaries of India, Pak to meet tomorrow in Thimphu

THIMPHU: Making a fresh attempt to restart the bilateral dialogue process, foreign secretary Nirupama Rao and her Pakistani counterpart Salman Bashir will meet here tomorrow during which the Indian side is expected to seek an update on the Mumbai attacks investigations and trial.

Rao and Bashir, who are here for the SAARC meeting of foreign secretaries and council of ministers, are expected to take stock of the bilateral ties and discuss whether some confidence-building initiatives could be taken.

This will be the first meeting between the Foreign Secretaries after the failed talks between the foreign ministers in July last year in Pakistan.

India, while keeping low the expectations from the meeting, has made it clear that it was ready to have discussions on all outstanding issues with Pakistan but through a step-by-step approach.

The resumption of full-fledged dialogue, which was stalled after the 2008 Mumbai attacks, would, however, depend on the progress by Pakistan to punish all those behind the 26/11 strikes, sources said.

At tomorrow's meeting, Rao is expected to seek an update from Bashir on the investigations and trial in the Mumbai attacks case in Pakistan.

She is also expected to seek a response from Bashir on India's request for voice samples of the persons in Pakistan who were heard coordinating the 26/11 attacks.

Setting the tone for the meeting, Rao said Friday in Delhi, "We hope that both the governments come to satisfactory conclusion about what is required so that the trial could be satisfactorily concluded because justice has to be done."

She made the comments after meeting home minister P Chidambaram during which they are understood to have discussed issues related to the Mumbai attacks.

Noting that 26/11 trial in Pakistan was "one of the issues under discussion between the two governments, particularly between the interior ministry of Pakistan and our home ministry," she said New Delhi and Islamabad have been in correspondence about the exchange of evidence that is required for the trial to go forward.

On her meeting with Bashir, she said India will see how it can pick up the thread once again.

"We are going to meet after a certain interregnum, a few months after last meeting. So, we will see how we can pick up the thread once again. I am sure we will exchange ideas. Let's hope that we would be able to pick up convergence of views. Every such meeting is an attempt to build greater comprehension of each other's position and deeper understanding," the foreign secretary said.

PTI

Read more »