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RBI is usual WHITE ELEPHANT Government department, their stories of inefficiencies are well known.FAILURE OF RBI IN DEVELOPING A HEALTHY MONEY MARKET IN INDIA, STIFLING CONTROLS AND LACK OF IMAGINATION IN POLICY MAKEOVER:1. ABSENCE OF CO-ORDINATION IN THE MONEY-MARKET:There is no proper co-ordination among the different sectors of Indian Money-market.The Indigenous Bankers even to-day lie out-side the purview of the control of the Reserve Bank.This is one of the important causes of the failure of the Reserve Bank of India.2. ABSENCE OF PROPER BANKING FACILITIES:The present banking facilities are not adequate, if we study it with the area of the country and its population, we can safely come to the conclusion that there are number of places where no banking facilities are available. Therefore, it can be said that Reserve Bank has not succeeded in removing this short-coming in the Indian banking system.3. THERE IS NO UNIFORMITY IN INTEREST RATES:Due to lack of co-ordination in the Indian money-market, a great diversity of interest rates is found in different parts of the country. This diversity can be considered as a major cause of failure of the Reserve Bank.4. ABSENCE OF WELL-DEVELOPED BILL MARKET:The development of the bill market is not adequate for the country. Reserve Bank has not been able to develop this market suitably and effectively.5. NO PROPER AND ADEQUATE DEVELOPMENT OF AGRICULTURE CREDIT:There is no doubt that the Reserve Bank has taken several steps for the agricultural credit, yet it has not been possible to bring about an adequate development of this credit in the country. Even to-day sufficient credit at reasonable rates is not available to the farmers for agricultural purposes.6. RESERVE BANK IS SIMPLY A TOOTHLESS WATCH DOG:In-spite of the wide powers of Reserve Bank, but the truth is that the bank has turned out to be a toothless watch dog in performing its role as the coordinator, controller and regulator of India’s banking system.7. FAILURE TO FUNCTION AS THE LENDER OF THE LAST RESORT:As a lender of the last resort it is expected that the Reserve Bank will extend its protection to the member banks against banking crisis. But unfortunately this hope has not been fulfilled. Several banks failed in the country but the Reserve Bank could not save them from failure8. RESERVE BANK HAS FAILED TO SECURE EQUITABLE SHARE FOR THE INDIAN BANKS IN FOREIGN EXCHANGE BUSINESS:In India the foreign exchange banks continue to enjoy almost complete monopoly of the foreign exchange business. The Reserve Bank has failed to secure to the Indian banks a proper and equitable share in the foreign exchange business of the country.9. INSTABILITY SITUATION IN THE INTERNAL VALUE OF THE RUPEE:The Reserve Bank is not able to maintain the stability in the internal value of rupee which is considered as a great failure of the Reserve Bank. The inflation has produced adverse repercussions on the economic situation of the country. Though, the Reserve Bank has adopted several anti-inflationary measures, it has not been able to make any significant impact on the monetary situation in the country._____________________We have some excerpts from RBI PublicationIII. EVOLUTION OF BANKING IN INDIAhttps://www.rbi.org.in/scripts/PublicationsView.aspx?id=10487Bank Failures and Liquidation/Consolidation of Smaller Banks3.43 The partition of the country hurt the domestic economy, and the banking sector was no different. Of the 84 banks operating in the country in the organised sector before partition, two banks were left in Pakistan. Many of the remaining banks in two States of Punjab and West Bengal were deeply affected. In 1947, 38 banks failed, of which, 17 were in West Bengal alone, having total paid-up capital of Rs.18 lakh. The paid-up capital of banks that failed during 1947 amounted to a little more than 2 per cent of the paid-up capital of the reporting banks.15 The average capital of the failed banks between 1947 and 1955 was significantly lower than the average size of paid-up capital of reporting banks in the industry, suggesting that normally it was small banks that failed (Table 3.12).3.44 The year 1948 was one of the worst years for the relatively larger banks as 45 institutions (out of more than 637 banks) with paid-up capital averaging about Rs.4 lakh were closed down. They failed as they had over-reached themselves by opening more branches than they could sustain on the strength of their resources and by making large loans against property or inadequate security. Some of these, however, had prudential issues as they were functioning with very low capital base. Repeated bank failures caused great hardships to the savers. Failures also reduced faith in the banking system. Most of the savings during this period were in the for m of land and gold. Household savings constituted 66 per cent of the total domestic savings. Of the total household savings, 89 per cent were in physical assets.16 Financial savings flowed in greater measure to the postal department that was considered a safer avenue due to government ownership. Bank deposits mobilised by commercial banks were largely lent out to security based borrowers in trade and industry.3.45 The first task before the Reserve Bank after independence, thus, was to develop a sound structure along contemporary lines. It was recognised that banks and banking soundness were crucial in promoting economic prosperity and stability. Banks, through their spread and mobilisation of deposits, promote the banking habits and savings in the economy. This could help in garnering resources for investment and development. The initiation of planned economic development required the banking industry to spread far and wide to augment deposit mobilisation and provide banking services.3.46 The issue of bank failure in some measure was addressed by the Banking Companies Act, 1949 (later renamed as the Banking Regulation Act), but to a limited extent. The Banking Companies Act of 1949 conferred on the Reserve Bank the extensive powers for banking supervision as the central banking authority of the country.17 It focused on basic prudential features for protecting the interests of depositors and covered various aspects such as organisation, management, audit and liquidation of the banking companies. It granted the Reserve Bank control over opening of new banks and branch offices, powers to inspect books of accounts of the banking companies and preventing voluntary winding up of licensed banking companies. The Act was the first regulatory step by the Government of independent India, enacted with a view to streamlining the functioning and activities of commercial banks in India. The Act was long overdue as the Indian Central Banking Enquiry Committee had, in 1931, recommended the enactment of such an Act for India. The most effective of the supervisory powers conferred on the Reserve Bank was the power to inspect banking companies at any time. The Reserve Bank was empowered to inspect any banking company with the objective of satisfying itself regarding the eligibility for a licence, opening of branches, amalgamation, compliance with the directives issued by the Reserve Bank. A key feature contained in this Act was to describe BANKING as distinct from other commercial operations. This was in line with the traditional role of commercial banks, where banks were considered as a special entity in the financial system, requiring greater attention and separate treatment (Selgin, 1996).3.47 The Banking Companies Act, however, had some limitations. It did not have adequate provisions against abuse of the powers by persons, who controlled the commercial banks’ managements. The Reserve Bank in July 1949 decided to organise efficient machinery for the systematic and periodical inspection of all banking companies in the country, irrespective of their size and standing. The ultimate aim was to create an organisation for the annual inspection of every bank. It was made clear that the primary objective of the inspections was to assist the banks in the establishment of sound banking traditions by drawing their attention to defects or unsatisfactory features in their working methods before they assumed serious proportions necessitating drastic action. The task of evolving an efficient machinery and organisation for conducting the inspections of all the banks was a formidable one.3.48 Bank failures continued in the period after independence and after the enactment of the Banking Companies Act, although such failures reduced considerably. In order to protect public savings, it was felt that it would be better to wind up insolvent banks or amalgamate them with stronger banks. Accordingly, in the 1950s, efforts were tuned towards putting in place an enabling legislation for consolidation, compulsory amalgamation and liquidation of banks. This was required as the then existing procedure for liquidation was long and time consuming. It involved proceedings in the High Court and caused significant cost and hardship to the depositors. Similarly, the suspension of business was also a long drawn process for licensed banking companies as it involved declaration of moratorium, appointment of official liquidator by the High Court and inspection of the books and accounts of the respective banking companies by the Reserve Bank. Voluntary winding up was an easy exit route for banking companies that were not granted a licence under Section 22, as the provisions of Section 44 did not apply to such banking companies and the prior permission of the Reserve Bank was not required before voluntary liquidation of such companies. This made it easy for the fly-by-night operators to voluntarily wind-up their operations. Many non-scheduled banks, especially in West Bengal became untraceable. Of the 165 non-scheduled banks reported to exist in June 1954, the whereabouts of 107 banks were not known.18 The licence of all of these and the remaining non-scheduled banks, barring six, was cancelled.3.49 The Travancore- Cochin region also had a large number of small banks. According to a survey by Travancore-Cochin Inquiry Committee in 1954, out of 163 banks in the region, as many as 136 were small set up in hamlets. Of these, only 16 had deposits above Rs.40 lakh. The working capital of 95 banks was less than Rs.10 lakh. Thirty-nine banks had capital and reserves below the level applicable to them under Section 11 of the Banking Companies Act 1949. The Committee suggested that these banks be given time to enhance their capital. Eighteen banks were refused licences. Elsewhere in India, the banks faced fewer problems. At the all-India level, in December 1957, only 21 banks were refused licences as they were beyond repair.3.50 Even some bigger banks such as the Palai Central Bank were not performing well. Their performance was marred by the poor level of reserves and high percentage of unsecured advances. The Reserve Bank’s Committee of the Central Board in October 1952 considered the possibility of the bank being excluded from the second schedule of the Reserve Bank Act on the basis of the irregularities as pointed out by the inspection report.19 The Reserve Bank had two options, viz., to exercise its powers to close the bank or to nurse it back to normalcy. The first option was easy but was fraught with risks that it might precipitate a systemic crisis. The second option was more difficult. With the interest of depositors in mind, the Palai Bank was given time to improve its working and it was placed under moratorium. However, the bank failed in 1960. There was a public and parliamentary outcry after this failure that speeded up the move towards the requisite legislation to tackle bank failures.3.51 In the wake of this development, amalgamation of banks was seen as a solution. The moratorium and consequent amalgamation of the Kerala banks ushered in a new era of rapid consolidation of the Indian banking system. Accordingly, the Banking Companies (Amendment) Act 1961 was enacted that sought, inter alia, to clarify and supplement the provisions under Section 45 of the Banking Companies Act, which related to compulsory reconstruction or amalgamation of banks. The Act enabled compulsory amalgamation of a banking company with the State Bank of India or its subsidiaries. Until that time, such amalgamation was possible with only another banking company. The legislation also enabled amalgamation of more than two banking companies by a single scheme. Detailed provisions relating to conditions of service of employees of banks, subject to reconstruction or amalgamation, were also laid down.3.52 Between 1954 and 1966, several banks were either amalgamated or they otherwise ceased to function or their liabilities and assets transferred to other banks. During the six year period before the Reserve Bank was formally given the powers in 1960 to amalgamate banks, a total number of 83 banks were amalgamated. However, between the period from 1960 to 1966, as many as 217 banks were amalgamated under different provisions such as under Section 45 of the BR Act 1949 (compulsory amalgamation) and Section 44 A of BR Act 1949 (voluntary amalgamation). Liabilities and assets of those banks which otherwise ceased to function were transferred to other banks. In the year 1960 alone, as many as 30 banks were amalgamated. However, as a conscious policy, the smaller but well-functioning banks were not consolidated. The transferring the assets and liabilities to other banks proved to be a popular exit route. In 1964 alone, as many as 63 banks went out of business (Table 3.13). The process of bank consolidation was accompanied by a vigorous bank licensing policy, wherein the Reserve Bank tried to amalgamate the unviable units. A number of banks that did not comply with the requisite norms were also delicensed.3.53 The process of strengthening of the banking sector also took the form of weeding out the unviablebanks by liquidation or the taking of the assets of the non-functioning banks by other banks. During the period 1954 to 1959 as many as 106 banks were liquidated. Of these, 73 banks went into voluntary liquidation and 33 went into compulsory liquidation. Between 1960 to 1966, another 48 banks went into liquidation (Table 3.14).3.54 The policy of strengthening of the banking sector through a policy of compulsory amalgamation and mergers helped in consolidating the banking sector. The success of this could be gauged from the visible reduction in the number of non-scheduled banks from 474 in 1951 to 210 in 1961 and further to 20 in 1967. Their branch offices declined from 1504 in 1951 to 622 in 1961 and to 203 in 1967 (Table 3.15).3.55 The bank failures and the hardship caused to the depositors led the Reserve Bank to provide safety nets to depositors. The Banking Companies (Second Amendment) Act, 1960, which came into force in September 19, 1960 sought to facilitate expeditious payments to the depositors of banks in liquidation and also vested the Government and the Reserve Bank with additional powers to rehabilitate banks in difficulties. Prior to the Amendment, the procedure for determination of claims of secured creditors and other persons entitled to preferential treatment was mainly responsible for a good deal of delay in the payment to depositors of banks in liquidation. The new provision required that such preferential payment should be made or provided for within three months from the date of the winding-up order or within three months from the date of commencement of the Amendment Act in respect of banks which had gone into liquidation earlier. It further provided that after the preferential payments, the three-month period as specified in the Act, every saving bank depositor should be paid the balance at his credit, subject to a maximum of Rs.250.3.56 In order to ensure the safety of deposits of small depositors in banks in India, the Deposit Insurance Corporation Act, 1961 was enacted. Accordingly, Deposit Insurance Corporation of India was established in January 1962. India was then one of the few countries to introduce such a deposit insurance; the US was the first country to introduce the deposit insurance. This scheme was expected to increase depositor’ confidence in the banking system and was expected to facilitate the mobilisation of deposits and help promote the spread and growth of the banking sector. The Corporation provided insurance cover against loss of all or part of deposits with an insured bank up to a certain level.3.57 As a regulator of the banking system, the Reserve Bank was empowered by the Banking Companies Act to inspect banks. The instances of failures of banks in Kerala that occurred due to misappropriation of depositors’ funds by directors underscored the need to strengthen the mechanism of inspection. Accordingly, changes in the policy regarding inspection were made to undertake surprise inspection of banks, and cover many more branches than in the past to detect frauds. The legislative changes that followed took shape in the insertion of a new Chapter IIIA in the RBI Act in 1962. The entire purpose of regulation of banking was to plug the loopholes in law that permitted any irregularity. An amendment Act passed in 1963, which became effective February 1, 1964, gave further powers to the Reserve Bank, particularly to restrain the control exercised by particular groups of persons over the affairs of banks and to restrict loans and advances as well as guarantees given by banks. It also enlarged the Reserve Banks’ powers of control in the appointment and removal of banks’ executive personnel._____________________Recently an article appeared in the LiveMint:Does India really need to identify too-big-to-fail banks?http://www.livemint.com/Money/gB7N7LAJaehxUhGlHSp6cK/Does-India-really-need-to-identify-toobigtofail-banks.htmlThe FRDI Bill proposes to create a framework for overseeing financial institutions such as banks, insurance companies, non-banking financial services (NBFC) companies and stock exchanges in case of insolvency. The “Resolution Corporation”, proposed in the draft bill, would look after the process and prevent the banks from going bankrupt. It would do this by “writing down of the liabilities, a phrase some have interpreted as a bail-in.It was felt that just like the resolution plan for borrower manufacturers i.e. in the form of Bankruptcy Code, there should be a law backing resolution mechanism for a failing lender banking companies (Banks) also.Another angle to it may be that in a Crisis situation, without bail-in entire economy would crash due to uncontrollable chain reaction, it is a prophylactic emergency step.Most regulators had thought that there were only two options for troubled institutions in 2008: taxpayer (Government) bailouts or a systemic collapse of the banking system.Bail-ins soon emerged as an attractive third option to recapitalize troubled institutions from within, by having creditors agree to rollover their short-term claims or engage in a restructuring. The result is a stronger financial institution that isn't indebted to governments or external influencers — only its own creditors.When those who are the most culpable in financial failures of Banks i.e. the regulators, government officials (finance ministry personnel) and Bank personnel are totally left unaccountable. Creditors, who have nothing to do with either bank mismanagement or regulatory failure, are asked to suffer. Banks fail due to mismanagement, negligence/ refusal to comply with regulatory framework, tendency towards window-dressing of annual reports and compliance needs, probable graft, nepotism, misdirected patronage of illegal activities, political clout, friendly pressure, corrupt purpose of Bank employees and Regulator or due to sabotage by infiltration of competitors in your organization.Banking Regulation Act, 1949 provides a framework using which commercial banking in India is supervised and regulated. The Act supplements the Companies Act. The Act gives the Reserve Bank of India (RBI) the power to license banks, have regulation over shareholding and voting rights of shareholders; supervise the appointment of the boards and management; regulate the operations of banks; lay down instructions for audits; control moratorium, mergers and liquidation; issue directives in the interests of public good and on banking policy, and impose penalties. It should include the creditors also, in running/ managing Banks.Now, will government/ regulator give the creditors option of representation in management of these business in a quid pro quo for Bail-ins as first principle? Will the Government agree for Creditors’ representatives in the Board of a normally functioning healthy Bank so that the creditors can have a say in running the Bank prudently?There should be Trusts formed representing every category of Creditors, e.g. Savings Bank Deposit holder’s Trust, Fixed Deposit holder’s Trust etc etc and then these Trusts should get representation in the Board.Then, what is the gist of changes for Creditors in The FRDI Bill, At present if a bank becomes insolvent, a depositor gets nothing over and above the insurance limit (of Rs 1 lakh).But in case a bank becomes insolvent in FRDI bill regime, the depositor gets the insurance amount (unspecified, surely an enhanced amount, to be decided later after the bill is enacted) and the balance gets converted into a longer term instrument (i.e. money is not lost).The contrast is clear. The depositor at least can stake claim over his money once the FRDI Bill (in its current form) comes. Unlike the past where he has to say goodbye to anything above Rs 1 lac.Politicians of various stripes have started to raise red flags about a provision in a bill that the present Indian government intends to move in the Lok Sabha in the upcoming winter session, which could theoretically allow beleaguered banks and financial institutions to scoop up depositors' money to stop them from going bust.It is called a "bail-in" - a concept coined during the European banking crisis of 2008-09 - which has been wormed into THE FINANCIAL RESOLUTION AND DEPOSIT INSURANCE (FRDI) BILL.When a bail-in is triggered, a bank's depositors run the risk of being forced to bear a part of the burden of recapitalising the entity. In effect, a part of their deposits may have to be written off. That is what happened to bondholders and depositors in Cyprus banks with more than 100,000 euros in their accounts.Finance ministry officials have said there is no cause for alarm and the provision is meant to ensure emergency capital for banks. They pointed out that banks in India have been fairly well regulated and there have been very few bank failures since 1969 when banks were nationalised.Then, what is the gist of changes for Creditors in The FRDI Bill, At present if a bank becomes insolvent, a depositor gets nothing over and above the insurance limit (of Rs 1 lakh).But in case a bank becomes insolvent in FRDI bill regime, the depositor gets the insurance amount (unspecified, surely an enhanced amount, to be decided later after the bill is enacted) and the balance gets converted into a longer term instrument (i.e. money is not lost).The contrast is clear. The depositor at least can stake claim over his money once the FRDI Bill (in its current form) comes. Unlike the past where he has to say goodbye to anything above Rs 1 lac.Some political parties have started voicing deep concern about Section 52 of the bill that could in certain circumstances allow a "specified service provider" - read a bank - to cancel, modify or change the liability that it owes. i.e. It can change/convert the nature of liability of Deposits to a bond or equity of the Bank.But this will have to be done in consultation with THE RESOLUTION CORPORATION, to be set up under the legislation, which will have THE POWER TO PROVIDE DEPOSIT INSURANCE TO BANKING INSTITUTIONS, find ways to haul a failing bank back from the brink, or act as a liquidator in the event that a liquidation order is given."This is a serious issue," says a former MP. "The Modi government seems to be surreptitiously sneaking in a measure to institute 'hair-cuts' on depositors' money in a manner that is similar to what we have seen in Greece, Cyprus and other European countries which have gone through an economic crisis."A note posted by a political party recently said: "If the draft bill gets the nod of Parliament, it will empower the Resolution Corporation to cancel a bank's liability or alter it to another security."The bail-in instrument may "convert any securities from one class to another, including the creation of a new security in modification of an existing security", the legislation says.Before a bail-in instrument is to be activated, THE RESOLUTION CORPORATION will have to inform the central government about the reasons for issuing it in the first place and the effects it will have. A copy of that report will have to be immediately placed before each House of Parliament.Finance ministry officials, however, played down the campaign against the bail-in provision in the bill."The purpose of the 'bail-in' is to help BRING IN EMERGENCY CAPITAL FOR BANKS. It does not mean that this clause will be used and certainly cannot be invoked for PSU banks which are covered fully by the state's sovereign guarantee," said a ministry official.RISK COVER OF DEPOSITSAt present, a depositor in a bank can draw partial comfort from the fact that his deposit is insured to the extent of Rs 1 lakh with the Deposit Insurance and Credit Guarantee Corporation which was set up under an act of Parliament in 1961.The Rs 1 lakh cover is meant for all deposits of an individual parked in savings bank and current bank accounts and held as fixed deposits, irrespective of how much is parked in these accounts.The FRDI LEGISLATION will change that significantly. The bill empowers THE RESOLUTION CORPORATION to decide the amount insured for each depositor. Theoretically, it is possible that the insured amount will vary for customers across different banks. It could also vary for different categories of customers within the same bank.A CORPORATION INSURANCE FUND will be created that will serve as the vehicle through which the deposit insurance will flow.The corporation, in consultation with the appropriate regulator, shall specify the total amount payable by the corporation to any one depositor.The decision on how much the insured amount should be/ will have to be decided by THE REGULATOR, which in the case of the banking industry is the Reserve Bank of India. It would be fair to assume that once the bill is passed, the regulator will clarify the amount to be insured. It has not given any such indication yet whether the sum would be higher or lower than the existing level of Rs 1 lakh.STABILITY OF BANKSLet us see a classic case of Global Trust Bank (India) (GTB).Global Trust Bank (India) (GTB) was founded on 21 October 1994 and commenced operations at Secunderabad. Its founders included Ramesh Gelli (its first Chairman), Sridar Subasri, and Jayant Madhob, among others. The bank introduced a number of technology-based innovations and responsive service.GTB was involved in the stock market scam of 2001 that the stockbroker Ketan Parekh ran. GTB lent heavily to individuals speculating in the stock market; when the market crashed the bank suffered extensive losses. One consequence was that merger talks with UTI Bank fell through. The Reserve Bank of India (RBI) forced Gelli to resign. Gelli's successor resigned after six months, and Gelli's son joined the board of directors. In 2004, Gelli briefly returned to the bank in February 2004 before being again forced to resign.RBI examined GTB's accounts for 2001-02 and found that GTB's net worth had turned negative, but did not close the bank. GTB did not address its problems. Instead, and despite its dire straits, GTB continued to grow. It had 87 branches in 2002-2003, and grew to 103 branches before the RBI forced it to close. It also paid interest on deposits at a rate equal to or better than other banks in its area. GTB sought to recapitalize itself by bringing in new investors. In mid-2004 GTB was in close talks with Newbridge Capital. Newbridge was to invest US$200million, subject to RBI approval. However, RBI was reluctant to permit private investors to restructure GTB.The RBI issued a Moratorium Order on 24 July 2004. Before GTB's winding up, Goldman Sachs owned 4% of the bank and the International Finance Corporation owned 5%. Oriental Bank of Commerce acquired GTB on 14 August 2004. Shareholders in GTB received nothing for their shares; depositors, however, suffered no loss. After acquiring GTB, OBC discovered that GTB's situation was even worse than it had appeared at the time of acquisition. OBC did gain an increased presence in the southern parts of India, where its presence had been weak and GTB's was extensive.GTB had been leaner than OBC. OBC had ten times the staff and branches than GTB, but only four to five times as much in the form of deposits, investments, or advances.The instance was when Global Trust Bank (GTB) almost went belly up after taking an exposure to capital markets that breached regulatory caps. GTB was eventually merged with Oriental Bank of Commerce and none of its 1 million depositors lost any money. GTB shareholders, however, had to take a hit.In what is known as DERIVATIVE SCAM Banks suffered a heavy loss.The Reserve Bank of India slapped a maximum penalty, according to the Banking Regulation Act, on 19 commercial banks for mis-selling illegal derivative products to exporters in 2011.The following Article appeared in THE HINDU at that timeMis-selling of derivative products: RBI actshttp://www.thehindu.com/business/Economy/misselling-of-derivative-products-rbi-acts/article1983530.ece______________________The FRDI legislation, however, introduces the idea of systemically important financial institutions, which became a buzz phrase after the global economic crisis of 2008.Basically, it creates the notion of banks that are perceived as "too big to fail" and therefore forces regulators to step in with a bailout plan.The theory suggests that some financial institutions are so large and so interconnected that their failure would be disastrous to the economic system with the potential of having knock-on effects.India has already embraced this concept and has designated three banks - State Bank of India, ICICI Bank and HDFC Bank - as systemically important, which subjects them to higher levels of compliance with tough prudential standards.India's banking sector is currently in the throes of distress as a bad loans problem has erupted in the wake of several years of slow industrial growth.According to the RBI's Financial Stability Report released in June 2017, the gross non-performing advances (NPAs) or bad loans to total deposits ratio of all banks stood at 9.6 per cent as of March 2017. State-run banks currently have an even higher bad loans ratio of 13.69 per cent.In a related case to Global Trust Bank, In Central Bureau of Investigation Bank Securities and Fraud Cell Vs Ramesh Gelli and Others in the Supreme Court on 23 February 2016, SC lashed out at legislature for leaving a gap in amending work in related field, that there were anomalies between the two statutes. Which has huge implications for banks, regulators and consumers. That corresponding amendment in Section 46A of the Banking Regulation Act (BRA) was missing.Poor attention to detail by the law ministry meant that changes in the Indian Penal Code, in line with changes to the PCA, were not accompanied by a simultaneous amendment to Section 46A of the Banking Regulation Act (BRA). The SC order, in dealing with this omission said, “Section 46-A of Banking Regulation Act, 1949, cannot be left meaningless and requires harmonious construction.” Pertinently, the substance of Section 46A would not be defeated merely because the Prevention of Corruption Act deleted a few Sections from the Indian Penal Code without making corresponding changes to the BRA.In another related case to Global Trust Bank, In Ramesh Gelli Vs The Inspector of Police on 28 August 2017 in the Madras High Court, said that Even a Private Sector Bank employee is also a Public Servant for purposes of Prevention of Corruption ActIndian Corporate do not do any due-diligence before investing in derivative/ speculative tradeIndian lending Institutions perhaps does not do proper due diligence prior to sanctioning of loan to loan applicant.Either Banks are not making use of their report intelligently between credit worthy clients and doubtful clients.Or the business intelligence of credit agencies have no depth._______________________We have a host of credit rating agencies giving advice to corporates and Banks.Credit Rating Companies or more precisely called as the CRA are termed as one of the biggest players in the credit rating industry.As the name signify ratings, in simple terms rating the debtors are the task of these companies available across India, the good rating is the dream of all debtors or we can say people seeking loans to achieve their different dreams.As per the rules from the debiting companies and different loan based companies or bank, these ratings provided by Credit Agencies are crucial.You must be thinking about the link between Credit Rating and Loans, the link is simple as none of the company wants debtors with an irregular interest payment.The debts or loans you took in the past, these CRA have a total record of the payment and based on timely payment good credit ratings are provided and debtors offer easy loans and debts to regular and timely payers.There are a different range of debt instruments that decides CRAs, some of the top available options for the same are Government bonds, Corporate bonds, CDs, Mortgage-backed securities etc.Here we have 10 best credit rating agencies in India1. Crisil Limited2. Credit Information Bureau India Limited (CIBIL)3. Fitch Ratings India Private Ltd.4. Equifax5. Credit Analysis & Research Ltd6. ICRA Limited7. ONICRA8. High Mark Credit Information Services9. SME Rating Agency of India Ltd. (SMERA)10. Brickwork Ratings India Private Ltd.

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If your subscription renewal begins on a day NOT contained in a given month, then we will charge you on the last day of such month. You acknowledge and agree that the timing of when you are billed and the amount billed may vary due to free trials and other promotional offers, credits applied to your account, and changes in your subscription, and you hereby authorize us to charge you for the corresponding amounts. You are solely responsible for ensuring that your billing and payment information is correct to prevent your subscription from being cancelled. If we cannot charge your payment method for any reason (such as expiration or insufficient funds), and you have not cancelled your subscription, you remain responsible for any uncollected amounts, and we will attempt to charge the payment method as you may update your payment method information. This may result in a change to the start of your next subscription period and may change the date on which you are billed for each period. We reserve the right to cancel your subscription if we are unable to successfully charge your payment method to renew your subscription. When your subscription ends, you will lose access to the PicsArt Services that require a subscription.If we offer you a promotion or a promotional price for your subscription, the specific terms of the promotion will be disclosed or made available to you when you select your subscription plan and agree to the Additional Terms that will be provided to you and describe the particular promotion for your selected subscription plan. In the case of promotional pricing, after your promotion ends, we will begin billing you for your subscription at the regular price after the promotion ends unless you cancel your subscription prior to the end of the promotion.We reserve the right to change, modify or vary the price, package and features of the PicsArt subscription plans that we make available from time to time. If we change or modify the price and package of such subscription plans, we will provide you with advanced notice of the applicable changes or modifications. You may discontinue to use the PicsArt Services offered under a subscription plan and request the cancellation of your subscription to such PicsArt Services at any time. We will not be liable for reimbursing you for the cancellation of your PicsArt subscription.You may cancel your subscription by accessing your account information and following the posted instructions for cancellation of your subscription. By cancelling your membership, your account will automatically close at the end of your current billing period. Upon cancellation of your subscription, you may continue to use the applicable PicsArt Services through the remainder of your subscription term, as well as any Content that you previously created or reproduced through use of such PicsArt Services as of the date of cancellation of your subscription, provided that such use must be in compliance with these Terms.PicsArt Services and Your Content: Subject to these Terms, the PicsArt Services allow you to create Content and engage in the following non-commercial personal activities:store your Content privately with PicsArt or on your device;share your Content with PicsArt user(s) via direct message within the PicsArt Services;share your Content publicly with the PicsArt community;allow PicsArt and others to freely duplicate, edit and create and distribute derivative works of your Content within the PicsArt Services through the use of #freetoedit when you share your Content publicly with the PicsArt community;allow PicsArt and others to freely duplicate, edit and create and distribute derivative works of your Content within the PicsArt Services when you post your Content to the PicsArt community as a sticker; andshare your Content to a third-party service, such as Instagram or Facebook.PicsArt Community: The PicsArt Services includes hosting of an artistic supportive social media community of creators in forums that allow users to share certain Content, comments, communications and opinions with others in the PicsArt community, all in accordance with PicsArt’s community membership commitments, obligations and responsibilities, and the Terms.PicsArt Community Support: PicsArt avidly supports its community of creators. Our support includes maintaining strong processes and controls, under which PicsArt may in its sole discretion: (1) modify or terminate the PicsArt Services; (2) refuse or deny access to the PicsArt Services; (3) force forfeiture of or change any username for any reason, including, but not limited to, inactivity, trademark violation, impersonation or tendency to mislead; (4) remove any Content and terminate accounts in our sole discretion for reasons that include use of the PicsArt Services or posting of Content that is unlawful, offensive, harmful, inappropriate, predatory, discriminatory, threatening, libelous, defamatory, pornographic, sexually explicit, obscene or otherwise objectionable or violates any party’s intellectual property or these Terms.Ads, Offers, Sponsored Content and Promotions: The PicsArt Services may from time to time include ads, offers and sponsored content. We provide such ads, offers, and sponsored content to enable us to offer free base-level PicsArt Services accounts, as well as content and contests that are current and relevant to our users.Some of the PicsArt Services feature third party and PicsArt advertisements and promotions. You agree that PicsArt may place any advertising and promotions on, about, or in conjunction with your Content. The manner, mode, and extent of such advertising and promotions are subject to change without notice to you. You acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such.PicsArt provides submission terms, official rules and/or guidelines for certain activities on the PicsArt Services including, without limitation, challenges, contests and sweepstakes. The Terms incorporate by reference the specific submission terms, official rules and/or guidelines which appear in connection with information about a particular activity. To the extent that any conflict exists between the Terms and specific official rules or guidelines, the specific official rules or guidelines for the activity in which you choose to participate shall govern.Additional Terms: When using particular services or materials in connection with the PicsArt Services, you shall be subject to any posted rules applicable to such services or materials that may contain terms and conditions or other operating rules, policies and procedures in addition to those in these Terms (“Additional Terms”).PicsArt Services Research and Development: PicsArt continuously develops and improves the PicsArt Services, combining community data and technologies such as machine learning and artificial intelligence, to provide its growing community of users with novel and improved product offerings. An integral part of providing PicsArt Services improvements and updated security features, including automatically-installed modifications, upgrades, and error corrections, is PicsArt’s ability to modify the PicsArt Services software.Beta Services: PicsArt may from time to time offer certain services to you as closed or open beta services under a beta, labs, preview, non-production or similar designation for the purpose of testing and evaluation (“Beta Services”). You may accept or decline to use Beta Services in your sole discretion. Beta Services are for evaluation purposes only and may be subject to additional terms. PicsArt will have the sole authority and discretion to determine the period of time for testing and evaluation of Beta Services and further reserves the right to fully or partially discontinue Beta Services at any time and for any reason, temporarily or permanently, with or without notice. PicsArt will have no liability to you or any third party for any harm or damage arising out of or in connection with a Beta Service. BETA SERVICES ARE PROVIDED STRICTLY “AS IS” WITHOUT WARRANTY OF ANY KIND.Refunds: No refunds or credits for cancellation of your subscription. No refunds or credits for suspension or termination of this Agreement or your account for any reason.ACCOUNT CREATIONYou may need to create a PicsArt account in order to access and use certain PicsArt Services. To protect your PicsArt account, please keep your username and password strictly confidential. You are solely responsible for maintaining the confidentiality of your username, password and other account information, and are fully responsible for all activities performed through use under your PicsArt account. If required, you will create a username and password for your PicsArt account. You must provide accurate, complete and current registration information when you register and create a PicsArt account. In consideration of your use of the PicsArt Services, you agree to: (i) provide true, accurate, current, and complete registration information about yourself as prompted by the PicsArt Services; and (ii) maintain and promptly update the registration information to keep it true, accurate, current and complete. If you provide any registration information that is untrue, inaccurate, not current or incomplete, PicsArt has the right to limit, suspend or terminate your account and your access to the PicsArt Services (or any portion thereof). You agree to immediately notify PicsArt of any unauthorized use of your PicsArt account and ensure that you exit from your account at the end of each session. PicsArt will not be liable for any damages arising from your failure to comply with this Section.PICSART COMMUNITY MEMBERSHIPPicsArt’s ability to provide the PicsArt Services and support the PicsArt community depends on your commitments to us and other users, and the licenses and permissions you grant to us and other users, among other conditions of use.Do not use the PicsArt Services for any illegal or unauthorized purpose. Violators will be reported and content and accounts terminated in PicsArt’s sole discretion.Prerequisites:12+ years old.Not a convicted sex offender.Not previously subject to PicsArt account termination/sanction for violation of these Terms.NOT otherwise prohibited from holding a PicsArt account under applicable laws.Your Content License to PicsArt:By displaying or publishing (“posting”) any Content on or through the PicsArt Services, you grant to PicsArt a non-exclusive, fully paid and royalty-free, worldwide, sublicensable, transferable, license to use, modify, delete, add to, publicly perform, publicly display, reproduce, create derivative works of, and translate that Content, including without limitation distributing your Content through multiple tiers of the PicsArt Services in any media formats and through any media channels for any purposes. Further, you understand that PicsArt has the right to perform any technical functions necessary to offer the PicsArt Services, including but not limited to storing, reviewing, transcoding and/or reformatting your Content, whether posted, stored or shared through direct messaging, to allow its storage and use throughout the PicsArt Services. Note that PicsArt does not claim any ownership rights in the Content that you or other users post on or through the PicsArt Services (collectively, “User Content”); only the license provided here.You acknowledge and agree, for the avoidance of doubt, that when you post to the PicsArt community on or through the PicsArt Services, your Content is made available to the public – anyone who is following your account can see it, as well as anyone who searches for the hashtag(s) with which you label the Content, if any. It also means that your Content may be featured anywhere on the PicsArt Services or in media connected with the PicsArt Services, such as email and other communications. Further, when you share your Content through a third-party service that is integrated with the PicsArt Services (such as Instagram, Facebook, or Twitter), you authorize PicsArt to deliver the Content (or a version that we’ve modified, as needed) to that third-party service. This means that the third-party service’s handling of your Content will be subject to its own agreement with you, for which we are not responsible.You represent and warrant that (1) you own the Content posted by you on or through the PicsArt Services or otherwise have the right to grant the license set forth in this section; (2) your posting and PicsArt and other user’s use of your Content, as applicable, on or through the PicsArt Services does not violate the privacy rights, publicity rights, copyrights, contract rights, trademark rights or other intellectual property rights or any other rights of any person, company or other third party; and (3) the posting of your Content on the PicsArt Services does not result in a breach of contract between you and a third party. You agree to pay all royalties, fees, and any other monies owing any person, business, or other third party by reason of you posting any Content on or through the PicsArt Services in violation of this section. You further represent and warrant that any Content you have posted publicly or privately stored on the PicsArt Services, or directly messaged to another user, or created using the PicsArt Services is not harmful to any person or animal and is not in violation of applicable law.Your Content License to PicsArt Users: PicsArt offers its community the opportunity to create artistic derivative works using each other’s User Content for posting within the PicsArt community, provided such derivative works comply with PicsArt’s Community Membership terms and the Terms. User-to-user content licenses include, but are not limited to, the following:#freetoedit Content. In addition to and without limiting the generality of your Content license to PicsArt, described above, by posting Content on or through the PicsArt Services along with the #freetoedit hashtag, you grant to PicsArt users an irrevocable perpetual license allowing users to duplicate, create, post and distribute derivative works of your #freetoedit Content on the PicsArt Services.Stickers: In addition to and without limiting the generality of your Content license to PicsArt, described above, by posting or sending Content on or through the PicsArt Services as “Stickers,” you grant to PicsArt users an irrevocable perpetual license allowing users to duplicate, create, post and distribute derivative works of your Sticker Content on the PicsArt Services.Contests, Challenges and Promotions. PicsArt occasionally runs promotions that users enter using hashtags that may change the nature of the license you grant in your Content. Terms posted in connection with such promotions are Additional Terms that are incorporated into these Terms.Terminating Your Content Licenses: You can end your Content license to PicsArt by deleting your Content from the PicsArt Services or by terminating your account. However, if you have designated any Content as #freetoedit or a Sticker and posted it on the PicsArt Services, or applied any of your Stickers onto an image and posted it on the PicsArt Services, that Content will remain on the PicsArt Services in perpetuity – in other words, your posted #freetoedit and Sticker Content will continue to appear on the PicsArt Services if others who have used your Content have not deleted it. You acknowledge and agree that if you make Content public and later switch it to private or delete it, we may not be able to remove it from the PicsArt Services.Your Commitments, Obligations and Responsibilities:Your Account: You are responsible for any activity that occurs under your username name or is associated with your account. Keep your username and password secure; change your password often.Your Content: The following restrictions and obligations apply to any of your Content, whether you have posted it publicly or privately stored it on the PicsArt Services, or whether you have directly messaged it using a PicsArt Services direct messaging feature, or whether you have used the PicsArt Services to create the Content.Except as provided in these Terms, under intellectual property laws, or with a rights holder’s permission, your Content must not contain or reference any brand names, products or services of any company or any third-party trademarks, copyrights, logos, trade dress or promotion of any brand, product or service.Except as provided in these Terms, under right of publicity and privacy laws, or with a rights holder’s permission, your Content must not contain any third-party personal information (e.g., image, name, email address, location or phone number).Except as provided within this Agreement and under intellectual property laws, you may not copy, modify, translate, publish, broadcast, transmit, distribute, perform, display, or sell any PicsArt Content or User Content or any other third party Content appearing on or through the PicsArt Services except as expressly permitted by the holder of the rights in that Content.Your Content must not contain writing, images, language or other material that is misleading, indecent, offensive, sexually explicit, obscene, pornographic, tortious, disparaging, malicious, defamatory, slanderous, or libelous, or depicts cruelty or harm to any person or animal or an unsafe practice.Your Content must not contain content, images, language, or other material that reflect, advocate, or promote bigotry, racism, hatred, harm, or exploitation of or against any class, group or individual, discrimination based on race, gender, religion, nationality, disability, sexual orientation or age.Your Content must not promote or glorify self-harm, violence, or mutilation.Your Content must not depict abuse of and harm to children – PicsArt will report you and any such Content immediately to proper authorities.Your Content must not contain writing, images, or other material that is in violation of any applicable United States federal or state laws or regulations.Critical Platform Prohibitions: You agree not to: (1) modify or adapt the PicsArt Services, or create or modify another website or mobile application so as to falsely imply that it is associated with PicsArt or the PicsArt Services; (2) attempt to gain unauthorized access to the PicsArt Services or its systems or networks, or access PicsArt’s private API by any means other than in compliance with rules we set on API access; (3) crawl, scrape, or otherwise cache any content from the PicsArt Services, including but not limited to user profiles and photos; (4) spam or submit any unwanted email or comments to any users of the PicsArt Services; (5) use web URLs in your username without prior written consent from PicsArt; (6) transmit any worms, viruses, or other destructive code; (7) resell or charge others for use of or access to the PicsArt Services; (8) duplicate, reproduce, transfer, give access to, copy or distribute any part of the PicsArt Services in any medium without PicsArt’s prior written authorization; (9) attempt to reverse compile, reverse engineer, alter, make derivative works of, disassemble, or modify any part of the PicsArt Services; (10) access any part of the PicsArt Services in order to build a similar or competitive service; or (11) interfere with or disrupt the integrity or performance of the PicsArt Services or data.Feedback: PicsArt may occasionally invite you, or you may choose, to provide comments or ideas to PicsArt or its representatives about the PicsArt Services, including, without limitation, about how to improve the PicsArt Services or other PicsArt products (“Ideas”). By submitting any Ideas to PicsArt or its representatives, you agree that your disclosure is gratuitous, unsolicited and without restriction and will not place PicsArt under any fiduciary or other obligation, and that PicsArt is are free to use the Ideas without any additional compensation to you, and/or to disclose the Ideas on a non-confidential basis or otherwise to anyone. You further acknowledge that, by acceptance of your Ideas, PicsArt does not waive any rights to use similar or related ideas previously known to PicsArt, or developed by its employees, or obtained from sources other than you.INTELLECTUAL PROPERTY INFRINGEMENT REPORTINGPicsArt specifically prohibits users from uploading, embedding, posting, emailing, transmitting or otherwise making available on or through the PicsArt Services any material that infringes any proprietary rights of any person or entity, including copyrights. PicsArt will remove any and all PicsArt Content or User Content if properly notified that such PicsArt Content or User Content infringes another’s intellectual property rights. We respond to notices of copyright infringement in compliance with the U.S. Digital Millennium Copyright Act and have a policy of terminating repeat infringers in appropriate circumstances. If you have a valid claim, report infringement of your intellectual property by sending your claim to [email protected]. Any intellectual property claim, including copyright, submitted to PicsArt in writing must contain the following information: (i) an electronic or physical signature of the person authorized to act on behalf of the owner of an exclusive intellectual property interest; (ii) a description of the intellectual property, including any registration numbers, that you claim has been infringed; (iii) a description of where the material that you claim is infringing is located on the PicsArt Services that is reasonably sufficient to enable PicsArt to identify and locate the material; (iv) contact information (name, address, email, phone) for how you would like PicsArt to contact you; (v) a statement by you that you have a good faith belief that the disputed use is not authorized by the copyright owner, its agent, or the law; and (vi) a statement by you that the above information in your notice is accurate and under penalty of perjury that you are authorized to act on behalf of the copyright owner or the owner of an exclusive right in the material.In the event you have been notified that Content you posted has been removed due to a valid copyright DMCA take-down request from a third party and you believe you have a valid basis for appealing the removal of your content, you may submit a counter-notice by sending a notification to [email protected] that includes: (i) your physical or electronic signature; (ii) identification of the content that has been removed; (iii) a statement that you have a good faith believe that the content was removed as a result of mistake of a misidentification of the content; (iv) your contact information (name, address, email, phone); (v) a statement that you consent to the jurisdiction of the Federal Court for the judicial district in which your address is located and that you will accept service of process from the third party who submitted the initial infringement claim to PicsArt. Once PicsArt receives your counter-notice, PicsArt will send a copy of your counter-notice, including the contact information provided by you, to the third party who submitted the initial infringement claim to PicsArt. If the third party who submitted the initial infringement claim does not notify us that they have filed an action seeking a court order to restrain you from engaging in infringing activity on PicsArt within 10 to 14 business days, PicsArt will allow you to replace the content in accordance with DMCA procedures. Please note that restoration of content by PicsArt may not be technically feasible.SERVICE INTERRUPTION; REVISIONS & UPDATESThere may be occasions when the PicsArt Services are interrupted for scheduled maintenance or upgrades, for emergency repairs, or due to failure of telecommunications links and equipment. PicsArt encourages you to maintain your own backup of your User Content. In other words, PicsArt is not a backup service. You agree that PicsArt may, but is not required to, provide modifications, upgrades, error corrections or other updates, including automatically-installed modifications, upgrades, error corrections or updates (collectively, “Updates”) to the PicsArt Services, and thus may modify, with or without your knowledge, the PicsArt Services that you have already installed. These Updates may include changes or improvements to the Digital Rights Management (“DRM”) technology or other similar security system used by PicsArt to protect against the unauthorized copying of the PicsArt Services. You agree and consent to the automatic installation or application of these Updates and to only use the most updated version of the PicsArt Services provided to you by PicsArt through its application vendors.THIRD PARTY LINKSThe PicsArt Services may contain links to independent third-party websites and services (collectively, “Third Party Sites”). Third Party Sites are not under PicsArt’s control, and PicsArt does not endorse, is not responsible for, and shall have no liability to you with respect to the business practices, privacy practices, or content including, without limitation, any and all materials, information, merchandise, products or services displayed, featured, mentioned, advertised, distributed or sold on or through such Third Party Sites. If you access any Third Party Site, you acknowledge and agree that you do so at your own risk and that it is your responsibility to read and understand the privacy, membership, payment and other policies of the Third Party Sites and to determine whether or not you will have any interaction with any of those sites.DISCLAIMER OF WARRANTIESTHE PICSART SERVICES AND PICSART CONTENT ARE PROVIDED ON AND “AS IS,” “AS AVAILABLE” AND “WITH ALL FAULTS” BASIS. TO THE FULLEST EXTENT PERMISSIBLE BY LAW, PICSART MAKES NO REPRESENTATIONS OR WARRANTIES OR ENDORSEMENTS OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, AS TO: (A) THE PICSART SERVICES; (B) THE PICSART CONTENT; (C) USER CONTENT; OR (D) SECURITY ASSOCIATED WITH THE TRANSMISSION OF INFORMATION TO PICSART OR VIA THE PICSART SERVICES. PICSART HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND SATISFACTORY PURPOSE.PICSART DOES NOT REPRESENT OR WARRANT THAT THE PICSART SERVICES WILL BE ERROR-FREE, UNINTERRUPTED, OR SECURE; THAT USER CONTENT MARKED AS PRIVATE WILL NOT BECOME PUBLIC; THAT DEFECTS WILL BE CORRECTED; OR THAT THE PICSART SERVICES ARE FREE FROM ANY HARMFUL COMPONENTS, INCLUDING, WITHOUT LIMITATION, VIRUSES. PICSART DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES THAT THE CONTENT (INCLUDING ANY USER CONTENT OR PICSART CONTENT) AVAILABLE ON OR THROUGH THE PICSART SERVICES IS ACCURATE, COMPLETE, OR USEFUL. YOU ACKNOWLEDGE THAT YOUR USE OF THE PICSART SERVICES IS AT YOUR SOLE RISK. PICSART DOES NOT WARRANT THAT YOUR USE OF THE PICSART SERVICES IS LAWFUL IN ANY PARTICULAR JURISDICTION, AND PICSART SPECIFICALLY DISCLAIMS SUCH WARRANTIES.YOU SPECIFICALLY ACKNOWLEDGE THAT PICSART DOES NOT ENDORSE ANY USER CONTENT OR OTHER THIRD PARTY CONTENT AND SPECIFICALLY DISCLAIMS ANY RESPONSIBILITY OR LIABILITY TO ANY PERSON OR ENTITY FOR ANY LOSS, DAMAGE (WHETHER ACTUAL, CONSEQUENTIAL, PUNITIVE OR OTHERWISE), INJURY, CLAIM, LIABILITY OR OTHER CAUSE OF ANY KIND OR CHARACTER ARISING OR RESULTING FROM ANY CONTENT (INCLUDING, WITHOUT LIMITATION, USER CONTENT), INTERACTIONS BETWEEN USERS OR THE DEFAMATORY, OFFENSIVE, OR ILLEGAL CONDUCT OF ANY THIRD PARTY AND THAT THE RISK OF HARM OR DAMAGE FROM THE FOREGOING RESTS ENTIRELY WITH YOU.LIMITATION OF LIABILITY