NEW DELHI (PTI): Four foreign banks involved in the multi crore securities scam entered into the majority of 58,000 transactions for an aggregate value of rs 9,06,192 crore (face value) during a period of 14 months, a statistical analysis of the transactions shows.
The second interim report of the Janakiraman committee which went into the scam said a bank wise analysis of these transactions showed that a very large portion of these (67.68 per cent) was entered into by four foreign banks — Citibank, Standard Chartered Bank, Bank of America, Anz Grindlays Bank.
As the deposit base of these banks when compared to the total banking system is not very large (three per cent in 1990-91) it is obvious that the transactions were not entered into for the purpose of funds management but rather for the . arbitrage resulting from purchase and sale, it said.
Of the reported transactions, 55.7878 per cent was on ready forward basis and only 5.26 per cent of the transactions were for Outright purchase or sale.
Since as much as 38.96 percent of the transactions was reported as others , ‘one could presume that commitments to repurchase or resell were not documented as also” ready forward transactions on client’s accounts under portfolio Management schemes and ready — forward transactions on brokers’ accounts.
About 61,35 per cent of the transactions (face value) was entered into through brokers and four brokers alone accounted for over 20 per cent of the total face value of transactions entered into through’ brokers.
Article extracted from this publication >> July 17, 1992
