Short Note on M.R.T.

P Commission
Under the MRTP Act, a Commission has been established, the Chairman of which is always a person who is or has been qualified to be a judge of the Supreme Court or of High Court ( of a state). The members of the Commission are persons of ability, integrity and standing who have adequate knowledge or experience of or have shown capacity in dealing with problems relating to economics, law, commerce etc. The commission is assisted by the Director General of Investigation and Registration (DG) for carrying out investigation, or maintaining a register of agreements and for undertaking carriage of proceedings during the enquiry before the MRTP Commission. The powers of the Commission include the powers vested in a Civil Court and include the following further powers : 1. To direct an errant undertaking to discontinue a trade practice and not to repeat the same 2. To pass a cease and desist order 3. To grant temporary injunction, restraining an errant undertaking from continuing an alleged trade practice 4. To award compensation for loss suffered or injury sustained on account of RTP, UTP or MRTP 5. To direct parties to agreements containing restrictive clauses to modify the same 6. To direct parties to issue corrective advertisements
7. To recommend to the Central Government division of undertakings or

severance of interconnection between undertakings if their working is prejudicial to public interest or has led to or is leading to MTP or RTP

Suppliers and Distributors and the Customers and the Shareholders. the Board of Directors. Types of values include ethical/moral values. The code of conduct is necessary for the following : 1. processes. The mission statement indicates the purpose of a business. and aesthetic values. anthropology.Define values. customers. The first task thus is to develop a realistic vision for the business. 'To be preferred provider of comprehensive and world class investment and banking solutions to the Financial Institution Group (FIG) clients.  Mission Statement: The nature of a business is often expressed in terms of its mission statement. In order to develop a strong professional organisation one needs values which are spelt for an organisation through the following :  Vision: Whenever an organisation is set up there should be a very clear vision of how it it going to contribute to the immediate community without harming the physical environment. size and activities. 2. political) values. Values have typically been studied in sociology. such as a desire to avoid physical pain. Values tend to influence attitudes and behaviour. A value system is a set of consistent values and measures. social values. the assumption of which can be the basis for ethical action. It Disciplines and Discourages Unethical Business Practices: The code serves . seek pleasure. moral philosophy and business ethics. are considered subjective.  Code of Conduct: These are the Do's and Dont's or the work culture in an organisation. location staffing etc. doctrinal/ideological (religious. vary across individuals and cultures and are in many ways aligned with belief and belief systems. The code of conduct defines the rights and duties of all stakeholders starting from the CEO or Managing Director. A principle value is a foundation upon which other values and measures of integrity are based. Those values which are not physiologically determined and normally considered objective.. Employees. For example: The mission statement of ICICI Bank. the Managers. It also defines the company's markets. social psychology. What are the values required for a professional organisation ? A personal and/or cultural value is an absolute or relative ethical value. which would present a picture of the business in 3 to 5 years time in terms of its physical appearance. For inspiration and Guidance: The code of expresses a collective commitment of the organisation for the public good and thus guides and inspires all the stakeholders to maintain it. etc.

regulatory bodies like IRDA and SEBI. 5. 4. 3. . Creates a Good Public Image: The code presents a positive image of a committed professional and the brand image in the minds of the customers and general public. Quality Standards: Quality Standards are set which give us specifications regarding the quality. Education and Mutual Understanding: The code serves as a benchmark for developing a shared understanding by employees. professionals. safety and appropriate pricing of the a basis for investigating any unethical action on part of the company officials.

communicating coherent governance principles throughout the agency and ensuring the operation of checks and balances which effective governance demands. as well as the balance of skills and experience required to obtain continuous improvement. financial and ethical behaviour. providing for transparency and clear lines of responsibility and accountability.  Capable Management: Capable management includes setting in place the broad principles under which the agency operates. defining the duty of care to the agency's client group. integrating business risk management throughout the agency. 4. 3. Embracing better/more comprehensive performance management and agreeing performance measures with agency managers. 2. Management Information System is in place. establishing due processes. 5. and recognizing individual and . having sound communication. Reviewing its own processes and effectiveness. including setting clear objectives and an appropriate ethical framework operating in the public interest. evaluating performance. and adjusting the plans. conformance oversight and development of a comprehensive and formal frame work for reporting on agency performance and conformance. Executive Leadership Group has collaborative responsibility for key leadership roles including: strategic direction.What are the principles of good Corporate Governance ?  Effective Leadership: The CEO's role in governance is fundamental. It is able to maintain essential knowledge of business disciplines and has a proper control environment in place together with appropriate monitoring of compliance activities. having the right people and the right skills for the job. ensuring continual alignment of the competency profile of the agency to changing business needs. 1. assuring that satisfactory arrangements are in place for auditing the agency's financial affairs and setting out the relationship and responsibilities of internal and external audit and the audit committee. Monitoring policies directed to ensuring that the agency complies with relevant legislation and conforms with the highest standards of clinical/professional. processes. integrating sound business planning. implementing sound business planning. The executive also has a collective responsibility to provide leadership. an indication of leadership effectiveness us the way in which the organisation as a whole works together under the CEO's leadership. performance management. both internal and external. establishing clear boundaries for acceptable behaviour.

It includes: clarifying the links between risks/returns and resources priorities. mitigating risks that could prevent the agency from achieving its business objectives.  Diligent Monitoring: Diligent monitoring of risks and the effectiveness of mitigation strategies should include processes to assess the delivery of outputs and quality of control systems over time enabling the identification of corrective actions for continuous improvement. rather than focusing on detection of problems after they have occurred. multiple/conflicting objectives. lack of clear-cut concepts of success or failure. and constraints on applying positive or contributions. analyzing. To improve accountability agencies should enhance transparency and endeavour to reduce or eliminate: unclear lines of authority or too many layers of authority.  Clear Accountability and Responsibility: Clear accountability and responsibility is primarily through the CEO to the responsible Managers and the Executive Directors. Systems operating in a changing environment require close monitoring. benchmarking and other continuous improvement tools are to be used as part of the monitoring process. monitoring and controlling activities. the tension between central control and evolution. and specific risk management plans covering all services to clients as well as organisational and administrative support systems. What is the code of best practices for banks with respect to Guidelines .  Responsible Risk Management: Responsible risk management establishes processes for identifying. too many or too complex reporting mechanisms. including policy or legal requirements with no direct connection to program objectives. Quality assurance. which is more effective occurring in the course of normal operations.

the structure of bonds. the involvement of government is discernibly higher in banks due to importance of stability of financial system and the larger interests of the public. Banking as a sector has been unique and the interests of other stake holders appear more important to it than in the case of non-finance organisations. As per the norms. Since the market control is not sufficient to ensure proper governance in banks. safe custody of other valuables. In the case of traditional manufacturing corporations. prompting RBI to issue these norms. capital adequacy norms. foreign exchange transactions and treasury operations. the risk involved for depositors and the possibility of contagion assumes greater importance than that of consumers of manufactured products. the BPC should be a comprehensive and homogeneous document and take into account the instructions relating to the common fraud prone areas and their prevention issued to banks by the RBI from time to time. Narsimham Panel on banking sector reforms and recommendations of the estimate committee on prevention of frauds in banks. The Code should cover all the functional areas like cash.of RBI ? The Reserve Bank of India (RBI) has issued guidelines for the formulation of Best Practices Code (BPC) by banks to prevent frauds. Explain the general recommendations to build up effective Corporate . Further. credit portfolio. the notification said. investment portfolio. In the case of banking. deposit accounts. etc. The BPC may also incorporate practices that would help prevention of losses to its customers and include suitable guidance to such customers. of course but a segment of banks is mostly government owned as statutory corporations or run as cooperatives. the government does see reason in regulating and controlling the nature of activities. Some part of it is. the ownership pattern. liquidity ratios. The norms have been issued to bring about a certain minimum level of uniformity with regards to the content and coverage of the code. The banking sector is not necessarily totally corporate. The Code should also highlight the recommendations of the Ghosh Panel and the Mitra Committee. It should take into account the relevant recommendations of Narang Committee's study of large value frauds. the issue has been that of safeguarding and maximising the shareholder's value. The BPC modelled by select banks lacked uniformity in their content and coverage and was not prepared envisaged by the Mitra Committee ( on legal aspects of bank frauds ).

3. principles and norms which indicate development path. as a regulator has the responsibility on the nature of Corporate Governance in the banking sector. normative considerations and guidelines and norms for performance. special focus on the Corporate Governance in the banking sector becomes critical. 8. reporting and control. The Reserve Bank of India. A proper system consisting of clearly defined and adequate structure of roles. authority and responsibility. Vision. 7. 6. Given the dominance of public ownership in the banking system in India. Corporate Governance in the banks is of critical importance. Short note on money laundering . 2. Since banks are important players in the Indian financial system. To the extent that banks have systematic implications. With a view to reducing the possible fiscal burden of recapitalising the Public sector Banks attention towards Corporate Governance in the banking sector assumes added importance prerequisites for Good Governance. monitoring.Governance in the Banking sector ? 1. 5. A proper system for guiding. corporate practices in the banking sector would also set the standards for Corporate Governance in the private sector. 4.

transfer to different to accounts in different countries. 3. etc. 2. . As per the estimates of the IMF. Rules and regulations pertaining to financial transactions are performed in different banking related status. It would consist of bank to bank transfer. Non-compliance will result in BLACK LISTING OF BANKS. 3. 2. diamonds. Layering: This involves sending the money through banks to change its form and make it difficult to follow. This is estimated between US$ 1-2 trillion each year.It is a process by which large amounts of illegally obtained money ( from trafficking terrorist activity or some other crime ) and is shown as originating from legitimate source. How to Curb Money Laundering: 1. Integration: The money re-enters the main stream economy in legitimate looking form. Placement: In this first stage. Implement anti-money laundering operations. the launderer inserts the dirty money. This would be in the form of final bank transfer by the 'launderer' for investing in a business. Co-operation with the law enforcement agencies. Making deposits and withdrawals continuously and purchasing high value items like cars. Customer Identification: KYC norms to be followed. PROCESS: 1. wire transfer from one account to another. 4. into the banks in the form of cash bank deposits. the aggregate size of money laundering in the world could be somewhere between 2-5% of the world's GDP.



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