GST slabs rationalisation will depend on revenue buoyancy: Arjun Ram Meghwal

Rationalisation of tax slabs under the newly-introduced GST would depend on the rise in revenue collection in the days to come, MoS for finance and corporate affairs Arjun Ram Meghwal said on Saturday. Presently, there are five tax slabs including exempted category at zero, five, 12, 18 and 28 per cent. Meghwal said, while in pre-GST time only 80 lakh dealers were registered, another 13.2 lakh had been added post its introduction, of which 56,000 were from West Bengal only, the highest among the country.

Arjun Ram Meghwal, Rationalisation of tax slabs, GST, Arjun Ram Meghwal on GST, GST Network (GSTN), indian express newsRegarding GST Network (GSTN), he said that it would be further improved. “Registered dealers may be facing some teething problems. But the system is perfect”, he said.

The dealers would also have to maintain computerised records with regards to input tax credit and reverse charge mechanism, Meghwal said at a seminar in Kolkata. He said, all these were required to eliminate the shadow economy. Regarding tax incentives in areas like the north-east, HP and Uttarakhand after introduction of GST, Meghwal said it would be decided by the GST Council. Meghwal said that the government had introduced GST after consulting all the states and not on the basis of the majority.

Had there been an opposition from a single state, the government would not have introduced it.

Rupee dives 26 paise against US dollar

The rupee tumbled by 26 paise to 64.10 against the US dollar in early trade on Thursday on increased demand for the American currency from importers and banks amid foreign fund outflows. Besides, the dollar recovering from eight week lows against some currencies overseas and a lower opening in the domestic equity markets weighed on the rupee, dealers said.

Rupee dives, against US dollar, domestic equity markets, market news, Indian express newsThe rupee had lost 21 paise versus the dollar to end at 63.84 in the previous session. Meanwhile, the benchmark Sensex down 160.05 points, or 0.50 per cent, to 31,637.79 in early trade.

Rupee plunges 19 paise against US dollar

The rupee fell further by 19 paise to 64.27 against the US dollar in early trade today due to strong demand for the American currency from importers amid foreign fund outflows. Dealers said early losses in domestic equity markets also influenced the rupee. Besides, strength in the US dollar against some other currencies overseas weighed on the rupee sentiment, they said.

RBI, Reserve Bank of India, rupee rate, rupee reference rate, india market, rupee against dollarYesterday, the rupee had tumbled by 24 paise to hit a fresh one-week low of 64.08 against the US dollar. Meanwhile, the benchmark BSE Sensex tanked 336.46 points, or 1.06 per cent, to 31,194.87 in early trade today.

Down 317 points: Sensex posts 5th straight fall on geo-political tension

Stock markets on Friday fell for a fifth session, taking the Sensex down by another 317 points as State Bank of India plunged 5.36 per cent after it reported a rise in non-performing assets (NPAs) and investors continued to fret over rising US-North Korea tensions.

According to analysts, risk appetite took a hit after the Economic Survey said achieving the high end of the 6.75-7.5 per cent growth projected previously will be difficult and called for more interest rate cuts to boost the economy.

The BSE Sensex remained in the negative zone and settled down 317.74 points, or 1.01 per cent, at 31,213.59, its weakest closing since July 4. The index had tumbled 794.08 points in the last four sessions. The NSE Nifty after cracking the 9,700-mark to hit a low of 9,685.55, finally settled lower 109.45 points, or 1.11 per cent, at 9,710.80, a level last seen on July 7.

For the week, the Sensex and Nifty both recorded first fall in six weeks, plunging 1,111.82 points, or 3.43 per cent, and 355.60 points, or 3.53 per cent, respectively. Weakening global risk appetite in the wake of US-North Korea tension has triggered profit-taking after shares scaled record highs last week. Weakness in the rupee against the American currency and lacklustre global shares dragged down the indices, too.

“Profit booking in the higher levels led the market to close flat. However, the volatility is relatively low due to the prevailing sentiment. The market could turn into consolidation as buoyed sentiment may reverse due to the fact that there is a lack of support from earnings growth,” said an analyst.

Sensex, sensex close, sensex fall, bse sensex, nifty, market open, stock market, sebi, indian express news, business newsAnand James, Chief Market Strategist, Geojit Financial Services, said, “though the Sebi’s softened stance on shell companies revived midcap stocks, volatility persisted keeping risk appetite under check. VIX (volatility index) soared over 15 for the first time in 6 months, as anxiety prevailed over the aggravating tensions between the US and North Korea, and investors were largely cautious ahead of the weekend. IIP and CPI numbers due shortly should offer the markets some distraction. Investors would be keeping their eyes on escalating tensions on the Korean peninsula for its impact on neighbouring economic powerhouses.”

“Investors across the globe continued to pare risky positions amid rising geo-political tensions between the US and North Korea. Domestic sentiment was also adversely affected after the mid-year economic survey said there are downside risks to the Indian government’s growth forecast of 6.75-7.5 per cent for 2017-18,” said Karthikraj Lakshmanan, Senior Fund Manager, BNP Paribas Mutual Fund.

J Kumar Infraprojects and Prakash Industries resumed trading on Friday and crashed by up to 20 per cent to hit the lower permissible limit after SAT stayed the curbs imposed by Sebi on them.

Financial Data Management Centre: Law Minister clears body for collection of financial data

The Reserve Bank of India (RBI) would soon no longer be the sole collector and custodian of financial data as the Law Ministry has approved a revised Cabinet proposal on the creation of the Financial Data Management Centre (FDMC) that would subsequently collect raw data directly.

“FDMC will collect data in electronic format from the (financial) regulators. Over time, it will gradually build capacity to collect data from the regulated entities i.e. Financial Service Providers,” says the revised proposal which accepts that the data warehouse could be set up only through an Act.

Initially, FDMC was to be a non-statutory body to collect data from financial sector regulators, standardise and analyse them on issues relating to financial stability for onward decisions by the Financial Stability and Development Council (FSDC). It was also to provide regular access to the data. However, the Department of Legal Affairs turned down the initial Cabinet proposal saying that a non-statutory FMDC would find it difficult to acquire data from the regulators, majority of which were statutory.

Moreover, it said that any levy of penalty through a gazette notification for violation of data management scheme would neither be legally tenable nor withstand judicial scrutiny. “Courts may not take cognizance of any such offence and compounding of the same under the Code of Criminal Procedure is also not feasible.”

Non-performing assets, bad loans, FY17 bad loans, Insolvency and Bankruptcy Code, Reserve Bank of India, Finance ministry data on bad loansLast June, Legal Affairs said it had “no legal or constitutional objection” to the revised proposal as there was “no other option but to set up a statutory FDMC”. The new proposal provides for FDMC and the regulators to “enter into agreement” for flow of data, “stringent confidentiality norms” to ensure the same level of protection as provided by various acts applicable to the regulators and guarantees that the “data centre is at all times kept secure and effectively protected”.

In order to facilitate FDMC functioning, it also seeks “consequential amendments” in the RBI Act, Banking Regulation Act and the Payment and Settlement Systems Act as their confidentiality clauses do not allow access to raw data.

The RBI is against sharing raw data that it gets from banks and other market sources with FDMC as it is not obliged to share confidential client information of banks with anybody. The only exception is when a law enforcement agency has to get specifics on an individual company for investigation purpose. But it has to then approach the courts first to get an order to request the data from the regulators.

Suspected shell companies: J Kumar, Parasvnath, Prakash move SAT against Sebi order

At least three firms — J Kumar Infraprojects, Parasvnath Developers and Prakash Industries have approached the Securities Appellate Tribunal (SAT) against the circular of the Securities and Exchange Board of India (Sebi) classifying them as “suspected shell companies”.

This after Sebi directed the stock exchanges to initiate action against 331 listed companies which are suspected to be shell firms. These scrips will not be available for trading this month, and could even face compulsory delisting. The regulator’s directive came after the corporate affairs ministry shared a list of 331 listed companies that are suspected to be shell entities.

In its petition, J Kumar Infraprojects had requested that the Sebi direction on trading ban should have stayed with immediate effect. The company had submitted that Sebi’s trading ban on its shares is arbitrary and unreasonable.

During the hearing of the petition on Wednesday, the appellate tribunal said that it needs to know under what law or regulation Sebi has taken action against the firms. It said that Sebi should have followed natural justice before taking action against the 331 companies. SAT also said the capital markets regulator should hear the suspect shell companies’ representations and then pass orders.

Sebi has informed the tribunal that its action is not final. Sebi said that it has taken only a first time action against the suspected shell companies after the Ministry of Corporate Affairs shortlisted the firms. The regulator said that it has not concluded that all the companies are shell companies. SAT will continue to hear the case on August 10. Meanwhile, Sebi’s circular on suspected shell companies has generated mixed reactions amongst experts.

SEBI and Kwality Ltd, India news, National news, Business news, India Business news“I don’t see this as an order but a preventive measure by Sebi. Such measures are taken when the regulator feels that small investors could be at risk. Sometimes preventive measures can impact those who are not guilty as well but then there is ample provision in the law for such firms to take legal recourse. This measure will have a temporary negative effect on the stock markets but will help weed out companies which do not have genuine business operations,” said JN Gupta, co-founder and managing director of proxy advisory firm Stakeholder Empowerment Services (SES) .

Rajesh Narain Gupta, managing partner at SNG & Partners said Sebi’s order has taken industry and investors by surprise and has negatively affected the reputation of some firms that may not be shell companies.

“This has lead to erosion of serious wealth and if some of the companies are found to be not shell companies this order shall still be a death knell on their perception and valuation. Devil lies in details so we need to take a deep dive on this order. It is not clear whether show cause or appropriate notice was given to these companies to justify whether these are actually shell companies or not. Some of the names appear to be good names. Protection of consumer interest is paramount, however, balance needs to be explored between protection and logical interference,” said Rajesh Narain Gupta.

Bank of India turns the corner with Rs 88 crore profit

Riding on an improvement in asset quality and lower provisioning, public sector Bank of India (BoI) has reported a net profit of Rs 88 crore in the June quarter as against a net loss of Rs 741 crore in the same period last year.

While recovery in the quarter improved to Rs 1,360 crore from Rs 970 crore in the year-ago period, upgradation stood at Rs 1,379 crore in Q1 as compared to Rs 2,209 crore in the year-ago period and Rs 1,071 crore in the March 2017 quarter. “We focused on better recoveries, upgradation and prevention of slippages during the quarter and it helped us,” BoI managing director and CEO Dinabandhu Mohapatra said.

Bank of India, Bank of India profit, Bank of India net profit, Dinabandhu Mohapatra, indian express news, business news, bankingGross non-performing assets of the bank improved to 13.05 per cent from 13.38 per cent. Net NPAs were at 6.70 per cent as against 7.78 per cent a year ago. “Barring some unpleasant surprises from outside we will definitely be improving (in terms of NPAs) quarter-on-quarter,” Mohapatra said. The bank was able to contain its fresh slippages at Rs 4,037 crore from Rs 6,233 crore last year. Of the 12 large stressed accounts which the RBI has asked banks to refer to the NCLT under the Insolvency and Bankruptcy Code for resolution, the bank has an exposure to 10 accounts for Rs 8,200 crore.

Reserve Bank of India issues final guidelines for tri-party repo transactions

The Reserve Bank on Thursday issued the final guidelines on tri-party repo transactions as part of its attempt to energise the corporate bond market and generate more liquidity in the segment. A tri-party repo is a contract between a buyer and a seller of a security along with a third party agent. In most cases, the third-party agent may be a custodian bank, which will facilitate services like collateral selection, payment and settlement, custody and management during the life of the transaction.

Such repos can be traded over-the-counter (OTC) including on electronic platforms, or, on stock exchanges, and should reported within 15 minutes of the trade for public dissemination to CCIL or to exchanges or any other reporting platform authorised for the purpose by the Reserve Bank, it said in a notification.

The RBI had issued the draft guidelines on April 11, 2017 and had promised on the August 2 policy that it would issue the final guideline shortly and said “tri-party repos will enable market participants to use underlying collateral more efficiently and facilitate development of the term repo market.”

The draft guidelines were issued after recommendations from a committee headed by former deputy governor HR Khan in August 2016.

The RBI on Thursday allowed commercial banks, entities regulated by it or the Sebi, and those who have prior RBI approval to act as agents for tri-party repo.

The applicant should have at least five years of experience in the financial sector, preferably in offering custodial services. They will have to maintain minimum of Rs 25 crore in the form of net-owned funds has also been mandated.

reserve bank of india news, banking and finance news, business news, indian express newsTri-party repos may be traded using any trading process authorised under RBI directions,including bilateral/multilateral, anonymous or otherwise, quote driven or order driven.

On settlement, RBI said all settlements will be on delivery vs payment (DvP) basis, with or without netting of securities and/or cash. Settlement can also be guaranteed or non-guaranteed bilateral/ multilateral, through clearing houses of exchanges or any other clearing arrangement approved under the Payment and Settlement Systems Act of 2007.

On the tenor, haircut and disclosures, it said these will be identical to those applicable to normal repos, in terms of the Reserve Bank directions.

Repo is an instrument for borrowing funds by selling securities with an agreement to repurchase the same on a mutually agreed future date at an agreed price including interest for the funds borrowed, while reverse repo is an instrument for lending by purchasing securities with an agreement to resell the same on a mutually agreed future date at an agreed price including interest.

Interview: Equity exposure for govt, non-govt employees should be uniform, says PFRDA chairman Hemant Contractor

Hemant Contractor, chairman of the Pension Fund Regulatory and Development Authority (PFRDA), which regulates the National Pension System (NPS) with a corpus of close to Rs 2 lakh crore, says that it has managed to get over 10 per cent returns for its 1.67 crore subscribers in the past 8 years. In an interview with GEORGE MATHEW, Contractor, who was earlier the managing director of State Bank of India (SBI), spoke about the new plans and initiatives of the regulator. Edited excerpts:

What are your plans to expand the pension scheme? Have you worked out the auto-enrolment system?

Auto-enrolment is a concept which is popular in the UK and New Zealand, among other countries. These are voluntary schemes. What happens is that if a sector is covered under auto-enrolment, all the people working in that sector will automatically get covered under the pension scheme unless they chose to opt out. This has been tried out successfully in some countries. We feel that in India also there is a scope. This proposal is now with the government. This is mostly for the unorganised sector.

Are you planning to rework or review mandatory annuity under NPS?

Mandatory annuity is there to the extent of 40 per cent of the corpus of NPS. We have been discussing with the government some alternatives like systematic withdrawal plan. This is still under discussion with the government. We do feel that some choices should be given to the subscribers in addition to annuity.

Is PFRDA working on a plan to provide housing for members?

We had set up a committee. They had sent the final report last week. We will look into that. In many countries, people who join the pension scheme do have the facility of using some of the funds for the housing needs. Even the EPFO (Employees’ Provident Fund Organisation) is doing it.

Pension, pension fund, PFRDA, hemant contractor, PFRDA chairman interview, EPFO, provident fund, NPA, EPF, National Pension System, SBI, Hemant Contractor, chairman of the Pension Fund Regulatory and Development Authority (PFRDA).

What has been the response of the private sector to the pension scheme?

The private sector has grown very well. The All Citizens Scheme has grown by almost 100 per cent. The Atal Pension Scheme has also grown by 100 per cent. We have 60 lakh subscribers in Atal schemes. These schemes are doing well.

Employee provident fund (EPF) has more tax advantages when compared to NPS. Are you satisfied with this system?

We should keep it at par with EPF. Both are pension schemes. Treatment should be alike. That’s the stand we have taken.

Bill to merge subsidiary banks with SBI clears LS, govt says boost to parent bank

Lok Sabha passed bills Thursday clearing the merger of subsidiary banks of State Bank of India with the parent bank. The government said this consolidation would not only lead to cutting of losses but also increase capital base and the bank’s ability to give loan. Lok Sabha passed the bill to repeal the SBI (Subsidiary Banks) Act 1959 and State Bank of Hyderabad Act 1956, and to amend the State Bank of India Act 1955, following the merger of five associates with SBI.

MoS (Finance) Santosh Gangwar said with this merger, SBI enters the list of top 50 banks globally, at 45th place. “The merger will bring about increased capital base and increased ability to give loans. Also, small banks will get access to products like mutual funds,” he said.

Allaying apprehensions that the consolidation would lead to closing of branches wherever both the main SBI and the subsidiary had branches, thus leading to poorer access for customers, Gangwar said, “We want every person to have access to banking services . No bank branches will be closed down; rather wherever required, we will open branches.” He said the merger will help increase SBI’s scope of operation and will pose a challenge to private banks as it will work as per the requirements of the people. “The merger has been planned keeping in mind the benefit of people and going forward its benefits will be seen,” he added.

According to the statement of object and reasons of the State Banks (Repeal and Amendment) Bill 2017, after the acquisition of the subsidiary banks by SBI, the subsidiary banks have ceased to exist and, therefore, it is necessary to repeal the SBI India (Subsidiary Banks) Act and the State Bank of Hyderabad Act.

Five associates and the Bharatiya Mahila Bank became part of SBI from April 1, catapulting the country’s largest lender into the list of top 50 banks in the world. The five associates are the State Banks of Bikaner & Jaipur, Hyderabad, Mysore, Patiala and Travancore. SBI had 90% shareholding in State Bank of Mysore, 75% in State Bank of Bikaner & Jaipur and 79% in State Bank of Travancore.

demonetisation, rs 200 notes, note ban, SBI, reserve bank of india, indian express news, buisness news, economyFollowing the merger, the total customer base of SBI increased to 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs. The merged entity began operation with a deposit base of more than Rs 26 lakh crore and advances level of Rs 18.50 lakh crore.

As per the bill, after the acquisition of all the subsidiary banks, it is no longer necessary to retain such provisions in the State Bank of India Act 1955. “Therefore, certain amendments are necessary in the said Act in so far as they relate to the subsidiary banks. The amendments are consequential in nature,” it says. During discussion on the bill, the Opposition argued that it was a way to gloss over rising nonperforming assets of banks which in SBI’s case had risen to close to 1.4 lakh crore.

Bill for sports university tabled MoS (Parliamentary Affairs) S S Ahluwalia introduced a bill seeking to establish India’s first exclusive sports university of international standards. Ahluwalia introduced the bill after question hour in the absence of MoS for Sports Vijay Goel, who is indisposed. The National Sports University Bill 2017 will facilitate the establishment of the university in Manipur. There are several sports institutes in the country but the university will have a wider canvas, encompassing disciplines like sports science, sports technology and high performance training.