Financial Digest Apr11

Financial Awareness & General Awareness
FINANCIAL AWARENESS
AND
GENERAL AWARENESS
Union Budget 2011-12 : At a Glance

Rs. In Crores 2009-10 Actual 2010-11 Budget estimates 2010-11 Revised Estimates 2011-12 Budget estimates
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
Revenue Receipts Tax Revenue (net to Centre) Non-tax Revenue Capital Receipts (5+6+7) Recoveries of Loans Other Receipts Borrowings and other liabilities Total Receipts (1+4)$ Non-plan Expenditure On Revenue Account of which, Interest Payments On Capital Account Plan Expenditure On Revenue Account On Capital Account Total Expenditure (9+13) Revenue Expenditure (10+14) Capital Expenditure (12+15) Revenue Deficit (17-1)
572811 456536 116275 451576 8613 24581 418482 1024487 721096 657925 213093 63171 303391 253884 49507 1024887 911809 112678 338998 (5.2) 418482 (6.4) 205389 (3.1)
682212 534094 148118 426537 5129 40000 381408 1108749 735657 643599 248664 92508 373092 315125 57967 1108749 958724 150025 276512 (4.0) 381408 (5.5) 132744 (1.9)
783833 563685 220148 432743 9001 22744 400998 1216576 821552 726749 240757 94803 395024 326928 68096 1216576 1053677 162899 269844 (3.4) 400998 (5.1) 160241 (2.0)
789892 664457 125435 467837 15020 40000 412817 1257729 816182 733558 267986 82624 441547 363604 77943 1257929 1097162 160567 307270 (3.4) 412897 (4.6) 144831 (1.6)
20. Fiscal Deficit {16-(1+5+6)} 21. Primary Deficit (20-11)
Cental Plan outlay by sectors

Rs. In crores 2010-11 Budget Estimates 2010-11 Revised Estimates 2011-12 Budget Estimates
Agriculture and Allied Activities Rural Development Irrigation and Flood Control Energy Industry and Minerals Transport Communications Science Technology & Environment General Economic Services Social Services General Services Grand Total
12308 55190 526 146579 39019 101997 18529 13677 7554 127570 1535 524484
14362 55348 413 126225 38852 98727 12169 12652 14878 127157 1377 502250
14744 55288 565 155495 45214 116861 20256 16186 15802 144816 7230 592457
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Key Features of Budget 2011-2012
The Budget 2011-12 was presented by the Finance Minister in the Parliament on Feb 28, 2011. The major highlights are: OPPORTUNITIES Swift and broad based growth in 2010-11 has put the economy back to its pre-crisis growth trajectory. Fiscal consolidation has been impressive. Significant progress in critical institutional reforms that would set the pace for double-digit growth in the near future. Dynamism in the rural economy due to scaled up flow of resources to the rural areas. CHALLENGES Structural concerns on inflation management to be addressed by improving supply response of agriculture to the expanding domestic demand and through stronger fiscal consolidation. Implementation gaps, leakages from public programmes and the quality of outcomes pose a serious challenge. Impression of drift in governance and gap in public accountability is misplaced. Corruption as a problem to be fought collectively. Government to improve the regulatory standards and administrative practices. Inputs from colleagues on both sides of House are important in the wider national interest. Budget 2011-12 to serve as a transition towards a more transparent and result oriented economic management system in India. OVERVIEW OF THE ECONOMY Gross Domestic Product (GDP) estimated to have grown at 8.6 % in 2010-11 in real terms. Economy has shown remarkable resilience. Continued high food prices have been principal concern this year. Consumers denied the benefit of seasonal fall in prices despite improved availability of food items, revealing shortcomings in distribution and marketing systems. Monetary policy measures taken expected to further moderate inflation in coming months. Exports have grown by 29.4 %, while imports have recorded a growth of 17.6 % during April to January 2010-11 over the corresponding period last year. Indian economy expected to grow at 9 % with an outside band of +/- 0.25 % in 2011-12. Average inflation expected lower next year and current account deficit smaller. SUSTAINING GROWTH Fiscal consolidation Fiscal consolidation targets at Centre and States have shown positive effect on macro economic management of the economy. Amendment to Centres FRBM Act, 2003 laying down the fiscal road map for the next five years to be introduced in the course of the year. Proposal to introduce the Public Debt Management Agency of India Bill in the next financial year. Tax Reforms Direct Taxes Code (DTC) to be finalised for enactment during 2011-12. DTC proposed to be effective from April 1, 2012. Areas of divergence with States on proposed Goods and Services Tax (GST) have been narrowed. As a step towards roll out of GST, Constitution Amendment Bill proposed to be introduced in this session of Parliament. Significant progress in establishing GST Network (GSTN), which will serve as IT infrastructure for introduction of GST. Expenditure Reforms A Committee already set up by Planning Commission to look into the extant classification of public expenditure between plan, non-plan, revenue and capital. Subsidies Nutrient Based Subsidy (NBS) has improved the availability of fertiliser; Government actively considering extension of the NBS regime to cover urea. Government to move towards direct transfer of cash subsidy to people living below poverty line in a phased manner for better delivery of kerosene, LPG and fertilisers. Task force set up to work out the modalities for the proposed system. Peoples ownership of PSUs Overwhelming response to public issues of Central Public Sector Undertakings during current year. Higher than anticipated non-tax revenue has led to reschedulement of some disinvestment issues planned for current year. Rs. 40,000 crore to be raised through disinvestment in 2011-12. Government committed to retain at least 51 % ownership and management control of the Central Public Sector Undertakings. INVESTMENT ENVIRONMENT Foreign Direct Investment Discussions underway to further liberalise the FDI policy. Foreign Institutional Investors SEBI registered mutual funds permitted to accept subscription from foreign investors who meet KYC requirements for equity schemes. To enhance flow of funds to infrastructure sector, the FII limit for investment in corporate bonds issued in infrastructure sector being raised. Financial Sector Legislative Initiatives
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To take the process of financial sector reforms further, various legislations proposed in 2011-12. Amendments proposed to the Banking Regulation Act in the context of additional banking licences to private sector players. Public Sector Bank Capitalisation Rs. 6,000 crore to be provided during 2011-12 to enable public sector banks to maintain a minimum of Tier I CRAR of 8 %. Recapitalisation of Regional Rural Banks Rs. 500 crore to be provided to enable Regional Rural Banks to maintain a CRAR of at least 9 % as on March 31, 2012. Micro Finance Institutions India Microfinance Equity Fund of Rs. 100 crore to be created with SIDBI. Government considering putting in place appropriate regulatory framework to protect the interest of small borrowers. Womens SHGs Development Fund to be created with a corpus of Rs. 500 crore. Rural Infrastructure Development Fund Corpus of RIDF XVII to be raised from Rs. 16,000 crore to Rs. 18,000 crore. Micro Small and Medium Enterprises Rs. 5,000 crore to be provided to SIDBI for refinancing incremental lending by banks to these enterprises. Rs. 3,000 crore to be provided to NABARD to provide support to handloom weaver co-operative societies which have become financially unviable due to non-repayment of debt by handloom weavers facing economic stress. Public sector banks to achieve a target of 15 % as outstanding loans to minority communities under priority sector lending at the earliest. Housing Sector Finance Existing scheme of interest subvention of 1 % on housing loan further liberalised. Existing housing loan limit enhanced to Rs. 25 lakh for dwelling units under priority sector lending. Provision under Rural Housing Fund enhanced to Rs. 3,000 crore. To enhance credit worthiness of economically weaker sections and LIG households, a Mortgage Risk Guarantee Fund to be created under Rajiv Awas Yojana. Central Electronic Registry to prevent frauds involving multiple lending on the same immovable property to become operational by March 31, 2011. Financial Sector Legislative Reforms Commission Financial Sector Legislative Reforms Commission set up to rewrite and streamline the financial sector laws, rules and regulations. Companies Bill to be introduced in the Lok Sabha during current session. AGRICULTURE Removal of production and distribution bottlenecks for items like fruits and vegetables, milk, meat, poultry and fish to be the focus of attention this year. Allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased from Rs. 6,755 crore to Rs. 7,860 crore. Bringing Green Revolution to Eastern Region To improve rice based cropping system in this region, allocation of Rs. 400 crore has been made. Integrated Development of 60,000 pulses villages in rainfed areas Allocation of Rs. 300 crore to promote 60,000 pulses villages in rainfed areas. Promotion of Oil Palm Allocation of Rs. 300 crore to bring 60,000 hectares under oil palm plantations. Initiative to yield about 3 lakh Metric tonnes of palm oil annually in five years. Initiative on Vegetable Clusters Allocation of Rs. 300 crore for implementation of vegetable initiative to provide quality vegetable at competitive prices. Nutri-cereals Allocation of Rs. 300 crore to promote higher production of Bajra, Jowar, Ragi and other millets, which are highly nutritious and have several medicinal properties. National Mission for Protein Supplement Allocation of Rs. 300 crore to promote animal based protein production through livestock development, dairy farming, piggery, goat rearing and fisheries. Accelerated Fodder Development Programme Allocation of Rs. 300 crore for Accelerated Fodder Development Programme to benefit farmers in 25,000 villages. National Mission for Sustainable Agriculture Government to promote organic farming methods, combining modern technology with traditional farming practices. Agriculture Credit Credit flow for farmers raised from Rs. 3,75,000 crore to Rs. 4,75,000 crore in 2011-12. Interest subvention proposed to be enhanced from 2 % to 3 % for providing short-term crop loans to farmers who repay their crop loan on time. In view of enhanced target for flow of agriculture credit, capital base of NABARD to be strengthened by Rs. 3,000 crore in phased manner. Rs. 10,000 crore to be contributed to NABARDs Short-term Rural Credit fund for 2011-12. Mega Food Parks Approval being given to set up 15 more Mega Food Parks during 2011-12. Storage Capacity and Cold Chains Augmentation of storage capacity through private entrepreneurs and warehousing corporations has been fast tracked. Capital investment in creation of modern storage capacity will be eligible for viability gap funding of the Finance Ministry. Agriculture Produce Marketing Act
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In view of recent episode of inflation, need for State Governments to review and enforce a reformed Agriculture Produce Marketing Act. Infrastructure and Industry Allocation of Rs. 2,14,000 crore for infrastructure in 2011-12. This is an increase of 23.3 % over 2010-11. This also amounts to 48.5 % of total plan allocation. Government to come up with a comprehensive policy for further developing PPP projects. IIFCL to achieve cummulative disbursement target of Rs. 20,000 crore by March 31, 2011 and Rs. 25,000 crore by March 31, 2012. Under take out financing scheme, seven projects sanctioned with debt of Rs. 1,500 crore. Another Rs. 5,000 crore will be sanctioned during 2011-12. To boost infrastructure development, tax free bonds of Rs. 30,000 crore proposed to be issued by Government undertakings during 2011-12. National Manufacturing Policy Share of manufacturing in GDP expected to grow from about 16 % to 25 % over a period of 10 years. Government will come out with a manufacturing policy. Two Committees set up for greater transparency and accountability in procurement policy; and for allocation, pricing and utilisation of natural resources. Issues relating to reconciliation of environmental concern from various departmental activities including those related to infrastructure and mining to be considered by a Group of Ministers. National Mission for hybrid and electric vehicle to be launched. Financial Assistance to be made available for metro projects in Delhi, Mumbai, Bengaluru, Kolkata and Chennai. Capital investment in fertiliser production proposed to be included as an infrastructure sub-sector. Exports Of 23 suggestions made by Task Force on Transaction Cost, constituted by the Department of Commerce, 21 suggestions already implemented. Action to be taken on the remaining two suggestions. Transaction Cost of Rs. 2,100 crore will thus be mitigated. Self assessment to be introduced in Customs to modernize the Customs administration. Proposal to introduce scheme for refund of taxes paid on services used for export of goods. Mega Cluster Scheme to be extended for leather products. Seven mega leather clusters to be set up during 2011-12. Jodhpur to be included for the development of a handicraft mega cluster. BLACK MONEY Five fold strategy to be put into operation to deal with the problem of generation and circulation of black money. Membership of various international fora engaged in anti money laundering, Financial integrity and Economic development, Exchange of information for tax purposes and transparency, secured. Various Tax Information Exchange Agreements (TIEA) and Double Taxation Avoidance Agreements (DTAA) concluded. Foreign Tax Division of CBDT has been strengthened to effectively handle increase in tax information exchange and transfer pricing issues. Enforcement Directorate strengthened three fold to handle increased number of cases registered under amended Money Laundering Legislation. Finance Ministry has commissioned study on unaccounted income and wealth held within and outside the country. Comprehensive national policy to be announced in near future to strengthen controls over prevention of trafficking on narcotic drugs. STRENGTHENING INCLUSION National Food Security Bill (NFSB) to be introduced in the Parliament during the course of this year. Allocation for social sector in 2011-12 (Rs. 1,60,887 crore) increased by 17 % over current year. It amounts to 36.4 % of total plan allocation. Bharat Nirman Allocation for Bharat Nirman programme proposed to be increased by Rs. 10,000 crore from the current year to Rs. 58,000 crore in 2011-12. Plan to provide Rural Broadband Connectivity to all 2,50,000 Panchayats in the country in three years. MGNREGA In pursuance of last years budget announcement to provide a real wage of Rs. 100 per day, the Government has decided to index the wage rates notified under the MGNREGA to the Consumer Price Index for Agricultural Labour. The enhanced wage rates have been notified by the Ministry of Rural Development on January 14, 2011. From 1st April, 2011, remuneration of Anganwadi workers increased from Rs. 1,500 per month to Rs. 3,000 per month and for Anganwadi helpers from Rs. 750 per month to Rs. 1,500 per month. Scheduled Castes and Tribal Sub-plan Specific allocation earmarked towards Schedule Castes Sub-plan and Tribal Sub-plan in the Budget. Allocation for primitive Tribal groups increased from Rs. 185 crore in 2010-11 to Rs. 244 crore in 2011-12. Education Allocation for education increased by 24 % over current year. Sarva Shiksha Abhiyan Rs. 21,000 crore allocated, which is 40 % higher than Budget for 2010-11. Pre-matric scholarship scheme to be introduced for needy SC/ST students studying in classes IX and X.
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National Knowledge Network Connectivity to all 1,500 institutions of Higher Learning and Research through optical fiber backbone to be provided by March, 2012. Innovations National Innovation Council set up to prepare road map for innovations in India. Special grant provided to various universities and academic institutions to recognise excellence. Skill Development Additional Rs. 500 crore proposed to be provided for National Skill Development Fund during the next year. An international award with prize money of Rs. 1 crore being instituted for promoting values of universal brotherhood as part of National celebrations of 150th Birth Anniversary of Gurudev Rabindranath Tagore. Health Plan allocations for health stepped-up by 20 %. Scope of Rashtriya Swasthya Bima Yojana to be expanded to widen the coverage. Financial Inclusion Target of providing banking facilities to all 73,000 habitations having a population of over 2,000 to be completed during 2011-2012. Unorganised sector Exit norms under co-contributory pension scheme Swavalamban to be relaxed. Benefit of Government contribution to be extended from three to five years for all subscribers who enroll during 2010-11 and 2011-12. Eligibility for pension under Indira Gandhi National Old Age Pension Scheme for BPL beneficiaries reduced from 65 years of age to 60 years. Those above 80 years of age will get pension of Rs. 500 per month instead of Rs. 200 at present. Environment and Climate Change Forests Rs. 200 crore proposed to be allocated for Green India Mission from National Clean Energy Fund. Environmental Management Rs. 200 crore proposed to be allocated for launching Environmental Remediation Programmes from National Clean Energy Fund. Cleaning of Rivers and Lakes Special allocation of Rs. 200 crore proposed to be provided for clean-up of some more important lakes and rivers other than Ganga. Some Other Initiatives To boost development in North Eastern Region and Special Category States, allocation for Special Assistance doubled. Rs. 8,000 crore provided in current year for development needs of Jammu and Kashmir. Allocation made in 2011-12 to meet the infrastructure needs for Ladakh (Rs. 100 crore) and Jammu region (Rs. 150 crore). Allocation under Backward Regions Grant Fund increased by over 35 %. Funds allocated under Integrated Action Plan (IAP) for addressing problems related to Left Wing extremism affected districts. 60 selected Tribal and backward districts provided with 100 % block grant of Rs. 25 crore and Rs. 30 crore per district during 2010-11 and 2011-12 respectively. A lump-sum ex-gratia compensation of Rs. 9 lakh for 100 % disability to be granted for personnel of Defence and Para Military forces discharged from service on medical ground on account of disability attributable to government service. Provision of Rs. 1,64,415 crore, including Rs. 69,199 crore for capital expenditure to be made for Defence Services in 201112. To build judicial infrastructure, plan provision for Department of Justice increased by three fold to Rs. 1,000 crore. Census 2011 To enumerate castes other than Schedule Castes and Schedule Tribes in Census 2011, caste to be canvassed as a separate time bound exercise. IMPROVING GOVERNANCE UID Mission From 1st October, 2011 ten lakh Aadhaar numbers will be generated per day. IT Initiatives Various IT initiatives taken for efficient tax administration. These include e-filing and e-payment of taxes, adoption of Sevottam concept by CBEC and CBDT, web based facility for tax payers to track the resolution of refunds and credit for pre-paid taxes and augmentation of processing capacity. Under Mission mode projects, funds released to 31 projects received from States/ UTs for computerisation of Commercial taxes. This will allow States to align with roll out of GST. Bill to amend the Indian Stamp Act proposed to be introduced shortly. A new scheme with an outlay of Rs. 300 crore to be launched to provide assistance to States to modernise their stamp and registration administration and roll out e-stamping in all the districts in the next three years. A new simplified form Sugam to be introduced to reduce the compliance burden of small tax payers falling within presumptive taxation. Three more benches of Settlement Commission to be set up to fast track the disposal of cases. Steps initiated to reduce litigation and focus attention on high revenue cases. Corruption Group of Ministers constituted to consider measures for tackling corruption. Recommendations to be made in a time bound manner.
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Performance Monitoring and Evaluation System In pursuance of recommendations of Second Administrative Reforms Commission, 62 departments covered under Performance Monitoring and Evaluation System (PMES) to assess their effectiveness. TAGUP Recommendations of Technology Advisory Group for Unique Projects (TAGUP) submitted and accepted in principle. BUDGET ESTIMATES 2011-12 Gross Tax receipts are estimated at Rs. 9,32,440 crore. Non-tax revenue receipts estimated at Rs. 1,25,435 crore. Total expenditure proposed at Rs. 12,57,729 crore. Increase of 18.3 % in total Plan allocation. Increase of 10.9 % in the Non-plan expenditure. XI Plan expenditure more than 100 % in nominal terms than envisaged for the Plan period. Increase of 23 % in Plan and Non-plan transfer to States and UTs. Fiscal Deficit brought down from 5.5 % in BE 2010-11 to 5.1 % of GDP in RE 2010-11. Fiscal Deficit kept at 4.6 % of GDP for 2011-12. Fiscal Deficit to be progressively reduced to 3.5 % by 2013-14. Effective Revenue Deficit estimated at 2.3 % of GDP in the Revised Estimates for 2010-11 and 1.8 % for 2011-12. All subsidy related liabilities brought into fiscal accounting. Net market borrowing of the Government through dated securities in 2011-12 would be Rs. 3.43 lakh crore. Central Government debt estimated at 44.2 % of GDP for 2011-12 as against 52.5 % recommened by the 13th Finance Commission. PART B TAX PROPOSALS Direct Taxes Exemption limit for the general category of individual taxpayers enhanced from Rs. 1,60,000 to Rs. 1,80,000 giving uniform tax relief of Rs. 2,000. Exemption limit enhanced and qualifying age reduced for senior citizens. Higher exemption limit for Very Senior Citizens, who are 80 years or above. Current surcharge of 7.5 % on domestic companies proposed to be reduced to 5 %. Rate of Minimum Alternative Tax proposed to be increased from 18 % to 18.5 % of book profits. Tax incentives extended to attract foreign funds for financing of infrastructure. Additional deduction of Rs. 20,000 for investment in long-term infrastructure bonds proposed to be extended for one more year. Lower rate of 15 % tax on dividends received by an Indian company from its foreign subsidiary. Benefit of investment linked deduction extended to businesses engaged in the production of fertilisers. Investment linked deduction to businesses developing affordable housing. Weighted deduction on payments made to National Laboratories, Universities and Institutes of Technology to be enhanced to 200 %. System of collection of information from foreign tax jurisdictions to be strengthened. A net revenue loss of Rs. 11,500 crore estimated as a result of proposals. Indirect Taxes To stay on course for transition to GST. Central Excise Duty to be maintained at standard rate of 10 %. Reduction in number of exemptions in Central Excise rate structure. Nominal Central Excise Duty of 1 % imposed on 130 items entering in the tax net. Lower rate of Central Excise Duty enhanced from 4 % to 5 %. Optional levy on branded garments or made up proposed to be converted into a mandatory levy at unified rate of 10 %. Peak rate of Custom Duty held at its current level. Agriculture and Related Sectors Scope of exemptions from Excise Duty enlarged to include equipments needed for storage and warehouse facilities on agricultural produce. Basic Custom Duty reduced for specified agricultural machinery from 5 % to 2.5 %. Basic Custom Duty reduced on micro-irrigation equipment from 7.5 % to 5 %. De-oiled rice bran cake to be fully exempted from basic Custom Duty. Export Duty of 10 % to be levied on its export. Manufacturing Sector Basic Custom Duty reduced for various items to encourage domestic value addition vis--vis imports, to remove duty inversion and anomalies and to provide a level playing field to the domestic industry. Rate of Export Duty for all types of iron ore enhanced and unified at 20 % ad valorem. Full exemption from Export Duty to iron ore pellets. Basic Custom Duty on two critical raw materials of cement industry viz. petcoke and gypsum is proposed to be reduced to 2.5 %. Cash dispensers fully exempt from basic Customs Duty. Environment Full exemption from basic Customs Duty and a concessional rate of Central Excise Duty extended to batteries imported by manufacturers of electrical vehicles. Concessional Excise Duty of 10 % to vehicles based on Fuel cell technology.
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Exemption granted from basic custom duty and special CVD to critical parts/assemblies needed for Hybrid vehicles. Reduction in Excise Duty on kits used for conversion of fossil fuel vehicles into Hybrid vehicles. Excise Duty on LEDs reduced to 5 % and special CVD being fully exempted. Basic Customs Duty on solar lantern reduced from 10 to 5 %. Full exemption from basic Customs Duty to Crude Palm Stearin used in manufacture of laundry soap. Full exemption from basic Excise Duty granted to enzyme based preparation for pre-tanning. Infrastructure Parallel Excise Duty exemption for domestic suppliers producing capital goods needed for expansion of existing mega or ultra mega power projects. Full exemption from basic Customs Duty to bio-asphalt and specified machinery for application in the construction of national highways. Other Proposals Scope of exemptions from basic Customs Duty for work of art and antiquities extended to apply for exhibition or display in private art galleries open to the general public. Exemption from Import Duty for spares and capital goods required for ship repair units extended to import by ship owners. Concessional basic Custom Duty of 5 % and CVD of 5 % available to newspaper establishments for high speed printing presses extended to mailroom equipment. Jumbo rolls of cinematographic film fully exempted from CVD by providing full exemption from Excise Duty. Out right concession to factory-built ambulances from Excise Duty. Relief measures proposed for raw pistachio, bamboo for agarbatti, lactose for the manufacture of homoeopathic medicines, sanitary napkins, baby and adult diapers. Proposals relating to Customs and Central Excise estimated to result in a net revenue gain of Rs. 7,300 crore. Service Tax Standard rate of Service Tax retained at 10 %, while seeking a closer fit between present regime and its GST successor. Hotel accommodation in excess of Rs. 1,000 per day and service provided by air conditioned restaurants that have license to serve liquor added as new services for levying Service Tax. Tax on all services provided by hospitals with 25 or more beds with facility of central air conditioning. Service Tax on air travel both domestic and international raised. Services provided by life insurance companies in the area of investment and some more legal services proposed to be brought into tax net. All individual and sole proprietor tax payers with a turn over upto Rs. 60 lakh freed from the formalities of audit. To encourage voluntary compliance the penal provision for Service Tax are being rationalised. Similar changes being carried out in Central Excise and Custom laws. Proposals relating to Service Tax estimated to result in net revenue gain of Rs. 4,000 crore. Proposals relating to Direct Taxes estimated to result in a revenue loss of Rs. 11,500 crore and those related to Indirect Taxes estimated to result in net revenue gain of Rs. 11,300 crore.
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Economic Survey 2010-11 (Highlights)
The Economic Survey gives a detailed account of the various sectors of the economy in a given current year. The presentation of the survey precedes the presentation of the Union Govt. Budget. The highlights of 2010-11 survey are: 1. The GDP growth rate has been 8.6% in 2010-11 and is expected to be around 9% in 2011-12. 2. Per capita national income increased from Rs.46492 to Rs.54927 in 2010-11. 3. The incremental capital output ratio is estimated to be 4.1% in the 11th plan. 4. Food grains production is estimated at 232.1 million tones (218.1 billion tonnes in 2009-10). 5. The growth has been broad based with a rebound in the Agriculture sector which is expected to grow around 5.4% in 2010-11. The share of agriculture in GDP is projected to be 14.2% in 2010-11 (19% in 2004-05). 6. The Survey points out that the agriculture sector growth in the first 4 years of the 11th Plan (2007-12) is estimated at 2.87%. 7. Industrial output increased by 8.6% compared to 8% in last year. The manufacturing growth is 9.1%. 8. Services sector growth declined to 9.7% compared to 10.1% last year. 9. The Survey has observed that a rise in savings and investments and pick up in private consumption has resulted in 9.7% growth of GDP at market prices (constant) in 2010-11. 10. Savings rate has gone up to 33.7% while the investment rate is up to 36.5% of GDP in 2009-10. 11. The telecommunications sector has done exceedingly well as the tele density has increased from 20.74% in 2004 to 143.95% in 2010 in urban areas. 12. In the rural areas it has gone up from 1.57% in 2004 to 30.18% in 2010. 13. Exports have grown by 29% during Apr-Dec 2010 period. These are expected to cross the annual export target of USD 200 billion for 2010-11. 14. Imports have increased by 19% during this period. 15. The trade gap narrowed down to US $ 82.01 bn in the same period. Balance of payment situation has improved due to surge in capital flows and rise in foreign exchange reserves which have been accompanied by rupee appreciation. 16. India's external debt stood at USD 295.8 billion at the end of Sept 2010. 17. During current fiscal foreign exchange reserves increased by US $ 18.2bn from US $ 279.4 bn in end April 2010 to US $ 297.3 bn in end December 2010. 18. The inclusive growth agenda of the Government is reflected in the 59% rise in Net Bank Credit . 19. The expenditure on Social sector programs has been stepped up by 5% point of GDP over the past 5 years. 20. The Survey points out that Gross Fiscal Deficit is 4.8% of GDP in 2010-11 as against 6.3% of GDP in the previous year. 21. The Revenue deficit in the current financial year has been 3.5% of GDP as against 5.1% in the previous year. 22. Priority sector lending of banks was 41.8% of ANBC and 3 banks (State Bank of Mysore, IOB, IDBI Bank) could not achieve the target. 23. No. of outstanding KCC cards was 955.77 lac with sanctioned amount of Rs.437271 cr as on 31.3.2010. 24. Operating profits of banks for 31.3.10 were Rs.122419 cr (2.03% of total assets) and net profits of Rs.57109 cr (0.95% of total assets). 25. In the calendar year 2010, S&P upgraded India's foreign currency outlook from negative to Stable, Fitch upgraded local currency outlook from negative to stable and Moody's upgraded its local currency outlook from Ba2 to Ba1. 26. The insurance penetration has increased to 5.39% in 2009 compared to 2.32% in 2000 when insurance sector was opened up. 27. Food inflation, higher commodity prices and volatility in global commodity markets, have been a cause of concern underscoring the need of fiscal consolidation and stronger reserves. 28. Recognizing the fact that inflation continues to be high even though it has come down markedly from where it was at the start of the fiscal year, the Survey underlined the need to monitor emerging trends in inflation on a sequential monthly basis. 29. The Survey has highlighted the increasing role of infrastructure services which have been deepening rapidly with rising investments. However unmet gaps still remains large and accelerated investments will be needed in the next Plan period for addressing delays, cost overruns and regulatory and pricing impediments. 30. The Survey has expressed satisfaction at the progress of fiscal consolidation and the role of monetary policy on tackling inflation, ensuring availability of funds and expansion of credit growth. 31. It has called for efficient taxation of goods and services by a new GST, raising revenues, installing stronger safeguards and measures to accelerate financial inclusion. 31. The specific schemes for SC/ST, OBCs and the regions such as North-East, expansion of Mahatma Gandhi NREGA, Sarva Shiksha Abhiyan , National Rural Health Mission, in terms of coverage as well as the spending and monitoring have found specific mention in the report.
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The survey has advised that a better convergence of the schemes to address the issues of unemployment and poverty alleviation could avoid duplication and leakages. 34. Regarding the outlook for the Indian economy, the Survey says that despite the risks of global events, such as volatility in commodity prices like crude oil exacerbated by political turmoil in the Middle-East, the Indian economy seems poised to scale greater heights in terms of macro economic indicators.
Railway Budget 2011-12 (Highlights)

Fares & Freight Keeps passenger fares unchanged Concession for women senior citizens cut to 58 yrs from 60 yrs Concession for senior male citizens up at 40% from 30% Accredited Journalists to get 50% concession twice a year AC e-ticket fee cut to Rs 10 from Rs 20 Non-AC e-ticket fee cut to Rs 5 from Rs 10 Passenger Amenities Multi-purpose Go India smart card single-window package for buying tickets for suburban, metro, long distance services Extension of Rail yatri sevaks trolleys at 6 more stations : Delhi, Mumbai, Chennai, Ahmedabad, Bangalore,Thiruvananthapuram New super air-conditioned class of travel to start soon. New Trains 9 new Duronto trains. Increase in frequency of 5 Duronto 3 new Shatabdi Express on Pune-Secunderabad, Jaipur-Agra & Ludhiana-Delhi routes Double decker AC trains: Jaipur to Delhi, Ahmedabad to Mumbai To introduce 56 new Express trains. Extend run of 33 trains 4 Vivek Express trains to mark 150th birth anniversary of Swami Vivekananda and 4 Kavi Guru Express trains to mark 150th birth anniversary of Rabindranath Tagore 10 Rajya Rani Express trains to connect state capitals with important cities in those states 4 Janam Bhoomi Gaurav trains for promotion of rail tourism To introduce 13 new passenger services 22 new DEMU trains and 8 new MEMU trains Suburban Trains To develop an integrated suburban rail network in large cities like Mumbai, Chennai, Hyderabad and Kolkata To set up Kolkata Vikas Corp for Metro 47 additional suburban services for Mumbai Nine additional services for Chennai suburban service 10 new suburban projects for Hyderabad-Secunderabad Safety To have anti-collision devices in 8 of 17 rail zones Anti-collision devices to be commissioned in three Railway zones including Southern, South Central and South Western soon New GPS-based fog safe device 172 Rail Over Bridges and 240 Rail Under Bridges to be built Real time train information system SIMRAN developed in association with IIT Kanpur Centres of excellence for development of Mechatronics Systems at RCF-Kapurthala and DMW-Patiala To do away with all unmanned rail crossings by FY12 Starting all-India security helpline Rate of accidents 0.17/km vs 0.29/km 5 yrs ago Financials Gross Traffic Receipts at Rs.1,06,239 crore. Ordinary Working Expenses assessed at Rs. 73,650 crore. Highest ever Plan outlay of Rs. 57, 630 crore proposed. To borrow Rs 205.9 bn in 2011-12 To issue tax-free bonds of Rs 10,000 cr in 2011-12 Rs 138.24 bn for acquisition of rolling stock Operating ratio excluding pay panel arrears 84% FY12 operating ratio pegged at 91.1% FY12 total working expenses seen at Rs 964 bn Set aside Rs 67.35 bn dividend for FY12 Freight loading aims at 993 million tn in FY12 Loading target reduced by 20 mn tn to 924 mn tn in FY12 To spend Rs 95.83 bn for new lines in FY12 Infrastructure New rail line addition at 700 km in 2010-11 vs average of 180 km annually earlier To double-line 867 km of rail tracks in FY12 1,017 km of gauge conversion in FY12
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To complete 1,000 km new rail lines in FY12 To set up track machine unit in Bengals Uluberia Working on 1,000 MW captive power plant in Nabinagar Setting up 1,300 MW thermal power plant in Adra, West Bengal To set up 700 MW gas-based power plant at Thakurli Rail industrial park at Jellingham, in West Bengal Rail industrial park at New Bongaigaon, Assam Two more wagon units under JV/PPP mode, one each at Kolar (Karnataka) and Alappuzha (Kerala), and one more at Buniadpur To begin Orissa wagon unit work on land identification To set up diesel locomotive centre in Manipur To set up software centre in Darjeeling Multi-disciplinary training centre at Kolkata, Dharwad and Pune Five new polytechnics Varanasi, Bhilai, Dharwad, Machlandpur and Vadodra New international training centre at Agra Railway to set up Bridge factory in J&K To set up Metro coach factory at Singur Committed to set up coach factory at Palakkad Aim to complete dedicated freight corridor by December 2016 Wagon procurement target at 18,000 units in FY12 Double decker container trains from Gujarat to inland port in Gurgaon To meet the demand for coaches, rail based industries to be set up under Vision 2020 442 stations upgradation as adarsh stations to be completed by March 2011 236 stations identified to be upgraded as adarsh stations Longest tunnel, in Kashmir, to be completed this year Miscellaneous Sukhi Grihasth Scheme - To build 10,000 shelters at Mumbai, Sealdah, Siliguri, Trichi and other places To set up budget hotels at 45 locations 2011 declared as green year Windmill at ICF, Chennai
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FINANCIAL AWARENESS
SEZ EXPORTS RISE THIS FISCAL: The Govt has formally approved 582 Special Economic Zones (SEZ), of which 374 SEZs have been notified as on February 17, 2011, and 130 SEZs are operational as on December 31, 2010. Exports from SEZs have recorded a 47% growth during April-Dec 2010 to Rs.2,23,132 Crore from Rs.1,51,785 Crore in the corresponding period in 2009. EXPORT CREDIT POSITION: Export Credit as a percentage of Net banking credit has gradually fallen to 4.1% as on 31.12.2010 from 4.3% as on 26.3.10, 4.6% on March 27, 2009 and 5.5% as on March 28, 2008. However, export credit, in itself, has grown by 11.3% as on December 31, 2010 to Rs.153,794 Crore from Rs.1,38,143 Crore as on March 26,2010. RBI MULLS ISSUING PLASTIC CURRENCY: RBI is planning to introduce, on a pilot basis, Plastic Notes of Rs.10 denomination in the jurisdiction of five out of its 22 Regional Offices. Given that India is a large cash economy and producing such a large amount of currency is expensive, RBI is exploring the option for economizing by replacing paper currency with plastic currency as some countries such as Singapore and Australia have already done. IFRS-GOVERNEMNT NOTIIFES ACCOUNTING NORMS: The Corporate Affairs Ministry announced that it has notified all the 35 accounting standards converged with IFRS. These converged standards will be called as IND AS. The date of implementation will be notified by the Ministry at a later date. SEBI SLAPS FINE ON CENTRAL BANK OF INDIA: SEBI has imposed a penalty of Rs.25 Lakh on Central Bank of India for alleged violation of various norms pertaining to debenture trustee. Central Bank of India functioned as debenture trustee for IL&FS even when there was loan outstanding which was also given by the Bank itself. According to norms, no debenture trustee will act for any issue if it has lent the loan and the loan is not fully repaid . SUPREME COURT VERSION ON ARBITRATORS JURISDICTION: Supreme Court has ruled that once an arbitrator was appointed by the Chief Justice under the Arbitration and Conciliation Act, neither party can challenge his jurisdiction. MSME TO GET REFINANCE HELP FROM SIDBI: Micro and Small Enterprises got a boost from the Budget with the Government deciding to provide Rs.5, 000 Crore to Small Industries development bank (SIDBI) for refinancing incremental lending by banks to MSME. Last year the Government had provided Rs.4000 Crore to SIDBI for the same purpose. FIIs ALLOWED TO INVEST MORE IN INFRASTRUCTURE BONDS: The centre has hiked the Foreign Institutional Investors (FII) investment limit in corporate bonds to $40 billion from earlier limit of $20 billion. Prior to this, the total FII investment limit in corporate bonds was pegged at $20 billion, including a $5 billion sub limit for bonds with a residual maturity of over 5 years and issued by companies in the Infrastructure Bonds. SALARIED TAXPAYERS EXEMPTION FILING RETURS: Salaried taxpayers with taxable income of up to Rs.5 Lakh may be exempted from the requirement of furnishing tax returns to the Income Tax Department. To reduce the compliance burden of small taxpayers, Budget 2011-12 has come up with a proposal to empower the Centre to exempt, by notification, any class or classes of persons from filing their tax returns. The amendment will take effect from June 1. DRAFT NORMS ON MERGERS, ACQUISITIONS RELEASED: The Competition Commission of India has released draft regulations pertaining to mergers and acquisition norms. The Draft specifies a fee of Rs.40 lakh payable along with the application form in case of merger and amalgamation or acquiring control over an enterprise. According to the Competition Act, the CCI had a 210 days timeline. RBI TO UPGRADE HIGH VALUE RTGS: RBI plans to upgrade its high-value on-line fund transfer system RTGS to enable handling of up to Rs.50 Lakh transactions a day and incorporate various new facilities for bank customers. Ever since RBI started RTGS system in March 2004, it has been highly successful and a preferred mode of inter-bank transfer of large value funds by customers. The RTGS System, currently, handles about three lakh transactions per day. INDIAS OUTSTANDING LIABILITIES AND GDP: Between 2002-03 and 2010-11, the Centres outstanding liabilities- all forms of internal and external debt on which it incurs interest-have mounted over 2.5 times, from Rs.15,59,201 Crore to Rs.39,31,104 Crore. As a proportion of the countrys GDP, the Centres debt stock has steadily fallen from a peak of 63.5% in 2002-03 to below 50%. The cost of serving the debt, measured by interest payments as a percentage of GDP, has also declined from 4.8 to around 3. FINANCIAL INCLUSION-KEY FOR NEW BANK LICENCE: Private sector players aspiring for banking licences may have to come up with a credible business plan for financial inclusion if their application is to find favour with RBI. This is because the RBI plans to specify financial inclusion plans as a key criterion for granting new banking licences. UNIQUE ID-BASED FINANCIAL INCLUSION MODEL: The National Payments Corporation of India (NPCI) has started field-trials of its Aadhaar(Unique Identification Number-UID) based Financial Inclusion Transaction Model in Jharkhand. This Model allows customers in rural areas to conduct banking transactions with Business Correspondents of any bank using UID authentication. GOVT. NOT TO INTERVENE IN FINANCIAL REGULATORS: The Government will not intervene in the functioning of the Financial Regulators stating that they are working well in their respective domain. At the same time, the respective laws governing RBI, SEBI and IRDA, had a specific provision (Section 3) enabling the Government to issue directions on matters of policy to these 3 financial sector regulators. As regards PFRDA, it was created through an executive order and a bill to provide statutory status is to be introduced. EXTENSION OF ECONOMIC ASSISTANCE SCHEME: The Cabinet Committee on Economic Affairs has approved operating and extending of Indian Development and Economic Assistance (IDEA) Scheme during the period 2010-11 to 2014-15 for both African and Non-African countries. Under the Scheme, Government-supported Exim Bank Lines of Credit (LOCs) are made available to developing countries for support of developmental and other projects as recommended by Ministry of External Affairs. RBI LAST SAY ON BANK M&As: Finance Minister has said that RBI will have the final say on bank mergers and acquisitions (M&A). Banking mergers and acquisitions will not come under the purview of the Competition Act or the Companies Act. The mergers and acquisitions of banks will be under the purview of the Banking Regulations Act. RBI will get the power to approve bank M&As once the Banking Laws Amendment Bill gets enacted. REGISTRATION MUST FOR ALL COMPANIES IN GOODS TRANSPORTATION : The Government has notified that all companies engaged in the business of road transportation of goods, including intermediaries like booking agents, will have to mandatorily register as Common Carriers soon, with the Government. Additionally, they will have to file quarterly returns with the State Transport Authorities, stating the details about freight charges and goods carried.
March 2010
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SUPREME COURT VERSION ON CASUAL LABOURERS: The Supreme Court has reiterated that casual workers can not claim regularization merely because they have been working for a considerable period of time. It said that the law consistently laid down by it was that casual employment terminates when the same is discontinued. CAG FOR DIRECTORATE OF SOCIAL AUDIT: The Audit Watchdog, the Comptroller and Auditor General of India has recommended to the States to set up directorates to train auditors from civil society for improving the social audit process in MGNREGA following reports of malpractices and corruption. A nominee of the Government auditor would be present in social audits that Gram Sabha would conduct twice a year. CAG would also do an annual audit as part of its mandate. This exercise would also bring in the new concept of social audit into mainstream. SEBI ALLOWS LAUNCH OF FUTURES CONTRACTS: SEBI has permitted the launch of futures contracts on 91-days treasury bills (T-bills) with immediate effect. The minimum size of the contract is Rs.2 Lakh. The maximum tenor of the contract is 12 months comprising three monthly contracts (near next and far months) followed by three quarterly contracts with March, June, September and December maturities. RASTRIYA BIMA SCHEME TO COVER MGNREGS: The Rashtriya Swasthya Bima Yojna may soon be extended to Mahatma Gandhi National Rural Employment Scheme (MGNREGS) workers who have completed 15 days or more during the previous financial year. The premium will be shared between the Central and State Governments in the ratio of 75: 25. The worker will not be required to pay any premium and will have to pay Rs.30 only as registration fee. SUPREME COURT RULING ON ATTACHMENT: the Supreme Court has said that the Government has the power to attach the properties of financial companies who dupe gullible depositors of their money by promising high interest rates, and then disappear even overseas, thereby leaving the depositors and the state police high and dry. GOVERNMENT RAISES TAX LITIGATION BAR: The Government has raised the monetary limits for tax officials to approach courts for dispute resolution. New limits for filing appeals by IT Dept. before ITAT, High Courts and the Supreme Court have been revised to Rs.3 lakh, Rs.10 Lakh and Rs.25 lakh, respectively from Rs.2 Lakh, Rs.4 Lakh and Rs.10 Lakh. The limits for CBEC have been set at Rs.1 lakh for CESTAT, Rs.2 lakh for High Courts and Rs.5 lakh for the Supreme Court. MUTUAL FUNDS EXIT LOAD BALANCES: SEBI, in a circular issued has said that mutual fund houses will now be allowed to dip into their exit load balances, termed Liabilities in the books of their schemes (and not included in the net asset value) and use them for selling and marketing expenses. These expenses would include the distributors commission EXPORTS, IMPORTS AND TRADE DEFICIT POSITION: Exports during April-February 2011 grew a robust 31.4% to reach $208.2 billion, due to diversification to new markets in Asia, Africa and Latin America as well as an increase in the US. Imports during the same period recorded an 19% growth to $305.3 billion taking the Trade Deficit to $97.1 billion. JBIC GUARANTEE TO EXIM BANK OF INDIA: Japan Bank for International Cooperation (JBIC) has provided a guarantee for the Samurai bonds issued by the Exim Bank of India in the Japanese Bond market. This is the first time that JBIC has provided a guarantee for the Samurai bonds of an Indian Issuer. The guarantee covers the principal and part of the interest of privately placed Samurai bonds aggregating to 20 billion Yen. ICICI BANK GETS SOUND MARK REGISTRATION: ICICI Bank has secured a trademark registration for its corporate jingle, which goes Dhin Chik Dhin Chik. The Trademark registry in India has granted registration to ICICI bank Ltd. for its sound mark by registering the very notes that form the jingle. ICICI Bank is the First Indian Entity to obtain sound mark registration. CBDT-NO IT SCRUTINY ON SR. CITIZENS: The Central Board of Direct Taxes (CBDT) has reviewed its scrutiny selection procedure and said that Senior Citizens and individual pax payers whose gross total income does not exceed Rs.10 Lakh will now not face the hassle of an income tax scrutiny. Senior Citizens and small tax payers filing returns on ITR-I and ITR-II will be subject to scrutiny only if the Income Tax Department is in possession of credible information. NPCI TO CHARGE BANKS FOR MOBILE TRANSACTIONS: The National Payments Corporation of India (NPCI) will charge 10 paise to remitting banks for every mobile transaction on the Inter Bank Mobile Payment service (IMPS) from April1, 2011.The fee was fully waived for the current financial year to promote product. However, banks are free to charge their respective customers according to their policies. AMCs TO ISSUE KYC ACKNOWLEDGEMENTS: CDSL Ventures has asked Asset Management Companies and Point-of-service to mandatorily issue KYC Acknowledgement Letters to investors who have made complete submission of their KYC records, after conducting due preliminary checks. SUNAMI TO COST JAPANESE ECONOMY UP TO $183 BILLION: According to the initial estimates by Barclays Capital, the massive tremor may have cost the debt-ridden Japanese economy up to $183 billion or around 3% of the countrys GDP. Bank of Japan offered to inject a similar amount into the economy. The countrys current debt-to-GDP ratio stands at over 200%. PROPOSAL FOR FDI IN LLPs PUT ON FAST TRACK: Limited Liability Partnerships (LLPs) were allowed in India in April 2009. The LLP Act in India is broadly modeled on UK LLP Act 2000 and Singapore LLP Act 2005.At present no FDI is allowed in LLPs. The current policy allows up to 100% FDI in companies but none in partnerships. So far 4085 LLPs have been registered. Now The Government has fast tracked a proposal to allow foreigners to invest in LLPs. RBI MID-QUARTER MONETARY POLICY REVIEW: RBI has raised the Reverse Repo and Repo Rates by 25 basis points to fight inflation, 8th time in last one year. Repo Rate has been hiked to 6.75% and Reverse Repo rate to 5.75%. Inflation remains dominant concern; year-end target upped to 8% from 7% earlier. PF DEPOSITS TO EARN HIGHER INTEREST RATE: Employees Provident Fund Organisation (EPFO) had been paying 8.5% interest on PF deposits since 2005-06. The Finance Ministry has approved the higher interest rate for deposits for 2010-11. After the approval, the Labour Ministry has notified the 9.5% interest rate. CABINET APPROVES PFRDA BILL: The Union Cabinet has approved the tabling of a revised Pension Fund Regulatory and Development Authority (PFRDA) Bill in the current session of Parliament. The Bill basically seeks to grant statutory status to the Pension Sector Regulator, which currently does not have quasi judicial powers unlike RBI or SEBI. ADB SIGNS LOAN PACT WITH GOVT., IIFCL: The Centre, Asian Development Bank (ADB) and the India Infrastructure Finance Company Ltd.(IIFCL) signed a $250 million loan agreement for trenche-2 of the ongoing second India Infrastructure Project Financing Facility. The $700 million multi-trenche financing facility was approved in 2009 to help IIFCL provide long term funding for infrastructure development, with public-privatepartnership projects getting priority. EASIER NORMS FOR GRANTING MAHARATNA STATUS: The Government has relaxed norms for according Maharatna Status to central Public Sector Enterprises which would lead to many more State-owned companies acquiring this tag. The Maharatna Status
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gives a company more financial autonomy. As per the new guidelines issued by the Department of Public Enterprises, a company qualifying for the Maharatna Status should have an average annual turnover of Rs.20,000 Crore during the last 3 years (Rs.25,000 Crore prescribed earlier). UNION BANK GETS RBI NOD FOR UK SUBSIDIARY: The bank has received RBI approval for setting up a subsidiary in the UK. This will be the First Overseas Subsidiary for the bank. CHINA RAISES RESERVE REQUIREMENTS: China raised Banks Reserve requirements for the third time this year, judging that inflation remains a bigger threat to the Worlds Second Largest Economy than Japans earthquake and nuclear crisis. The requirement will rise to 20% for the nations biggest banks, excluding any extra limits for individual lenders. SHARIAH TAG FOR E-SERIES INSTRUMENTS: To attract the huge pool of investments that generally stays away from financial instruments which give returns not acceptable under Islamic traditions, the National Spot Exchange Ltd. has applied and received certificate from Taqwaa Advisory and Shariah Investments Solutions Private Ltd. (TASIS) for its E-Series products in gold, silver and copper. The Spot Exchange products confirm to Shariah rules as there was no element of interest income and no scope for gambling. SERVICE TAX COLLECTION ON ACCRUAL BASIS: The Centre had, in budget 2011-12, announced a shift in the basis of collection of service tax from receipt basis to an accrual basis with effect from April 1. The Finance Ministrys decision to review this move comes in the wake of representations from many industry associations who have suggested that status quo be maintained and service tax collections be continued on receipt basis. ICICI BANK LAUNCHES ONLINE PERSONAL FINANCE SERVICE: ICICI Bank Ltd. launched an online subscription-based personal finance management solution Money Manager for its customers. The solution is designed to help the Banks customers understand their spending habits and organise their finances by providing them with details of all their ICICI Bank accounts on a single platform. INDIA INKS TAX INFORMATION EXCHANGE PACT: India has signed a tax information exchange agreement (TIEA) with Cayman Islands. This is the Fifth TIEA entered into by India in recent times. India has so far signed TIEA with Bermuda, British Virgin Islands, Bahamas and Isle of Man. BANKING LAWS (AMENDMENT) BILL 2011 INTRODUCED: The Finance Minister has introduced the Banking Laws (Amendment) Bill 2011 in the Parliament that will allow the promoters and shareholders of Private Banks to exercise voting rights in proportion to their shareholding. At present, this right is restricted to 10% of the total voting rights of all the shareholders of a banking company. The Govt. has also proposed to raise the ceiling on voting rights of shareholders of Nationalised Banks from 1% to 10%. NEW FINANCIAL REPORTING FORMAT BY COMPANIES: The companies will have to file Annual returns using XBRL (eXtensible Business Reporting Language), a tool fast emerging as the favoured financial reporting format worldwide. CAPITAL INFUSION IN UBI AND ALLAHABAD BANK: Public Sector Banks, United Bank of India and Allahabad Bank have obtained the approval of their shareholders for capital infusion. In a case of Allahabad Bank, an infusion of Rs.670 Crore will raise the Governments stake from the existing 55.2% to 58%. On an infusion of Rs.308 Crore, the same will increase to 85.5% for the United Bank of India against the existing 84.2%. LEGAL FRAMEWORK FOR FACTORING BUSINESS: A bill on Factoring Business has been introduced which would, for the first time, regulate the factoring business in India, besides enabling the factoring companies to obtain legal remedy and claim their rights on the bills (Invoices) factored by them in a more efficient manner. MINI-RATNA STATUS TO NSIC: The Government has conferred the Mini-Ratna II status to National Small Industries Corporation (NSIC), providing it greater financial autonomy. A Mini-ratna II company can incur capital expenditure on new projects, modernization and purchase of equipment without the Government approval up to Rs.150 Crore or up to 50% of their networth. GOVERNMENT BORROWING CALENDAR: RBI and the Finance Ministry have finalised the borrowing calendar for first half of calendar year 2011-12. The Government will frontload its borrowing to allow space for private sector borrowing in the second half of 2011-12. The overall gross borrowing target of Rs.4.17 Lakh Crore for 2011-12 is lower than the borrowing target of Rs.4.57 Lakh Crore set for 2010-11.
February 2010
PANEL TO ESTIMATE BLACK MONEY CONSTITUTED: The Government has constituted a Multi-disciplinary Committee to get studies conducted to estimate the quantum of black money generated by Indian citizens. Three institutions-National Institute of Public Finance and Policy (NIPEP), National Institute of Finance Management (NIFM) and National Council of Applied Economic research(NCAER)-have been tasked with conducting the studies. IMF RAISES GLOBAL GROWTH FORECAST: International Monetary Fund (IMF) has pegged the Global Growth forecast for the Global economy higher at 4.4% while retaining the projection for India at 8.4% for 2011. IMF, however, cautioned that domestic risks to global recovery remains elevated. In October last year, IMF had pegged the world economic expansion at 4.2%. ADMINISTRATIVE OFFICES OF BANKS IN RURAL: In a bid to encourage banks to expand their branch network in the hinterland, RBI has said that it will grant general permission to domestic scheduled commercial banks (other than RRBs) to open administrative offices and central processing centres (CPC)/ Service Branches in Tier-III to Tier-IV Centres and Rural, Semi-urban and urban centres in the North eastern States and Sikkim, subject to reporting. According to the 2001 census, those centres with a population of up to 49,999 are classified as Tier3 to Tier-6 centres. GOVT. TO DISCLOSE GUARANTEES IN BUDGET PAPERS: The Government will for the first time in the Budget 2011-12 explicitly disclose financial guarantees provided by it to present a clear picture of its financial position. The Government had committed to keeping such guarantees in check by putting a limit of 0.5% of GDP in any financial year in the Fiscal Responsibility and Budget Management Rules, 2004. IRDA RELAXES SOLVENCY NORMS: IRDA has relaxed the solvency norms and would allow a maximum period of 180 days if the solvency margin falls below the stipulated 1.50% on account of delay of receivables from Central/State Government. Till now, IRDA did not differentiate between receivables from the Govt. and Non-Government Bodies for calculating solvency margin while the insurers are facing considerable delays in receivables from Government under various health insurance schemes.
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US ECONOMY ACCELERATES IN 4TH QUARTER OF 2010: For all 2010, US, the Worlds Largest Economy expanded 2.9%, the most in five years, after shrinking 2.6% in 2009. The volume of all goods and services produced rose to $13.38 trillion, for the first time surpassing the pre-recession peak reached in the fourth quarter of 2007. SBI SETS UP CALL CENTRES FOR NPA RECOVERY: SBI, the countrys Largest Lender, has opened two call centres at Gurgaon and Chennai to deal with NPAs and Special Mention Accounts. It has also set up Account Tracking Centres at 14 Local Head Offices. As a step to improve tracking and recovery, the bank has begun assigning SMAs and NPAs to individual staff members. RBI ON MISREPORTING LOANS UNDER PRIORITY SECTOR: RBI has told the banks that the annual financial inspection of books has shown instances of misclassification of loans under priority sector. Such misreported loans in the current financial year would be added to the shortfall reported on the last reporting Friday of the following year for allocation to various funds. RBI PANEL ON SHARING EMPLOYEE FRAUD DETAILS: The Working Group, headed by Mr. G. Gopalakrishna, ED of RBI has suggested that details about employees who have defrauded banks should be shared among banks. Employee awareness is crucial to fraud prevention and training on fraud prevention practices should be provided. EXPORTS, IMPORTS AND TRADE DEFICIT POSITION: The cumulative exports during April 2010-January 2011 grew by 29.45 to $184.6 billion. Total imports during April-January period, grew by 17.65 to $273.6 billion, taking the overall trade deficit to $89 billion. The trade deficit for 2010-11 would only be around $105-110 billion, lower than the initial estimate of $135 billion. EXCHANGE OF LOW DENOMINATION COINS: With the Government of India deciding to withdraw coins of denomination of 25 paise and below, from circulation with effect from June 30, 2011, RBI asked 45 banks maintaining small coin depots to arrange for their face value at their branches. The exchange facility will also be available at all Issue Offices of the RBI. IRDA GUIDELINES ON OUTSOURCING FOR INSURERS: According to the guidelines issued by IRDA, the Insurers will have to deploy only registered agents/ intermediaries for premium collection. Further they will be accountable for the receipts issued by the authorised agents/ intermediaries. IRDA has prohibited insurers from outsourcing Core Activities to safeguard the interests of policy holders. RBI FOR REALTY LOANS WITH ESCROW ACCOUNTS: RBI has asked banks to create an Escrow Account Mechanism to ring fence their loans to real estate firms and ensure better monitoring of end use of funds. The mechanism will help protect the interests of the lenders and ensure timely completion of projects. Besides timely implementation of project, the move would ensure transparency in fund utilisation. RBI ON HOMELOAN PREPAYMENTS PENALTY: RBI has expressed its displeasure with a section of banks leaving high prepayment penalty on foreclosure of housing loans. RBI is also weighing options to tell banks to ease the burden on borrowers willing to prepay the loan fully, as the Competition Commission of India finds such penalty legally valid. BIOMETRIC DATA BASE FOR RURAL JOB SCHEME WORKERS: The Government plans to crate a biometric data base of all workers covered under its flagship Mahatma Gandhi National Rural Employment Guarantee (NREGA) scheme and use it to authenticate work applications, worksite attendance and wage payments. It will substantially reduce instances of discrimination in work allocation, delayed payments and bogus muster-rolls. CHANGE IN GOLD IMPORT NORMS: The Director-General of Foreign Trade has scrapped the clause that made it mandatory for nominated agencies to sell at least 15% of gold imported by them to jewellery exporters. Actually the exporters were not keen on buying gold from nominated agencies as it increased their costs by 1-2% due to fees charged by them. REFINANCE BY BANKS FROM IIFCL: The banks facing persistent liquidity squeeze have contracted to avail themselves of refinance aggregating Rs.3500 Crore from the India Infrastructure Finance Company Ltd. (IIFCL). IIFCL has given refinance aggregating Rs.1500 Crore in the financial year so far. The company had raised Rs.10,000 Crore in fiscal 2009 by issuing tax-free bonds as part of the Governments fiscal stimulus package for providing refinance. IRDA PANEL FOR ELECTRONIC ISSUE OF POLICIES: IRDA has formed a Panel to look into modalities of electronic issue of policies. The Panel will examine various aspects such as mechanism of electronic issue of policies, the legal implications, cost benefit analysis and operational procedures, among others and would submit a report within a month. CLEARANCE OF ACCOUNTING NORMS FOR LOCAL BODIES: The CA Institute has approved 2 separate accounting standards for urban local bodies. The 2 accounting standards relate to presentation of financial statements and inventories. Besides granting approval of these two accounting standards, it gave its in-principle nod for the monitoring of the training undertaken by the Articled Clerks. SUPREME COURT VERSION ON VRS: The management of a bank can deny the request for voluntary retirement under VRS. Supreme Court upheld the discretion of the bank in accepting or rejecting the application under the scheme. The bank can shed staff with inferior qualities, while it can retain officers of superior merit. RESTATING OF ACCOUNT IF AUDITORS ADVERSE NOTE: Listed Companies will have to restate financial accounts if their auditor comes up with auditors comments. A key committee of SEBI has cleared a proposal that seeks to give the Stock Exchanges overrearching authority to call for restatement of a companys financial statements based on any serious audit qualification. BSE WAIVES ALL TRANSACTION CHARGES: Bombay Stock Exchange (BSE) has said in a circular to its members that the transaction charges accruing to BSE, equivalent to annual connectivity costs of the member pertaining to BSE, will be waived off for semi-urban areas from March 1, 2011. The transaction charges will be waived for trading in any segment of BSE. EASY EXIT SCHEME 2011: The Easy Exit Scheme 2011 had been floated by the Ministry of Corporate Affairs. The Scheme under Section 560 of the Companies Act was introduced to allow defunct companies to remove their names from the Registrar of Companies. It was operational from January 1 to January 3, 2011 and has been extended till April 30. Close to 13000 companies have taken recourse to the scheme. CBDT HIKES LIMITS FOR FILING CASES: The Central Board of Direct Taxes (CBDT) has increased the limit for filing cases against taxpayers in High Courts and Supreme Court. For High Courts, the tax effect is Rs.10 Lakh against Rs.4 lakh previously. For Supreme Court, it is Rs.25 Lakh against Rs.10 Lakh. Appeals against taxpayers can be filed before Income Tax Appellate Tribunal (ITAT) only when the tax effect is Rs.3 Lakh and above. The earlier limit was Rs.2 lakh. CABINET APPROVES FUNDS INFUSION IN RRBs: The Union Cabinet has approved the recapitalization of Regional Rural Banks (RRBs) to strengthen their balance sheets. The Centre will release Rs.1100 Crore subject to bringing in proportionate shares by the
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State Government and Sponsor Banks. The Cabinet has also approved an additional amount of Rs.700 Crore as contingency fund to meet the requirement of the weak RRBs. GOVT. WORKING ON FINANCIAL INCLUSION: The Finance Minister, Mr. Pranab Mukharjee has said that the banking services would be rolled out in 20,000 unbanked villages with a population of over 2000 by the end of this fiscal as part of the Governments overall efforts to improve financial inclusion in the country. The Government has targeted to cover at least 73,000 new habitations with a population of 2000 and above and open at least 5 Crore new accounts by March 2012 under the Swabhiman campaign. HEALTH INSURANCE PORTABILITY FROM JULY 1: IRDA has said that if an Insurer prefers to accept policies belonging to another insurer, it should provide the policyholder at least the same cover he/she enjoyed in the previous policy. The portability of health cover makes a positive impact on a customer as the cover against pre-existing diseases would now become mandatory. As of now, this is not being extended in case of discontinuation/change over to a new Insurance Company. IRDA RELEASES NORMS FOR MERGER: More than 10 years after opening of the Insurance Sector, IRDA has proposed to allow mergers and acquisitions in the General Insurance Business that requires consolidation among the 24 industry players, most of which are loss-making. To protect the interest of policyholders, they must be given right to exit from the insurer, which is on the block for acquisition. FDI INFLOW POSITION DURING APRIL-DEC 2010: Snapping two month of declining trend, Foreign Direct investment (FDI) in India increased 30.69% to $2 billion in December 2010. However during April-Dec 2010 period, FDI declined 23.14% to $16.03 billion over the year-ago period. India had received $20.92 billion in FDI during the same period of the previous financial year 2009-10. SUPREME COURT VERSION ON BORRWER FOR DRT: The Supreme Court has ruled that a borrower and his guarantors who have been served with a notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act has a remedy under the Act for the Tribunal and should not rush to the High Court. SUPREME COURT RULING ON DIRECTOR OF FIRM: The Supreme Court has ruled that a director of a company should not be dragged to Criminal Court when documents prove he was not responsible for issuing cheques which were dishonoured. PANEL FOR DIRECT TRANSFER OF SUBSIDIES: The Centre has constituted a Task force under the Chairmanship of Mr. Nandan Nilekani, to evolve a suitable mechanism for providing direct subsidies to individuals/ families that are entitled to kerosene, LPG and fertilizers. Mr. Nilekani is the Chairman of the Unique Identification Authority of India (UIDAI). The Task Force has been mandated to evolve a modal of direct transfer of subsidies on these items by re-engineering existing systems, processes and procedures in the implementation process. SEBI TAKES E-ROUTE TO TACKLE GRIEVANCES: SEBI is putting in place a Web-based Centralised System for speedy redressal of investors grievances. SEBIs existing investor grievance redressal mechanism lacks a centralized database and the resolution of the complaints often gets delayed due to physical movement of files from one desk to another across its various offices. RBI CAUTIOUS ON FICTITIOUS OFFERS FOR MONEY: RBI has cautioned the members of public against responding in any manner to offers of money, such as lottery winnings/ remittance of cheap funds in foreign currency from abroad by so-called foreign entities/ individuals from abroad. RBI has also advised the public to immediately register a complaint with the local police/ Cyber Crime Authorities when they receive such offers or become a victim of any such fraud. SEBI FOR NEW REPORTING SYSTEM FOR MUTUAL FUNDS: SEBI has proposed a new reporting system for mutual funds based on XBRL technology- a globally accepted standardised business reporting tool that enables easy dissection of bulk documents without delay. SEBI has issued a draft structure of the proposed XBRL (eXtensible Business Reporting Language) system for all the regulatory filings to be made by mutual funds. GOVTS INFUSION OF CAPITAL IN PSU BANKS: The Government has approved capital infusion in 10 Public Sector Banks by way of preferential equity allotment. As of March 2010, the capital adequacy ratio of public sector banks was 13.3%, far below the 17.4% of private sector banks. By September 2010, public sector banks managed to maintain their capital adequacy at similar levels due to capital infusion. However, the core capital continued to be low at 8%. DUTY CREDIT UNDER MLFPS AND FPS : The Government had announced the fiscal benefits worth an estimated Rs.500 Crore on February 11, 2011 under the Market Linked Focus Product Scheme (MLFPS) and Focus Product Scheme (FPS) for exporters of select products to countries to help them cope with the uneven global recovery. DGFT has issued a notification stating that the exporters can avail the benefits on their shipments with effect from January 1, 2011. Under the MLFPS Scheme, the exporters get duty credit of 3% on the value of their consignments, while under the FPS, the exporters avail duty credit of 5%. SUPREME COURT ON PSUs MOVING AGAINST GOVT.: The Supreme Court has held that PSUs need not get approval from the Centre anymore to pursue litigation against the Government or any other State-run company in courts. NEW CONSUMER PRICE INDEX LAUNCHED: The Government has launched the new Consumer Price Index on 18th February that combines data from rural and urban areas and includes sectors that were not part of the existing consumer inflation measure. The Index, which uses calendar year 2010as the base with a starting value of 100, showed a combined reading of 106 for the month of January 2011. BASEL-III NORMS TO BE FUULY IMPLEMENTED: G-20 Finance Ministers have agreed to implement fully the BASEL-III Norms within the agreed timeline. Also, the Financial Stability Boards (FSB) recommendations on Over-the-counter (OTC) derivatives and on reducing reliance on credit rating agencies ratings will now be implemented in an internationally consistent and non-discriminatory way. SUPREME COURT VERSION ON BOUNCED CHEQUE: The Supreme Court has ruled in a bounced cheque that a person convicted for issuing the instrument can not be prosecuted again on the charge of cheating about the same cheque. SUPREME COURT RULING ON COMPENSATION: Supreme Court has stated that in case of compensation for the accidental death of a person who is yet to retire from his job, the future salary increments and pension benefits should be computed to arrive at the final award. PMS PANEL FOR TIGHTER POLICY REGIME: The Economic Advisory Council to the Prime Minister (PMEAC) projected the Economy to grow at 8.6% in 2010-11 and 9% in 2011-12. It also said that monetary and fiscal policies have to be appropriately tightened to protect the economy from inflation. Centres Fiscal Deficit has been projected in 2010-11 at 5.2% of the GDP, down from 5.5% estimated earlier. Inflation rate is projected at 7% by March 2011. RBI-ONLINE FOREX TRADING ILLEGAL: RBI has clarified that foreign exchange trading in domestic or overseas markets through electronic or online portals is illegal except trading in currency futures or currency options provided by bourses recognised by SEBI
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under the Foreign Exchange Management Act. RBI has asked Resident Indians to refrain form remitting or depositing money in any such schemes offered by online portals. SBI-CARBON DISCLOSURE PROJECT: SBI became the signatory investor to the Carbon Disclosure Project (CDP), a collaboration of over 550 global institutional investors with assets under management to the tune of $71 trillion. CDP is an independent non-profit organisation, holding the largest database of primary corporate climate change information in the world. GOVT. SETS EXPORT TARGET: The Commerce Ministry has released a draft strategy paper to double goods exports to $450 billion by 2013-14. Simultaneously, it also seeks to rein in import growth through domestic policy changes aimed at reducing import dependence by increasing domestic output. RBI PUTS MINUTES OF ADVISORY COMMITTEE FIRST TIME: As part of its measures to enhance transparency, RBI published the minutes of its technical Advisory Committee meeting for the first time. The Committee is an advisory body on monetary policy. Its members are mainly Deputy Governors and Executive Directors of RBI, and a couple of economists from outside. Being an advisory body, its recommendations are in no way binding on the RBI. RBI DEFERRED ENFORCING PAY NORMS: RBI has deferred the implementation of guidelines on compensation for Whole-time directors/ Chief Executive Officers/ Risk Takers and Control Function Staff of Private Sector Banks and Foreign Banks operating in India by a year, to 2012-13. RBI would issue the final guidelines on compensation after the publication of the Final Paper by the Basel Committee on Banking Supervision (BCBS). RBI RAISES RED FLAG ON HOT MONEY: RBI's Financial Stability and Development Council has stated that a deficit in the current account is an indication of excessive domestic demand that is being financed through external sources. A current account deficit by itself is not viewed as a vulnerable indicator. Worrying factor is that the deficit-estimated to top 3% of the GDP in 2010-11-is being largely financed by short term capital flows that are volatile.
January 2010
RBI ON BASE RATE METHODOLOGY CHANGE: RBI has allowed banks six more months time, up to June-end 2011, to change the benchmark and methodology used in the computation of base rate. This move is aimed at helping banks stabilise the system of base rate calculation. Banks have been following the Base-Rate-linked credit pricing system since July 1, 2010. Banks can not lend below this rate, which currently ranges form 8 to 9.5%. RBI INSTRUCTIONS ON ATMs: RBI has asked banks to allow only one transaction at ATMs for one entry of PIN (Personal Identification Number which acts like a Password for ATM transactions) to check misuse of ATM cards by unauthorised people. Previously, customers were allowed to conduct multiple transactions through the ATM by punching in their PIN only once in a single session. NABARD SETS ASIDE RS.100 CRORE FOR VCF: NABARD has earmarked Rs.100 Crore to be lent to venture capital Funds, which have a mandate to invests in such companies. The Bank has decided to make contributions to professionally managed Venture Capital Funds (VCFs) having exposure to agriculture and rural sectors. This is for the first time that NABARD would be investing in an outside venture capital fund. The Bank has its own VCF scheme for development of diary and poultry. RBI NEW GUIDELINES FOR CREDIT CARD USERS: According to the RBI guidelines, all banks will mandatorily decline any telephonic banking transaction, including the automated IVR (Interactive Voice Response) services where the customers do not have a One-Time Password (OTP) for such services form January 2011 onwards. The OTP will be valid for a single use and would remain in effect for a period of two hours. The new step has been taken as a safeguard against credit card frauds. TIGHTER NORMS FOR HFCs LENDING: The National Housing Bank (NHB) has mandated that housing finance firms have to maintain a provision of 0.4% of the total outstanding loans by September 2011. Further the new norms also limit the amount a person could borrow against property to 90%where the value of the property is less than Rs.20 Lakh. There was earlier no limit on such loans. BSE LAUNCHES SHARIAH COMPLIANT INDEX: The Bombay stock Exchange (BSE) along with Taqwaa Advisory and Shariah Investment Solutions (TASIS) launched a Shariah Compliant Index in an effort to attract more investors from India and abroad. The Index allows investors to buy stocks without violating Islamic Investment guidelines. GOVT MULLS NEW IIP, WPI SERIES: The Centre is planning a Thick National Sample Survey (NSS) round for 2011-12, which could be the precursor for a new Index of Industrial Production (IIP) as well as Wholesale Price Index (WPI) series with 2011-12 as base year. The move comes even as the Central Statistical Organisation is yet to release a revised IIP with 2004-05 as base, to replace the existing 1993-94 series. JAPAN INDUSTRIAL OUTPUT RISES: Japanese industrial output rose for the first time in six months in November and manufacturers expect to boost production in coming months, suggesting that firm demand in Asia will help the economy resume a recovery early next year. Manufacturers surveyed by the Ministry expect output to rise 3.4% in December and 3.7% in January. RBIS NEW GUIDELINES FOR FOREX DERIVATIVES: According to the revised guidelines RBI has said that the embedded cross currency options will be allowed in case of foreign currency-rupee swaps and the use of cost reduction structures will be permitted, both under the contracted exposures and past performance routes, subject to certain safeguards. This is a relaxation as now traders who have exposure on other cross currencies, can book forward contracts in those currencies, not just US Dollar. ANOTHER INDEX FOR RECORDING PRICE MOVEMENT: India will have another gauge of price changes, the Producer Price Index (PPI), completing the bouquet of indices needed for a holistic picture of inflation in the economy. The Ministry of Industry has set up an internal committee to prepare a framework for the new index. The PPI would help in looking at the margins. EXPOSURE NORMS FOR INFRA LENDING: RBI has said in the second Financial Stability Report that, given the regulatory aim to minimise the build up of excessive concentration risks and the fact that infrastructure financing add to asset-liability mismatches, any further relaxation in the exposure norms may not be warranted. In fact, the current exposure norms for infrastructure financing in India are way above the international norms. RELIANCE ON CREDIT-RATING AGENCIES: RBI has said that the Regulators would need to work towards further strengthening the rating framework. The system needs to shift away from issue-rating to issuer rating. The rating assigned to a particular instrument can not be taken as reflective of the credit risk of the issuing entity. Though the reliance on credit rating agencies can not be stopped overnight, banks should carry out their own assessments.
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FINANCE COUNCIL MEETING FIRST TIME: The newly set up Financial Stability and Development Council (FSDC), which met for the first time, was chaired by the Finance Minister, Mr. Pranab Mukharjee. The Council assessed the state of the Indian economy and also the signs of economic recovery in the West. It also concluded that the Indian economy is not only sustaining its present growth levels, but also attaining the double digit growth in the coming years. CABINET NOD FOR BANKS EXPORT CREDIT CLAIMS: The Cabinet Committee on Economic Affairs (CCEA) has given its approval for an additional spend of Rs.996 Crore towards the meeting the pending interest subvention claims of banks. This amount will now be provided for in the upcoming Budget. The measure will mitigate the effects of global meltdown across labour-intensive export sectors and help them be internationally competitive and achieve export targets. SEBI ISSUES GUIDELINES FOR TRADING ON SME EXCHANGES: SEBI has made Market Making mandatory in respect of all scrips listed and traded on SME Exchanges. Market Makers are entities that provide liquidity on exchanges by providing bid and offer prices for all scrips for most part of the trading day. SEBI has issued Master Circular on its framework for setting up both new exchanges and separate platforms of existing exchanges having nationwide terminals for SMEs. FDI PROPOSALS CLEARANCE POSITION 2010: The Foreign Investment promotion board (FIPB), recommended the FDI proposals entailing foreign direct investment (FDI) inflow of Rs.23, 700 Crore for approval by the Finance Minister/ the cabinet committee on economic affairs. It received 387 proposals of which 212 proposals with inflow of around Rs.23,700 Crore were recommended for approval, while 77 proposals were rejected. FISCAL DEFICIT DOWN-APRIL-NOV: The Governments Fiscal deficit fell 39.08% to Rs.1, 86, 522 Crore in April-Nov 2010, as compared to Rs.3, 06, 221 Crore in the same period last year. The fall in deficit can mainly be attributed to the Rs.1,06,000 Crore revenue from the sale of spectrum for high speed telephony and broadband services. Tax collections, both direct and indirect, have also remained buoyant this year. RBI FOR UNBANKED VILLAGES AS MODAL VILLAGES: Having already adopted 75 unbanked villages in the country to be developed as Model Villages, RBI is planning to adopt as many villages as possible. RBI has already told banks they must provide basic banking services in all villages with a population of 2000 and more by March 2012. EXTERNAL DEBT EXCEEDS FOREX RESERVES: After a gap of 7 years, Indias Foreign exchange Reserves slipped below its total External Debt during the quarter ended September 2010. At the end of September, Indias external debt stood at $295.85 billion, exceeding the countrys forex reserves by about 3 billion. India was one of the few economies besides China, Russia, Malaysia and Thailand, which had been maintaining more forex reserves than total external debt. MORE BANKS ALLOWED TO IMPORT GOLD: RBI has allowed 7 more banks to import gold and silver. India, which hardly mines any gold on its own, imported 624 tonnes of the yellow metal in the first 3 quarters of 2010, up 120% year-on-year. This has taken the total number of banks that can ship yellow metals into the country to 30, raising the prospect of better competition and helping supplies. Banks contribute 80% of the 700 tonnes that India annually imports. SEBI GUIDELINES ON MERCHANT BANKERS: SEBI has said that the Merchant Bankers can not refer clients for alternate investments beyond securities market, such as corporate deposits and real estate. Merchant bankers act as intermediaries between entities seeking to raise capital through sale of securities and the purchasers of these securities. Referring clients to entities providing alternative investment services beyond securities market dont fall under the permitted businesses for merchant bankers. RURAL JOB SCHEME WAGES HIKE: The wage rates for workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have been increased. According to the rates revised by the Ministry of Rural Development with effect from January 1,2011, the MNREGA wages will go up by 17-30%.The move is likely to benefit more than five Crore beneficiaries under MGNREGA across the country. WORLDS FIRST ART EXCHANGE OPENED: The worlds first Art Exchange will be launched by Paris-based A&F Markets, offering an opportunity for individuals and institutions to buy and sell shares of famous artworks. It will be located in Paris. People from across the world, including India, will be able to invest. The market will be open to all countries. NET DIRECT TAX COLLECTIONS POSITION: The Centres Direct Tax collections registered 19.47% increase to Rs.2, 98,958 Crore for the period April-December 2010. With this collection level, the Centre has achieved 69.53% of the budgeted target of Rs.4.3 Lakh Crore for 2010-11. SEBI GUIDELINES ON VENTURE CAPITAL FUNDS: SEBI has mandated that Foreign Venture Capital funds would have to furnish commitment letters from their investors of an amount aggregating to at least a million dollars. In additions, VC Funds have to provide details of financial statements, their names, addresses, contact numbers and the e-mail addresses of their directors and investors who have given commitment letters. EXPORTS, IMPORTS AND TRADE DEFICIT POSITION: Exports during April-December 2010 recorded a 29.5% growth to $164.7 billion. Imports during the same period grew 19% to $247.1 billion, leading to a Trade Deficit of only $82.4 billion. RBI ON BANK BRANCH AUDITS: RBI is contemplating doing away with the branch audit system for banks that have opted for Core Banking Solutions. Deliberations are being held within the Banking Division of the Finance Ministry and in RBI to replace the Branch Audits with a Centralised Auditing System at such banks. A BANK BRANCH WITHOUT LOCK ON FRONT DOOR: Shani Shingnapur, the temple town in Maharashtra where houses have neither doors nor locks, now has its First Commercial Branch- with no locks on its front door. The Public Sector UCO Bank is the First to throw open the doors of commercial Banking to this unique town of 3000 people. GOVT. MANDATES RETIREMENT FUNDS TO TRADE: The Government has asked all retirement Funds to compulsorily trade in debt instruments on the Exchanges. The dictat aims at shifting some of the biggest bond buyers from an opaque market where deals are cut over the telephone to a more transparent one. Such one-to-one transactions often hamper liquidity, transparency and price discovery in the secondary bond market. SEBI CLEARS DERIVATIVES ON FOREIGN INDICES: SEBI has given go ahead for the introduction of index derivatives on foreign indices in India. SEBI said that the stock exchanges could henceforth introduce index derivatives on a foreign index denominated in Indian rupees. Trading in these derivatives is restricted to Indian Nationals. INDUSTRIAL GROWTH POSITION; Industrial growth has plummeted to an 18 month low of 2.7% in November. The lower yearon-year rise in the official Index of Industrial Production (IIP) in November compared with 11.3% for the same month of last fiscal.
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For April-November period as a whole, industrial growth averaged 9.5%, which was better than the 7.4% for the first eight months of 2009-10. CHINA LAUNCHES YUAN TRADING IN US: China has launched Yuan trading in New York as part of efforts to make its currency Fully Convertible and a Global Competitor to the Dollar. State-controlled Bank of China is allowing customers to trade in the Yuan, also known as the Renminbi. China had commenced trading in the Yuan in Hong Kong last year. BANKS NEED TO LOWER INFRASTRUCTURE: Dr. Subir Gokaran, Dy. Governor RBI said that the increased exposure of Indian Banks to infrastructure is not good due to the asset-liability mismatches. As per RBI data, bank credit to infrastructure sector stood at Rs.4, 69, 621 Crore as on Sept. 24,2010. During April-Sept. 2010 period, banks lent Rs.87,499 Crore to infrastructure, as against Rs.48,659 Crore in the corresponding period . WORLD BANK CAUTIONS AGAINST FISCAL SLIPPAGE: The World Bank has cautioned India and countries in South Asia against risks of fiscal slippages as the task of ongoing fiscal consolidation is complicated by the desire to maintain the pace of growth-enhancing infrastructure investments. South Asia has the largest fiscal deficit among developing countries with the regionwide deficit at 8.2% of GDP in 2010. Indias fiscal deficit as a share of its GDP was 9.6% EURO ZONE ECONOMIC INDEX UP: Leading Economic Index (LEI) for the Euro Zone rose 0.7% to 114.3 in November 2010, a sharper rise from Octobers 0.3% and one that points to continued economic recovery. The Index, which indicates economic development up to six months ahead, aggregates eight economic indicators that measure activity in the Euro area as a whole. BASEL SETS CAPITAL RULES FOR DEBT SECURITIES: Basel Committee on Banking Supervision said that National regulators should ensure such securities took losses to support a lender on the brink of failure before public money was used. Global Regulators said that debt securities of banks must be capable of being written off or converted into common stock in a crisis if they were to count towards a lenders capital. CHINA RAISES RESERVE RATIO: Chinas Central Bank has raised the Reserve Ratio for the seventh time in a year, in its latest move to counter inflation. The Central Bank ordered State-owned banks to set aside an additional 0.5% of deposits as reserves effective January 20. Reserves vary by institution but could be close to 20% for the biggest commercial lenders. HONG KONG WORLDS FREEST ECONOMY: Hong Kong was rated the Worlds Freest Economy for a 17th straight year in a ranking by the US based Heritage Foundation, above rivals Singapore and Australia for the title. Hong Kong, one of the worlds most competitive financial and business centres, demonstrated a high degree of resilience during the financial crisis. Freedom in trade and finance was the biggest boost to Hong Kongs ranking. RBI MODIFIES PROVISIONING NORM FOR NBFCs: RBI has asked all NBFCs to make a provision of 0.25% on Standard assets. Till now NBFCs had to make provisions only for non-performing assets. NBFCs have also been allowed to include the provision on standard assets in Tier-II capital. This provision along with other general provisions and loss reserves will be admitted as Tier-II capital only up to a maximum of 1.25% of the total risk-weighted assets. SEBI NOTIFICATION ON ODI AND PN: SEBI has strengthened the reporting process related to Offshore Derivative Instrument (ODI) and Participatory Note (PN) activity. SEBI has notified the FIIs issuing ODI and PN that they are required to provide trade-wise details of their activities in India by the 10th of every month with a six month lag (April data by October 10). FIIs are also expected to provide a monthly scrip wise PN/ODI activity summary by the seventh of next month. These reports have to be submitted by FIIs from April 11. FMC ON PAID UP CAPITAL DEADLINE: The Forward Markets Commission (FMC) is unlikely to extend the March 2011 deadline to raise minimum capital requirement to Rs.50 Crore and Rs.100 Crore for existing and new National Commodity Exchanges. Currently there are 5 such Exchanges, three old Exchanges are-Mumbai-based MCX and NCDEX and Ahemdabad-based NMCE. 2 new exchanges are ICEX, originally promoted by India Bulls and Kotak promoted ACE Derivatives Exchange. COMPULSORY LEAVE FOR SBI STAFF: SBI has told all its officers to take compulsory Preventive Vigilance leave for at least 10 days every financial year. While reviewing high-value frauds, High Powered Committee of SBI Board found that the frauds came to light only when employees went for training or took leave for some other reason. Public Sector Banks are strengthening their internal processes and reporting systems to counter fraud, and some of them may introduce a policy of compulsory leave. RBI ALLOWS RESTRUCTURING OF UNSECURED LOANS: RBI has allowed banks to restructure loans given to Microfinance Institutions, even if they are not secured. Banks were not allowed to restructure loans that were not backed by tangible assets. But to ensure that microfinance institutions do not face a credit crunch, RBI has allowed banks to restructure the unsecured loans extended to MFIs. EMERGING ECONOMIES GET MORE FDI FIRST TIME: According to the Report by the UN Conference on Trade and Development, Developing and Transition economies, for the first time, absorbed more than half of global foreign direct investment flows of about $1,122 billion in 2010. While FDI has picked up in countries like Singapore, Hong-Kong, China, Indonesia, Malaysia and Vietnam, there has been a decline of 14% in South Asia. ADVISORY PANEL ON ACCOUNTING STANDARDS: The Centre has reconstituted the National Advisory Committee on Accounting Standards (NACAS), a panel whose advice forms the basis for deciding the accounting standards and policies to be followed by companies. NACAS will be headed by Mr. M.M.Chitale. UNIQUE CODE NUMBER TO CAs TO CHECK FRAUD: The Institute of Chartered Accountants of India will introduce unique code numbers (UCD) for Chartered Accountants (CAs) to help them check increasing incidents of fraudulent practices, including forged attestations. Once introduced, ICAI would ask banks on UCD, as people file different balance sheets for various purposes without the knowledge or approval of CAs.
December 2010
SEBI PANEL TOUGH ON ENTRY OF NEW STOCK EXCHANGES: The Bimal Jalan Committee is not in favour of listing stock exchanges. It is also against trading members being on the board of bourses but favours FII participation up to 23% stake in exchanges. The Committee also said that dispersed ownership is vital for the 'well functioning' of stock exchanges. It said only well capitalised public finance institutions and banks having a threshold networth of Rs.1,000 cr should be allowed to be anchor investors in a stock exchanges.
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SBI RAISES LARGEST EURO DENOMINATED BOND ISSUE: SBI has raised 750 million through a five year bond, the largest ever Euro denominated Bond issue by an Indian Company. The senior unsecured bond maturing on November 30, 2015, will offer a fixed annual coupon of 4.5%. This is the Single Largest Issuance by the bank. NORMS ISSUED FOR VARIABLE INSURANCE PRODUCTS: IRDA has issued guidelines on Variable Insurance Products (VIP). According to the guidelines, universal life products shall be known as Variable Insurance Products. All VIP shall be offered only under the Non-unit Linked Platform and shall not be permitted on Unit-linked platform. NABARD RAISES INTEREST RATES: Long term finance to farmers through Cooperative and RRBs has turned costly with the NABARD raising interest rate on refinance by 50 basis points. With the revision, the interest rate of refinance is now pegged at 8.25% an year, for the cooperative and 8.75% for commercial banks. The interest rate has been revised upward in the wake of monetary policy review by RBI this month. RBI FIAT TO SECURITISATION COMPANIES: RBI has asked Securitisation Companies to ensure that the information provided by them to credit information companies is accurate and complete. It has also directed these credit information companies to ensure that the data collected by them are up to date. SMS-BASED GRIEVANCE REDRESS SYSTEM: SBI will be launching SMS-based complaint redressal system in all its 14 Regional Circles. The customers of SBI across the country will be able to resolve most of their complaints within 48 hours. The trial run of the system has also been completed in many circles. Under the system, the aggrieved customers can send Unhappy as SMS to a number to be provided from their registered mobile number. PANEL FOR REVAMPED NORMS FOR FUNDING SC/ST SCHEMES: A Plan Panel Task Force recommended overhauling the guidelines for ensuring fool proof allocation of funds by Central Ministries for Scheduled Casts and Scheduled Tribes Welfare Schemes. At present, all ministries are mandated to earmark 16.2% and 8.2% of their plan expenditure for SC and ST sub plans, respectively. GOVT. PLAN FOR FDI IN BANKS: Govt. does not propose to increase Foreign Direct Investment limit in the Banking Sector, which is capped at 74% in Private Sector Banks. In the case of Public Sector Banks, the limit is 20%. EXEMPTION OF ENTITIES FROM DISCLOSRE NORMS: The Supreme Court has ruled that companies seeking exemption from disclosure norms before tapping the capital market can only do so with the consent of the Market Regulator, SEBI under the SEBI Act. The Tribunal is not allowed to permit investors to deviate from the disclosure and Investor Protection (DIP) guidelines. RBI ASKS BANKS TO FUND SELF-HELP GROUPS DIRECTLY: RBI has said that both public and private sector banks were too lethargic in financing and refinancing Self-Help groups, which has led to Micro Finance Institutions taking advantage and becoming aggressive lenders at high rate of interest. RBI has said that with active help from NABARD, Central and State Agencies, public and private sector banks should aggressively fund SHGs projects directly instead of present practice of using MFIs as middlemen. IIFCL TO COME UNDER REGULATRY SCANNER: IIFCL was set up in 2006 as a wholly-owned Govt. Company to boost lending to the Infrastructure sector. There was no regulatory oversight on the company, apart from some prudential norms. It was supervised by a committee in the finance ministry, creating apprehensions that the large unregulated financial institution could create a systemic risk. The Government plans to bring the company under the regulatory oversight of the RBI. GOVT. TIGHTENS PF NORMS FOR OVERSEAS WORKERS: Indian Government has tightened norms for withdrawal of provident fund by overseas workers employed in the country, prohibiting them from taking back this money until they are 58 years old or are incapacitated. The norms have been tightened for those countries that dont have social security agreements (SSA) with India and the move may prompt them to go in for such pacts. RBI CAUTION ON DEPOSIT WITH UNAUTORISED NBFCs: RBI has issued a cautionary note warning the public not to deposit money with unauthorised Non-banking Finance Companies (NBFCs). RBI has put up a list of NBFCs that are permitted to accept deposits on its Website. No NBFC outside of this list can accept deposits from the public. Doing so is clearly fraudulent and has to be investigated by the law enforcement agencies in the normal course. INDIAN ECONOMY-GDP GROWTH; The Indian Economy has registered an annual growth of 8.9% for the quarter ended September 30 (8.7% for the same quarter of the previous year). CAPITAL INFUSION IN PUBLIC SECTOR BANKS: The Govt. has approved capital infusion of Rs.6000 Crore into 10 Public Sector Banks, which is over and above Rs.15, 000 cr already provided to the banks in the 2010-11 Budget. The fresh funds would help all State-held lenders meet Tier-I CRAR at 7%. The move would also effectively increase the Central Governments shareholding in all PSBs to at least 58%. EXPORTS, IMPORTS AND TRADE DEFICIT POSITION: For April-Nov 2010 period, Exports have grown by 26.7% to $140.3 billion while Imports clocked $222.2 billion, expanding 24%. The Trade Balance works out to $81.7 billion. CONSENSUS ON BASEL-III RULES ON GLOBAL STANDARDS: The Basel Committee on Banking Supervision has agreed on the details of the Basel-III rules text covering global regulatory standards on capital adequacy and liquidity which would be published by the year end. Referring to the details of the Basel-III rules text, the committee said the liquidity coverage ratio and the net stable funding ratio would be subject to an observation period and would include a review clause to address any unintended consequences. UNCLAIMED DEPOSITS IN BANK ACCOUNTS: The Govt. and RBI are considering a proposal to set up a Depositor Education and Awareness Fund using the money lying in unclaimed deposit accounts, which have not been operated for 10 years or more. As on December 31, 2009, there are 10,171,368 such accounts with a total amount of Rs.1,360.32 cr. The fund is proposed to be utilised for promotion of the interests of depositors and for such other purposes specified by RBI. SINGLE WINDOW PLATFORM FOR IT CALCULATION: The Finance Minister has inaugurated the countrys 1st Sarvottam Centre (which is a special single window platform) that will help dispel doubts of people over their income tax computations. The new Direct Taxes Code (DTC), which is currently being scrutinized by a parliamentary committee, would simplify the income tax structure, thereby making it easy for the common men. PAN MANDATORY FOR ALL MUTUAL FUND INVESTMENTS: All mutual fund investors, new as well as existing, will need to mandatorily furnish their PAN (Permanent Account Number) details from the next year irrespective of the size of their investment. Currently, individual investors need to quote PAN only for investments of Rs.50,000 or more, although non-individual investors are required to quote their PAN for all amounts. NIAI TO BECOME STATUTORY BODY: The National Identification Authority of India, constituted in Jan 2009 is functioning as an executive body under the Planning Commission. It is expected to issue the identification numbers to citizens and may require
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statutory powers for issues like security and confidentiality of information, impersonation and unauthorised access to data. A bill to grant statutory powers to NIAI has been introduced in Rajya Sabha. CLEAN CHIT TO BANKS BY CCI ON FORECLOSURE PENALTY: In the first major judgement by the Competition Commission of India (CCI) on the Home Loan Cartel case, it has ruled that that there is a vibrant and competitive market for retail home loans with consistent and innovative growth and it can not therefore be inferred that the practice of prepayment charges has caused an appreciable adverse effect on competition in India, in any way. EPFO TO INVEST MORE IN PUBLIC SECTOR BONDS: The Central Board of Trustees has decided that to get higher returns, Employees Provident Fund Organisation (EPFO) can park a larger portion of its Rs.3.5 lakh cr corpus in Public Sector Corporate Bonds. EPFO can now invest up to 50% of the networth of a Public Sector Undertaking (PSU) with AAA rating and 40% of a PSU with AA rating. The investment limit in Public Sector Banks with AA= and AA rating has also been raised from 45 to 50% of their networth. SMART ORDER ROUTING SYSTEM BY SEBI: SEBI has introduced modifications in its circular on smart order routing issued on Aug 27. Smart Order Routing System allows traders and other investors to automatically pick the exchange best placed for orders at the time of execution. For new clients, the broker is expected to sign a new broker client agreement while an addendum would serve the same purpose. BANKS TOLD TO CAP CASH DEPOSIT CHARGES: RBI has told banks not to charge more than Rs.5 for any cash deposit made at a non-home branch (other than the one where the customer has the account). In 2008, RBI said the charge for a transaction under the NEFT up to Rs.1 Lakh should not exceed Rs.5. Now the Regulator says cash deposit charges should be in line with NEFT charges. SEBI-MF FEE TO BE LINKED WITH ITS PERFORMANCE: SEBI is considering a proposal under which fund management fees charged by mutual funds will be linked to the performance of a scheme. Currently, fund houses can charge a maximum of 1.75% as money management fee for equity schemes, irrespective of how the scheme fare. PNB COMPLETES MAJORITY STAKE BUY IN KAZAKH BANK: Punjab National Bank has announced the completion of acquisition of 63.64% stake in JSC Dana Bank of Kazakhistan. This acquisition will give PNB an operational presence in Kazakhistan, which is the Largest Economy in Central Asia. US BANKING REGULATORS ON CAPITAL STANDARDS: US Banking Regulators approved a proposal that starts the process of setting minimum capital requirements for banks. The law requires regulators to set standards for a capital floor that in practice would require bank holding companies to meet the same minimum capital requirements that apply to their federally insured depository institutions. INDIA GETS MEMBERSHIP OF EURASIAN GROUP: India has gained membership of the Eurasian Group, which is a financial Action Task Force-styled Regional Body, responsible for enforcing Global Standards on Anti-Money Laundering (AML) and combating the financing of terrorism. India is the 9th member of the Group. The Group also has 16 nations and 15 organisations as observers. NEW GUIDELINES FOR TRADE CREDIT INSURANCE: IRDA has said in the new guidelines that the Insurers will now have to assess credit risk of buyers who contribute more than 2% of the total turnover while selling trade credit insurance. A trade credit insurance policy could be sold to a seller on a total turnover basis. JAPAN CUTS CORPORATE TAX: Japans Cabinet approved cutting the corporate tax by 5 percentage points in a bid to spur the countrys sluggish economy. The corporate tax cut first time in 12 years, is among tax reforms approved by the cabinet and will require parliamentary approval. Japans corporate tax rate now stands at 40%. Companies have long urged the Government to slash the rate, which is higher than the global average of 25% to 30%. SEBI ON SHAREHOLDING PATTERN DISCLOSURE: SEBI has made certain amendments to the equity listing agreement of publicly listed companies. A company, after a public issue, will have to make public details of its shareholding a day prior to its listing. Further any listed company whose capital restructuring makes a change of more than 2% to its Paid Up Share Capital, will have to file its revised shareholding with the stock exchanges within 10 days from the date of allotment of the shares that constituted the restructuring. UK CLEARING HOUSE FOR CHEAPER LOANS TO JEWELLERS: Bombay Bullion Association and London-based Independent Clearing House LCH Clearnet Group are taking initiative for cheaper loans to Jewellers. Typically, a jeweler can stock his gold inventory in the vaults of LCH Clearnet to be hired or set up in India and avail himself of loans at LIBOR plus 1 or 2%. This may translate into 5 or 6% in India. Presently banks charge about 10-14% on loans against gold. DEFINITION OF FINANCIAL INCLUSION : Financial Inclusion has been defined by Dr. C. Rangarajan Committee as the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low income groups, at an affordable cost, in a fair and transparent manner by main stream institutional players. Banks are required by the government to put in place a mechanism to conduct audit of new financial inclusion accounts. Random monitoring of implementation of FIPs by Senior Bank Officers has also made mandatory. GOVT. ON FINANCIAL INCLUSION: The Finance Ministry has asked the CMDs and EDs of Public Sector Banks to visit at least 1% of the villages/habitations allotted to their banks. General Managers have to visit 5% of the villages/habitations allotted to their banks under the Plan. The Ministry has sought monthly position of enrolment of accounts, issue of smart cards and activation of bank accounts along with submission of month wise, village wise, bank wise data on implementation of the Financial Inclusion Plan. NATIONAL PPP CAPACITY BUILDING PROGRAMME LAUNCHED: The Finance Minister of India launched the National PPP Capacity Building Programme and the Centre is hopeful of meeting the infrastructure spend target of $500 billion for the ongoing 11th Plan going forward, it is estimated that India would need $1 trillion for infrastructure spend during the 12th plan period of 2012-2017. About 50% of this requirement is expected from the private sector. CENTRE EXPANDS EXCISE BONAZA FOR HP & UTTRAKHAND: The Centre has expanded the scope of the excise duty exemptions extended to units set up in Himachal Pradesh and Uttrakhand before end March 2010. The Finance Ministry has clarified that full excise duty exemptions will be available on capacity expansions undertaken by such units even after March 2010, which was the cut-off date on which the excise duty exemption regime ended in these 2 states. BSE TO LAUNCH SHARIAH INDEX: The BSE and Taqwaa Advisory and Shariah Investment Solutions (TASIS) launched the BSE TASIS Shariah 50 Index from 27th Dec. The Index is the First Shariah Index created in India utilizing the strict guidelines and local expertise of a domestic, the India-based Shariah Advisory Board. The creation of the Index will help promote financial inclusion of the Muslim population in India and attract investment flows from international funds that must adhere to Shariah norms.
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IRELAND DEBT RATING DOWN AMID CONTAGION FEARS: Irelands debt rating has been lowered two steps by Standard & Poors with a negative outlook, as the Government prepares to unveil a 4 year deficit-cutting plan and contagion spread through the rest of the Euro region. S&P cut Irelands long-term rating to A from AA- and the short term grade to A-1 from A-1+. The reduction leaves its long term grade five steps above Greece, which has the highest junk, or high risk, grade. NABARD TO FUND INDIANS SETTING UP FARMS ABROAD: NABARD is likely to extend funding to agricultural enterprises wishing to set up farming estates abroad. There are opportunities for Indian farmers to take up agriculture in countries in Africa, Georgia, Ukraine and Ethiopia, among others. It is also in the process of concluding a deal with an Israeli Fund for research and technology transfer in agriculture. CORE INDUSTRIES OUTPUT ZOOMS: The output of key infrastructure industries surged by a robust 7% in October, against a 3.9% growth recorded in the same month last year. The six core sectors have a weight of 26.7% in the index of Industrial Production (IIP). During April-October of this fiscal year, the six infrastructure sectors registered a cumulative growth of 4.5%, the same level as achieved in the corresponding period of the previous fiscal. SIDBIs FUTURE PLAN: SIDBIs Venture Capital Arm is set to start a Rs.1000 Crore Fund which can be tapped into by the small and medium enterprises. SWISS BANK NOT SAFE HEAVEN FOR DIRTY MONEY: Swiss Bankers Association (SBA) is the main professional Trade Association lobbying on behalf of the Swiss Banking Industry in Switzerland and abroad. It is a self-regulatory Body with almost all banks of Switzerland being its members. SBA has said that Swiss Banks are not in the business of hiding money. They have certain due diligence obligations in verifying where the money came from. NETWORTH EROSION IN PSUs: The Comptroller and Auditor General of India (CAG) has reported that as a result of complete erosion of networth of 68 PSUs , aggregate networth of these companies had become negative to the extent of Rs.72,798 Crore as on march 31, 2010. CAG also pointed out that due to the negative networth, recovery of the loans extended by the Govt. to 34 companies out of 68 amounting to Rs.29,904 Crore was Doubtful. MODDYS SLASHES IRELAND CREDIT RATING: Moodys slashed its credit rating on debt-stricken Ireland just days after Parliament approved an international bailout and as the European Union battled to safeguard the Euro. Moodys Investors service cut its rating on Ireland by 5 notches from Aa2 to Baa1, citing increased uncertainties over the countrys economy and public finances. Moodys added that the Baa1 rating outlook was negative. SPANISH BANKS BAD DEBTS: Bad loans held by Spanish Banks in October fit their Highest Level since January 1996. Bank of Spain data showed that the property related losses continue to weigh on lenders balance sheets. Total bad debt held by the banks came 103.7 billion ($137.1 billion) for a ratio of bad debt to total debt of 5.66%, up from 5.49% in September and 4.98% in October 2009. INITIATIVE BY GRAMEEN FOUNDATION FOR MFIs: Grameen Foundation, promoted by Bangladesh social entrepreneur Mohammad Yunus, and its affiliates have announced a new initiative to meet the liquidity needs of Indian Microfinance Institutions that focus on both social and financial returns. The Group will make available $8 million in guarantee funds that it expects to generate a minimum of $16 million or up to Rs.72 Crore in local currency financing to poverty-focused MFIs from local banks. DEUTSCHE BANK TO PAY IN TAX SHELTER CASE: Deutsche Bank, Germanys flagship lender and a major international bank admitted criminal wrongdoing for taking part in fraudulent tax shelters that let clients hide billions of dollars, and agreed to pay $553.6 million to settle the case. The Bank has said that it has already set aside money to cover the fine and it will not affect profits the settlement is a part of a larger US Government effort to crack down on banks that help wealthy Americans evade taxes.
November 2010
SEBI TIGHTENS NORMS FOR PREFRENTIAL ALLOTMENT: SEBI has tightened the norms for preferential allotment of shares to promoter or promoter groups, in a move to prevent the misuse of preferential allotments, warrants and convertibles, to manipulate share prices. Insurance of IPO disclosure requirements has been approved. Retail investor IPO limits have been doubled to Rs.2 Lakh. The Pre-announced fixed dates for dividend credit and bonus share issue has been made compulsory. Postal Life Insurance Funds has been given QIB Status. INDIAS EXPORTS AND IMPORTS POSITION: During April-October this year, Exports reached a level of $121.4 billion registering a growth of 26.8%, while Imports during the same period grew by 26% at $194.2 billion. Exports growth for first time (in last three to four years) is higher than Imports growth. During April-October 2010, the trade deficit stood at $72.8 billion. PSU BANKS TO RECRUIT 85,000 STAFF: The Public Sector Banks are going to recruit around 85,000 staff in the next three years to meet the manpower shortage. The PSBs have a tentative plan of recruitment of around 34,000 officers and 51,000 clerks during 2010-13. The system of recruitment through Institute of Banking Personnel Selection (IBPS) will be transparent, speedier and costeffective. The Government has decided to entrust IBPS the responsibility to conduct the common recruitment examination for PSBs. EXCHANGES ALLOWED TO SELECT EUROPE/US STYLE OPTIONS: SEBI has provided the Exchanges, the flexibility to choose between European and American Styles of exercising stock option contracts. Exchanges have been advised that once they opt for a particular style of exercise, it would be applicable across all eligible stocks. Any modification in exercise style would require SEBI approval. RBI SUB-COMMITTEE FOR MFIs: RBI has set up a Sub-committee to be headed by Mr.Y.H.Malegam, a senior member of the RBI Central Board of Directors, which will examine and make appropriate recommendations in regard to applicability of money lending legislation of the states and other relevant laws to NBFCs/MFIs. It will also examine the conditions under which loans to MFIs can be classified as Priority Sector Lending and make appropriate recommendations. NSE/USE - TRADING IN CURRENCY OPERATIONS: National Stock Exchange (NSE) and the United Stock Exchange (USE) will launch trading in currency options in the dollar-rupee pair. Both the Exchanges had received approval from the SEBI to launch options trading. MCX-SX, which currently offers currency futures, was not granted permission by SEBI to launch options trading. RBI EXTENDS TIME FOR CUSTODIAN BANKS: RBI has extended time for custodian banks on payment commitments from November 1 to December 31. RBI has also clarified that in cases where there are sufficient funds in Indian rupees or in foreign currency in the custodian banks Nostro account prior to issuing an irrevocable payment commitment, incorporation of the inalienable right to securities clause will not be mandatory.
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WORLD BANK AND IMF TO CHECK FINANCIAL PULSE: India has agreed to an International Monetary Fund (IMF) and World Bank scrutiny of its financial system, to asses the countrys capacity to manage a financial crisis, as part of the global efforts to prevent a 2008 type of financial meltdown, which could also trigger some financial sector reforms. SEBI EXEMPTS GOVT. HOLDING FROM 50% DEMAT: SEBI has clarified that any company, while computing the minimum requirement of 50% shareholding of non-promoters in demat form, can exclude Government holding, if the Government holding is in a non-promoter category. SEBI advised stock exchanges to put in place, the adequate systems and issue the necessary guidelines for implementing the shareholding norm. NSE ONLY FOR EUROPEAN STYLE OPTIONS: Currently, NSE and other stock exchanges offer American Options for individual stocks, where contracts can be squared off before the expiry date. Now National Stock Exchange (NSE) has decided to switch over to European Stock Options, wherein the positions can be settled only on the date of expiry. NEW CPI INDEX TO BE BASED ON STATE STATS: The new Consumer Price Indices set to be rolled out from January will be a ground up compilation of inflation with price index for each State adding up to a National Index. Each State will have two consumer price indices, one for rural and another for urban areas. These CPI rural and urban indices would add up to National Urban and Rural Retail indices, which will then combined based on their relative weights to give a composite retail index. SUPREME COURT VERSION ON ARBITRATION: Supreme Court has ruled that a guarantor outside the arbitration agreement can not be made a party to the arbitration proceedings. GOVT. RESTRICTS FISCAL DEFICIT: The spectrum bonanza (3-G) and higher tax collections have helped the Centre Govt. to restrict its fiscal deficit during the first half of the current financial year to 34.9% of the budget estimate for 2010-11 compared to 49.3% in the period a year ago. This is the Lowest Level of Fiscal deficit during the first half of any financial year since 1998-99, the period for which data are available on the Controller General of Accounts (CGA) Website. MINORITY INVESTMENTS MADE BY BANKS: RBI proposes to cap the minority investment for banks at 20% as against the present threshold of 30%. According to the proposal 50% of the investment exceeding the newly proposed cap would be deducted from the banks Tier-I capital while the rest would be deducted from the Tier-II capital. Both these deductions would be applicable while computing the capital adequacy ratio of the banks on a solo basis. PORTFOLIO MANAGERS TO FIX FIRST TIME TICKET SIZE: SEBI has clarified that the minimum first-time ticket size a portfolio manager needs to collect from his client is Rs.5 lakh. This clarification was a result of portfolio managers accepting funds below the minimum prescribed amount of Rs.5Lakh while opening the account on the basis of their clients commitment that the remaining funds would be brought in soon. PANEL FOR LOWERING INTEREST ON CROP LOAN: The Prime Minister-appointed Working Group on agricultural production has recommended crop loan to farmers to be given at 4% as against the current 5%. At present, crop loan under the Priority Sector Lending to Agriculture is offered by banks at 7%. Under this the borrower pays 5% and the rest 2% is subsidized by the Central Government as subvention. Under new proposal, the Government subsidy will go up to 3% of crop loan as farmers will be required to pay only 4%. NCDEX LAUNCHES DHAANYA BENCHMARK INDEX: National Commodity and Derivatives Exchange (NSDEX) announced the launch of Dhaany, a benchmark index for agriculture futures. Dhaanya consists of 10 most liquid Agri-futures contracts that contribute around 75% of total Agri-futures trading on the NCDEX platform. US GOVT. TO PUMP IN FUNDS TO BOOST ECONOMY: The Federal Reserve of US launched a fresh effort to support a struggling US Economy, committing to buy $600 billion in Government Bonds despite concerns that the programme could do more harm than good. The US Bank said that it would buy about $75 billion in longer-term Treasury Bonds per month through the end of June 2011 and could adjust purchases depending on the strength of the recovery. WORLD BANK REPORT-INDIAN ECONOMY: According to the World Bank Report, India is one of the 40 Most Improved Economies that made significant changes in business regulation at a steady pace in 2009 to make it easier for firms to operate. Since 2005, India has implemented 18 business regulation reforms in 7 areas. RBI WORRIES ON BANKS SB MINIMUM BALANCE FEE: RBI is concerned at the rising numbers of complaints by customers on steep charges by banks if the minimum balance in the savings account dips even marginally. The minimum balance requirement for the savings account on a quarterly basis can be as high as Rs.10, 000 for some banks. The penalty varies from one bank to another and can be as high as Rs.750, not included taxes. RETIREMENT LIABILITIES TO BE SHOWN AS RESERVES: The Countrys Apex Body on accounting standard (ICAI) has cleared way for a change in the way Indian Companies account for their employees post retirement benefits like gratuity. Instead of providing for these in profit and loss account, companies can create a separate reserve. The Government will allow firms not to show the effect directly in their books of accounts but reflect them separately in a Reserve Account. RBI TO BANKS FOR PROMOTING E-PAYMENT OPTIONS: RBI told banks to improve the penetration of electronic payment systems to review the present situation. At present, nearly 90% transactions in the banking industry are done electronically in value terms; the share of electronic payment is, however, just about 35% in terms of the number of transactions. Some banks are lagging the industry average in making their customers adopt electronic options. RBI-REGULATORS AUTONOMY NOT TO BE COMPROMISED: RBI has said that the autonomy of the Regulators is not compromised either in fact or in perception. Underscoring that since the global crisis, world over there has been a growing shift in favour of assigning greater responsibility to Central Banks for Systemic oversight and macro-prudential regulation. This greater responsibility is driven by the capability of Central banks among the regulators to perform the intended tasks. NHB GUIDELINES FOR HOUSING FINANCE COs: National Housing Bank, the Regulator for the Housing Finance Companies has issued guidelines that the borrowers from housing finance companies such as HDFC, LIC Housing and Dewan Housing, may not have to pay pre-payment charges if they make the payments out of their own source of funds. STOCK EXCHANGES AUTHORISED FOR MF PRODUCTS: According to the circular issued by the SEBI, purchase and redemption of Mutual Fund Schemes can now also be done through the clearing members of the Recognised Stock Exchanges, apart from the existing distributor facilities. The circular also said that depository participants of registered depositories are now permitted to process redemption requests of units held in de-materisalised form.
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NEW STAMP DUTY NORMS FOR STOCK MARKET: At present, there is no uniform law that specifies who should bear the stamp duty. But in 95% of cases, it is borne by the purchaser. The duty on share transfer is fixed by the Centre at 0.25%, but in case of share issuance, it is decided by States. Under the proposed system, an electronic record would be the instrument for stamp duty and the rate will be uniform across States. This will be a major shift from the existing structure where States directly collect the duty, whose rate varies from one State to another. P & S B GETS SEBI NOD FOR IPO: Currently the Government owns 100% stake in Punjab & Sindh Bank, with the Bank being the only unlisted one among the 19 Nationalised Banks in the country. The Bank has got the nod from SEBI for its estimated Rs.600 Crore initial IPO likely to hit the markets shortly. PUBLIC SECTOR BANKS LEAD IN OPENING ATMs: Public Sector Banks are taking the Lead in spreading the reach of ATMs in the country. Offsite ATMs of Public Sector Banks grew by 70% to 16,883 in 2009-10 against 9898 in 2008-09. The State Bank Group itself more than doubled its offsite ATMs to 9836 in 2009-10 against 4193 in the previous year. However the growth of Private Sector Banks has been more muted. MICROFINNACE NEW BILL TO BAN MULTIPLE LOANS: The Bill by incorporating provisions will help identify wrong-doers and discourage wrong practices. Borrowers taking loans from microfinance institutions may have to pay back one loan before taking another. They may no longer be allowed to indulge in 'multiple borrowing' from the same MFI or from more than one. Similarly, MFIs may also not be permitted to lend to an individual who has an outstanding loan. IMPLEMENTATION OF IFRS ON TRACK: The Government has said that the International Financial Reporting Standards (IFRS) are well on their way to be implemented and will proceed with effect from April 1, 2011 as per schedule. Barring Banks, Insurance Companies and Small Companies will have to follow the converged accounting standards. National Advisory Committee on Accounting Standards (NACAS) has almost finalised the drafting of the Indian Accounting Standards converged with IFRS. INDIA ELECTED AT UNCTAD: India has been unanimously elected as Vice-President at a UNCTAD Conference held in Geneva at the 6th UN Conference to review Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices. The United Nations Set of Principles and Rules on Competition is the only multilateral instrument on competition policy. SUPREME COURT RULING ON NOMINEE OF BANK ACCOUNTS: The Supreme Court has clarified that the nominee of a depositor in a bank does not get ownership of the money in the account after death of the depositor. The nominee gets exclusive right to receive the money lying in the account after death of the depositor. It gives him all the right of the depositor as far as the depositors account is concerned, as per Section 45ZA of the Banking Regulation Act but this Law is not concerned with the succession. UNION BANK OF INDIAS HISTORY BOOK RELEASED: The Bankers Beacon, a book on the history of Union Bank of India has been released by the Finance Minister, Pranab Mukherjee in New Delhi at the 92nd Foundation Day Function of the Bank. The bank has also drawn a three-year Plan for Financial Inclusion to cover 32000 villages by March 2013. BANK OF MAHARASHTRA LAUNCHES E-BANKING LOUNGE: Bank of Maharashtra has launched its E-banking Lounge, a third generation (3G) technology-enabled self-banking option at 3 branches. This facility enables customers to do selected Banking transactions online through 3G technology-enabled computers. These include depositing cheques through cheque deposit machines and printing of the account statement without the help of branch staff. BSE LAUNCHES HISTORIC VOLATILITY INDEX: The Bombay Stock Exchange (BSE) has launched the realised volatility index on its benchmark index, the Sensex. The Sensex Realised Volatility (REALVOL) Index will provide market participants, with an accurate measure of the historic volatility of the Sensex over fixed one-two and three month time horizons. Realised volatility is a measure of actual price volatility, based on past price volatility, based on past price movements over a specified period. SEBI NOTIFIES RISE IN RETAIL INVESTMENT LIMIT: SEBI has notified the increase in the retail investment limit to Rs.2 Lakh in initial public offers. The new norms will be applicable to issues that have yet not opened for subscription. It has also notified norms that call for the issuer company to disclose to the public the fact that it has filed the draft offer document. MAHA-RATNA CERTIFICATES CONFERRED BY GOVT: All 4 Public Sector Enterprises-ONGC, IOC, SAIL and NTPC who were Navratna since 1997 and declared Maharatna on May 19, 2010 received the certificates from the Union Minister of Heavy Industries and Public Enterprises. The Maharatna Status provides for enhanced autonomy and operational flexibility. The Maharatna PSUs can invest up to Rs.5, 000 Crore in one project on their own, while the limit for Navratna companies is Rs.1, 000 Crore. INFRASTRUCTURE FINANCING PANEL: The Former Deputy Governor of RBI, Dr. Rakesh Mohan, has been appointed Chairman of a newly set up High Level Committee on financing of infrastructure. The Panel would asses the investment required to be made by the Central and State Governments, Public Sector Undertakings and the Private Sector during the 12th Five Year Plan. It will also identify the areas and activities to be financed by the Government, Public and Private Sector. The infrastructure investment envisaged in the Twelfth Five year Plan would be double the level of the 11th Plan period at around Rs.41 Lakh Crore. CHINA HIKES CASH RESERVE RATIO: China ordered its Banks to hold back more money as reserves in a new move to curb lending and rising inflation. The order was the second reserve increase in two weeks when the Govt tries to restore normal financial conditions and curb inflation after its recovery from the global crisis. Chinas state-owned banking industry was ordered to set aside an additional 0.5% of deposits as reserves, effective November 29. The reserves vary by institution, but could be as high as 19% for the biggest commercial lenders. NEW BANK LICENCES THIS FISCAL: The Union Finance Minister has said that granting new licences is aimed to improve access to banking services. At last count, the country had 26 Public Sector banks, 7 New Private Sector Banks, 15 Old Private Sector Banks, 31 Foreign Banks, 86 RRBs, 4 Local Area Banks, 1721 Urban Cooperative Banks, 31 State Co-operative Banks and 371 District Central Co-operative Banks. Despite this, less than 40% of Indias population have access to a bank branch. RBI PENALTY ON COOPERATIVE BANK: RBI has imposed a penalty of Rs.1 Lakh on Kasundia Cooperative Bank Ltd., Howrah, for violating the provisions of Section 35A of the Banking Regulation Act, 1949, by resorting to borrowings without their prior approval. SUPREME COURT RULING ON WORKING HOURS: The Supreme Court has ruled that Fixing of hours of work are not to violate any statutory provision or statutory rule and these are really management functions and the courts must exercise restraint and not ordinarily interfere with such management functions. FREE INSTANT MOBILE FUND TRANSFER UNVEILED: The National Payment Corporation of India (NPCI) has launched instant funds transfer service through mobile phones, which allows customers of a bank to send money to a customer of any other bank. The
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service termed as Interbank Mobile Payment Service (IMPS) will support interbank transaction from low-end handsets to high-end mobiles. APS ALTERNATIVE TO MFIs: Andhra Pradesh, which has nurtured microfinance institutions (MFIs) in the country, has now set up Community Finance Institutions (CFIs) to provide an alternative to MFIs. Union Bank of India is to provide revolving cash credit of Rs.50 Lakh at 10% interest to 20 Mandal Mahila Samakhyas (MMS) to begin with. As against the weekly repayment system of MFIs, those who borrow from MMS would have the flexibility of repaying the one year loans in three, six or 12 months interval. The members would be eligible for new loans after they repay existing loans. INVESTMENT ISSUE OF GOVT. STAFF PF AMOUNT: The accumulations in the GPF are kept in the Public Account of India. Hence there is no compromise on the safety of the GPF accumulation and the Government does not intend to invest it in the stock market. GPF maintains the pension fund of government employees, while Employees Provident Fund Organisation (EPFO) manages retirement fund of private and public sector enterprises. The total corpus as on March 31, 2009 was Rs.83, 363 Crore. Of the total corpus, the Largest chunk of Rs.45, 733 Crore was from the Civil Head, followed by Rs.21, 578 Crore from Defence Sector and Rs.16, 052 from the Railways.
October 2010
LAUNCHING OF PENSION SCHEME FOR UNORGANISED SECTOR: The Centre has approved the operational guidelines for the Swavalamban, a Pension Scheme for the unorganized sector. The scheme is applicable to anyone in the unorganized sector who join the New Pension Scheme subject to meeting the eligibility criteria. Under this scheme, the Centre will contribute Rs.1000 a year to each NPS account opened in 2010-11 and for the next 3 years. GOVT. TO SET CAP ON NUMBER OF DIRECTORSHIP: According to the recommendations made by the Standing Committee on Finance, a person will no longer be able to act as a director of more than 5 listed companies and 10 public sector (Non-listed) companies. HIGH COURT RULING ON IRDAS POWERS: The Delhi High court has upheld the powers of the Insurance Regulatory and Development Authority of India (IRDA) to direct a firm to stop issuing, marketing or selling insurance policies or collecting money towards insurance premium or carrying on any related activity. RBI TO STATE GOVERNMENTS ON PRIVATE BANKS: RBI has told several State Governments not to give new businesses, that could generate thousands of Crore of income, to private sector banks. RBI has not spelt out any reason for its decision, but private banks think it is driven by their comparatively lower lending in Government-sponsored programme- schemes that carry a slice of subsidy and are aimed towards job creation and poverty reduction. NHB FOR MORTGAGE GUARANTEE COMPANY: The proposed Mortgage Guarantee Company would be an NBFC. Current regulations require Mortgage Guarantee Company to have a minimum paid-up capital of Rs.100 Crore. The initial paid up capital of the Venture will be Rs.120 Crore. National Housing Bank has said that the Technical Partner will hold 36% equity stake in the company. Asian Development Bank (ADB) and International Finance Corporation (IFC) will each take a 13% stake and NHB as a Lead Partner will hold 38% stake in the proposed venture. CURBS ON BANK CREDIT FOR NON-COMPETE FEE: RBI has said that the restriction on grant of bank advances for financing promoters contribution towards equity capital would extend to bank finance related to acquisitions such as payment of non-compete fee. The restriction would also be applicable to bank finance to such activities by overseas branches/ subsidiaries of Indian Banks. ORDINANCE TO RELAX MERGER PROCEDURES: Under the proposed ordinance, the merging entities will not need to take the permission of the Competition Commission of India (CCI) if the turnover of the smaller company is less than Rs.750 Crore or its networth is under Rs.250 Crore. At present, if the combined turnover of the merged entitiy exceeds Rs.3000 Crore or the networth is more than Rs.1000 Crore, prior sanction of the CCI is mandatory. FISCAL DEFICIT DOWN IN APRIL-AUG: Aided by increased tax receipts and a near three fold jump in non-tax revenues, the fiscal deficit in April-August 2010 fell 16.93% to Rs.1.51 Lakh Crore on a year-on-year basis. This deficit level represents 39.7% of the budgeted fiscal deficit of Rs.3.81 Lakh Crore for the entire 2010-11. Last year, the centres fiscal deficit as a percentage of the budget estimate stood at 45.5%. NEW FDI NORMS ON LARGE RETAILERS: The Department of Industry and Policy has relaxed FDI rules which will mainly help retail firms in joint venture with foreign retailers and overseas NBFCs. Under the new rules, the condition that the retailers have to use items bought from group wholesaler for internal consumption, has been done away with. Foreign owned NBFCs will now be allowed to set up subsidiaries. EXTERNAL DEBT UP: According to the RBI Data, the external debt of India went up by $10.8 billion during the quarter ending June and stood at $273.1 billion on account of significant rise in short term credits and commercial borrowings. Thus external debt increased by 4.1% in the first quarter of this year over the level recorded as at the end of March 2010. SUPREME COURT VERSION ON DEBT TRANSFER BETWEEN BANKS: The Supreme Court has set aside a Gujarat High Court order that prohibited banks from transferring debts, including NPAs among each other. Supreme Court has ruled that the transfer of debts between banks was legal and was allowed under the Banking Regulation Act. FMC LIFTS BAN ON SUGAR FUTURES TRADE: Commodity Market Regulator Forward Markets Commission (FMC), has allowed the ban on sugar futures trading to lapse, paving the way of trading with new contracts in what is seen as an important step towards total decontrol of the sugar industry. REC GETS NOD TO HIKE FII HOLDING: Rural Electrification Corporation (REC) has got approval from RBI to raise foreign institutional investor stake limit in the company to 35% from existing 24%. REC, which provides loan assistance to State Electricity Boards and State Power Utilities for investment in electrification projects, was granted Infrastructure Finance Company Status by the RBI last month. GOVT. INITIATES KVIC KHADI REFORMS: A Khadi Reforms and development Programme (KRDP) has been initiated by the Government with assistance to KVIC from Asian development Bank(ADB). Under this programme, each reform implementing Khadi Institution (KI) will be provided assistance of around Rs.1.19 Crore to implement the identified set of reform activities.
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MORE LEEWAY FOR STANDALONE PDs: RBI has permitted Standalone Primary Dealers to raise Inter-corporate Deposits (ICDs) to the extent of 75% of their net owned funds. Earlier, primary dealers were allowed to raise ICDs only up to 50% of their net owned funds. SEBI DEBARS MANY FIIs ON NON-COMPLIANCE GROUNDS: SEBI has debarred 197 FIIs and 342 Sub-accounts handled by FIIs from taking fresh positions in the capital markets until they comply with the SEBI directive of providing requisite declarations and the undertakings about their structure. Failure to comply by September 30,2010 prompted the Regulator to debar these entities. GOVT TO COMPENSATE BANKS ON NO-FRILLS ACCOUNTS: The Finance Ministry is considering a proposal to compensate around 50-60% of the expenses that banks incur on opening and maintaining each 'No-frills accounts'. Such an incentive may encourage banks to expedite the financial inclusion process. GOVT. DIRECTIVE TO RBI ON RRBs: The Government has asked the RBI to ensure that there is equitable placement of deposits, at least under the Central government Schemes, with RRBs. They had faced discrimination in access to government funds despite being jointly owned by the Central Government, State Government and Sponsoring banks in the ratio of 50%, 15% and 35% respectively. RBI SETS TERMS FOR WORKING GROUP: RBI has set the terms of reference for the working group constituted by it and headed by Mr. Deepak Mohanty, ED of RBI. The working group will survey the operating procedures of major central banks, review the current operating procedures of monetary policy in India, in particular, the Liquidity Adjustment facility. IIFCL TO LAUNCH TAKE-OUT FINANCE SCHEME: India Infrastructure Finance Company Ltd. (IIFCL) plans to launch its Take Out Financing Scheme to help create more headroom for banks to finance the infrastructure sector. The Scheme provides for takeout up to 75% of the residual amount of loan of any individual lender after one year of the scheduled commercial operation date (COD) with a minimum tenure of about 6 years, post the buy out. RBI DIRECTIONS ON CUSTODIAN BANKS: In order to protect custodian banks against adverse equity price movements, RBI has directed that only those banks which add the inalienable rights clause in their irrevocable payment commitments, would be allowed to issue the instrument. From November 1, Mutual Funds and FIIs would have to accept a clause from their custodian banks that provides these banks, an inalienable right, over the securities to be received as payout in any settlement. SEBI FOR PORTFOLIO MANAGERS: SEBI asked portfolio Managers that profits of their schemes be computed only on the 'High water-mark' principle. This means the portfolio managers can only charge fee (Or share profit) based on the highest value that the portfolio has reached over the life of the investment. IRDA SETS UP PANEL ON IFRS: The Insurance Regulatory and Development Authority (IRDA) has formed a working group to be headed by Mr. R.K.Nair, Member IRDA, to study various aspects associated with the convergence of International Financial Reporting Standards (IFRS) slated to come in force from April 2011. The Group would study various aspects pertaining to implementation of Accounting Standard 30 (AS30) of ICAI. INDIA AND CHINA GROWTH PROJECTION BY IMF: The International Monetary Fund (IMF) has said in its latest World Economic Outlook Report that the Indian Economy will grow by 9.7% in 2010 and a 8.4% in the next fiscal, driven by robust industrial production and macro-economic performance. However, China is expected to grow at an even faster rate of 10.5% in 2010 and 9.6% in 2011 driven by domestic demand . RBI PANEL ON NEW URBAN CO-OP SOCIETIES: RBI has constituted an Expert Committee headed by Mr. Y.H. Malegam for studying the advisability of granting new Urban Co-operative Banking Licences. It will also examine whether licencing could be restricted only to financially sound and well managed co-op credit societies through conversion route. BANK OF ENGLAND AND ECB HOLD RATES: The Monetary Policy Committee of Bank of England kept rates at a record low 0.5% for a 20th consecutive month. The European Central Bank held interest rates at a record low 1.0% NEW SERVICE TAX PAYMENT SCHEME: The Finance Ministry has come up with an Optional Composition Scheme for service tax payment on promotion or marketing of lotteries. A lottery selling Agent or distributer can opt to pay flat service tax of Rs.6000 on every Rs.10 Lakh of aggregate face value of lottery tickets, where the guaranteed prize payout is more than 80%. If the guaranteed prize payout is less than 80%, they will have to pay service tax of Rs.9000 on every Rs.10 Lakh of aggregate face value of tickets. SUPREME COURT VERSION ON FEMA: Supreme Court has ruled that the adjudicating Authorities under the Foreign Exchange Management Act and Rules are not bound to furnish all documents in their possession to the person to whom they issue show cause notice. Only those documents they rely on are required to be shown to the person under notice. The authorities can refuse to supply other documents. COURT VERSION ON PAY SCALES FOR SAME POSTS: Delhi High Court has ruled that there can not be discrimination among employees holding the same posts and doing similar nature of work in terms of their pay scale unless one has higher qualifications. NSE, USE FOR TRADING IN CURRENCY OPERATIONS: National Stock Exchange (NSE) and United Stock Exchange (USE) have received approval from SEBI to commence trading in currency operations. The options will be introduced on the USD-INR spot rate with 3 each in In the money, Out of the money and in the Near the money options. FM LAUNCHES IIFCLS TAKEOUT FINANCE SCHEME: Finance Minister, has launched the IIFCLs Takeout Finance Scheme and first transaction has been signed by Union bank of India. The sanctions involving Rs.1500 Crore of UBIs exposure in 7 different projects from power and road sectors were given. Investment requirement of the infrastructure sector in the 11th plan (2007-12) is estimated at $514 billion. During the 12th Plan period (2012-17) infrastructure investment of $1 trillion has been envisaged. SUPER- REGULATOR RBI GOVERNOR KEY POST: RBI will now chair a sub-committee of the Financial Stability and Development Council (FSDC) that will be responsible for financial stability and regulatory coordination. This sub-committee would be the first stop for sorting out any discord between the Regulators. This sub-committee will have all regulators and senior finance ministry officials as members and RBI Governor as the Chairman, a structure akin to that of the High Level Coordination Committee on Financial Markets. ATM TRANSACTIONS VIA SWITH GROWS: The National Payments Corporation of India, which operates the National Financial Switch that connects all ATMs to banks across the country has said that the ATM transactions through the Switch have grown to Rs.11 Crore in September up from Rs.10 Crore in August.2010.
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IDR HOLDERS OUT OF STANCHART RIGHTS: Holders of Standard Chartered Banks Indian Depository Receipts will not be able to subscribe to the Rights Issue of the Bank, but will get the proceeds from the sale of their entitlement. As 10 IDRs constitute one share of the bank, IDR holders are entitled to one share for every 80 IDRs. ATM FACILITY FOR RURAL, CO-OP BANK CUTOMERS: The National Payment Corporation of India will allow standalone RRBs and Cooperative Banks with CBS Platform and an ATM Switch to be connected to the National Financial switch through a sponsor bank which is already linked to the NFS. Mainstream banks can enroll RRBs and Cooperative banks as their sub-members for offering the customers of the latter All India ATM Connectivity after profiling them for potential risks. SEBI NOD ON SALE OF ASBA FORMS: SEBI has allowed syndicate and non-syndicate members to charge commission on sale of (Applications Supported by Blocked Amount) ASBA forms in the same manner as for non-ASBA forms. For ASBA forms procured directly by SCSBs, they would be entitled for selling commission only and no processing fee shall be paid to them. SEBI DECENTRALISES FILING PROCESS: SEBI has decentralized the process of filing draft offer documents. Companies who wish to raise capital up to Rs.100 Crore can now file their draft red herring prospectus (DRHP) at SEBIs Zonal Office under whose jurisdiction the companys Registered Office falls. RBI STAKE IN NABARD DOWN: Reserve Bank of India divested its stake amounting to Rs.1430 Crore in NABARD. Following this, RBIs holding in NABARD has come down to 1%. The Govt now holds 99% of the stake. RBI had earlier held 72.5% of equity in NABARD amounting to Rs.1450 Crore. The remaining shareholding of Rs.550 Crore was with the Govt. of India. SUPREME COURT RULING ON COMPUTER KNOWLEDGE: The Supreme Court has ruled that the judges should have basic computer knowledge at the time of appointment and a candidate who fails to fulfil the requirement can be denied employment. NO PF MONEY IN STOCKS WITHOUT GOVT. GUARANTEE: Labour Ministry has said that it can invest part of the Rs.5 lakh Crore provident fund corpus in the stock market provided the finance ministry guarantees safety of the workers money. INSURANCE POLICIES TO BE AVAILABLE AT POST OFFICES: IRDA has permitted Postal Circles to distribute insurance products which is to act as a corporate agent of insurers. The DoP has divided the whole country into 22 postal circles for providing postal services. Each circle of India Post should be treated as a separate unit in order to grant independent corporate agent licence with various insurers. SUPREME COURT VERSION ON PRESUMPTION: The Supreme Court has ruled that it is a settled proposition of law, one can not draw a presumption that the chairman of a company is responsible for all acts committed by or on behalf of the company. RBI PANEL TO LOOK INTO MFIs: RBI has set up a committee to study the issues and concerns in the microfinance institutions (MFI) Sector, including ways and means of making interest rates charged by them reasonable. RBI regulates only those MFIs that are registered with it as NBFCs. RBI, however, does not prescribe lending rates for these institutions. LAUNCHING OF GREEN TRIBUNAL: India has launched National Green Tribunal (NGT), a Special Court to deal with environmental issues, thereby becoming the third country after Australia and New Zealand to do so. Former Supreme Court Justice, Mr. Lokeshwar Singh Panta took over as Chairman of the NGT, which will have its headquarters in Delhi and 4 circuit benches across the country. CHINA RAISES INTEREST RATES AFTER LONG TIME: China raised its benchmark lending and deposit rates for the first time since 2007 after inflation accelerated to the fastest pace in 22 months. The one year deposit rate will increase to 2.5% from 2.25% and the lending rate will increase to 5.56% from 5.31%. INDIA FACTORING GETS RBI NOD: India Factoring and Finance Solutions Pvt. Ltd. (IFFS) has received certificate of registration from RBI to commence business as an NBFC. Punjab National Bank has promoted the joint venture with FIMBANK Group (Malta) and Banka IFIS (Italy). The venture will be undertaking business of factoring, forfaiting and trade related activities. Both the partners specialise in these services. PNB has said that the company will start operations immediately as the necessary infrastructure has already been put in place. UPGRADATION OF COMPANIES BY CRISIL: CRISIL has upgraded 253 companies in its half yearly rating report. This is the largest upgrade done by CRISIL in a 6 month period. 40% of the companies that were upgraded belonged to the sectors of auto and auto-parts, construction, trading and distribution of commodities and products and metal players. From the financial sector, NBFCs dominated the upgrades. The companies that were rated accounted for 40% of the total bank credit outstanding. INDIAS TRADE DEFICIT WORLD POSITION: India has the worlds 3rd largest Merchandise Trade Deficit after the US and UK, as per data from the World Trade Organisations just released international trade Statistics 2010. In 2009, the countrys Trade Deficitarising from its import of goods being more than its exports amounted to $87 billion, against $549 billion for the US and $129 billion for the UK. GOVERNMENT TO REPURCHASE SECURITIES: The Government, in consultation with RBI, has announced the repurchase of Government Securities worth more than Rs.28, 500 Crore to ease the liquidity position. The tight liquidity situation pushed the yield on the 10 year paper to 8.17% Through the repurchase, RBI is looking to buy back some of the illiquid securities and inject liquidity into the market. SEBI GUIDELINES ON SCHEMES AFTER MERGER: In order to render mergers or consolidations of mutual fund schemes easier, SEBI has mandated that on being merged, the fundamental attributes of the surviving scheme will not undergo a change. This is subject to fund houses first needing to ensure that the surviving scheme remains in existence after the merger and that the fund houses proves that circumstances merit merger or consolidation of schemes.
September 2010
SEBI ALLOWS TRADING THROUGH MOBILES: SEBI has cleared the way for use of wireless technology in securities trading. Investors can now transact in securities through mobiles or wireless Internet devices such as laptops with data -cards, if they have an online trading account with their brokers. US EXIM BANK SANCTION FOR UMPP: The Board of the Eximbank of USA has approved $917 million in loan guarantee the largest such support to any Indian Company towards equipment for Reliance Powers Sasan Ultra-mega Power Project (UMPP).The Sasan project is one of Indias UMPP designed to help the country to reach the specific energy capacity goals by 2017.
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TERMS RELAXATION FOR PROMOTERS SHARE IN CDR: Currently, promoters are required to pump in upfront, 15% of the amount of sacrifice that banks are required to make in a debt that is being restructured. Banks have suggested to RBI that in case the promoters are not in a position to deposit up front , they should be allowed to bring the same in a staggered manner over the period when the company is undergoing implementation of debt restructuring. PNBS ONLINE REMITTANCE FACILITY: Punjab National bank has launched PNB NRI Remit-India, an online remittance facility and PNB World Travel Card. The remittance facility is an online cross-border remittance solution to send money from the US to India and has been launched in association with the Bank of New York Mellon. The World Travel Card is designed as a prepaid wallet for persons travelling abroad that can be used outside India. It is in association with MasterCard and is available in Dollar, Euro and Pound. IRDA GUIDELINES FOR DISPLAY ON POLICY DOCUMENT: According to the IRDA, the Life and Non-Life Insurance Companies will now have to display the agency code, name and contact details prominently on the first page of the Policy Document. There have been complaints of instances of dummy agency codes and non-existent agent. SUPREME COURT VERSION ON INTEREST PAYMENT: Supreme Court has clarified that if an arbitration agreement says that no interest would be payable for an award amount from the date when the cause of action arose and the date of the award, the court can not order a party to pay interest. FII HOLDING IN ING VYASA BANK: RBI has said that foreign institutional investor holding in ING Vyasa Bank Ltd. has reached the trigger limit of the Banks Paid-up capital. Further purchases of the banks shares by FIIs in the secondary market would be allowed only after obtaining prior RBI approval. RECOMMENDATION BY PANEL ON FOREIGN INVESTMENTs: A Govt-appointed Panel on foreign investment, headed by Mr. U.K.Sinha, Chairman of UTI Asset Management Company, has recommended to remove the distinction between various forms of foreign investors with Qualified Financial Investor Model. The new concept will pave the way for foreign individual investors to invest directly in the Indian Stock Market by opening a dedicated trading account with a registered depository participant. NEW ROLE OF POST OFFICES: From life insurance and mutual funds to e-transfers of money and accepting pass-port applications, the Post Office is now a storehouse of information on commodity prices. India-Post, which had signed an agreement with the Ministry of Statistics and Programme Implementation to supply information on commodity prices to help it bring out the Consumer Price Index every month, has now put over 1000 branch heads of rural post offices across the country on the job. LIC TO IMPOSE SURRENDER CHARGES ON NEW ULIPs: Life Insurance Corporation of India proposes to introduce surrender charges on all its new unit-linked plans from September 1 having pressure on margins due to recent IRDA regulations on ULIPs. Surrender charges are collected from policy holders when they surrender policies prematurely. Till now, while private insurers levied service charges, LIC had resisted imposing surrender charges. Now the discontinuance charges are in accordance with IRDA guidelines. HDFC BANK LEADS THE PACK IN E-TRANSACTIONS: According to RBI data on Electronic Transactions, HDFC Bank customers are more open to using technology for monetary transactions. The Bank holds a sizable lead over competitors in the number of National Electronic Funds Transfer (NEFT) based transactions. In July, the Bank recorded more than 27 Lakh transactions on the NEFT System, 1 Lakh more than its nearest Competitor, SBI. CIBIL LAUNCHES DATABASE OF MORTGAGED PROPERTIES:Credit Information Bureau (India) Ltd. and TransUnion launched CIBIL Mortgage Check- a Repository of mortgage information, in consultation with National Housing Bank. The database will contain information on properties against which owners have availed loans, summaries of those loans and comprehensive information on those properties. It will help lenders share and access mortgage information, exercise stronger due diligence and reduce fraudulent transactions. PUBLIC DEBT UP: The total Public Debt of the country on March 31 was Rs.25, 92, 945 Crore. The countrys Public debt increased by 4.1% to Rs.26, 97, 940 Crore during the first quarter of the fiscal. Of the total, Internal Debt accounted for 89.75% of public debt in April-June quarter, while the share of external debt was 10.25%. CANARA BANK-CHAIR IN BANKING FINANCE: Canara Bank has established the Canara Bank Chair in Banking Finance at the Indian Institute of Management, Bangalore. The Bank has created a corpus in the Institute for the purpose. The proposed Chair will conduct research in innovation, regulation and opportunities in the area of banking and finance. SEBI GUIDELINES ON NON-PROMOTERS SHARES: SEBI has issued a circular stating that shares of companies will be allowed to be traded in the normal segment of the Stock Exchanges only if at least 50% of Non-Promoter shareholding is held in dematerialized form. RBI CANCELS LICENCE OF OLDEST CO-OP BANK: RBI has cancelled the licence of Anyonya Sahayakari Mandali Cooperative Bank Ltd, Indias oldest Co-operative Bank in Gujarat. The statutory inspection of the bank with reference to its financial position as on 31.3.2005 assessed the CRAR at (-) 49.2%, negative networth of (-) 2,181.61 Lakh, erosion in deposits to the extent of 24.2%. The Bank had also defaulted in maintaining of SLR. RBI CONFIDENT ON BANKS MEETING BASEL-III: As on June 30, 2010, the aggregate capital to risk weighted assets ratio of the Indian Banking System stood at 13.4% of which Tier-I capital constituted 9.3%. RBI Governor pointed out that although the Basel-III norms are yet to be calibrated, it is unlikely that they will be higher than these figures. SEBI STOPS STRUCTURED PRODUCTS WITHOUT CAPITAL: SEBI has asked Credit Rating Agencies not to rate non-capital protected structured products, putting an end to issuance of these instruments. A non-capital protected structured product carries both credit and market risk. SUPREME COURT RULING ON WITHHOLDING TAX: The Supreme Court has set aside a Karnataka High Court decision on withholding tax obligation on cross-border payments, holding that the tax deduction at source (TDS) requirement should arise only in cases where such payments are taxable in India. SUPREME COURT RULING ON CCI: In a landmark decision, the Supreme Court said that the Competition Appellate Tribunal (COMPAT) can not interfere in the investigations initiated by Anti-Monopoly Watchdog, the Competition Commission of India (CCI). The parties can not go in appeal before the COMPAT at a preliminary stage, where the CCI has taken only a prima facie view that the case should be investigated further by the Director General.
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EXTERNAL DEBT UP: Indias external debt increased by $37 billion, up 16.5% over $224.5 billion at the end of March 09. As per the Finance Ministry Report, Indias total external debt, stood at $261.5 billion in March 2010. The debt structure, however, still remains favourable with long term debt at 79.9% of the total external debt. WORLDS LARGEST VALUE CREATERS: According to the Report of Boston Consulting Group (BCG), Mukesh Ambani-led Reliance Industries has been ranked Second in the list of Worlds 10 Biggest Sustainable Value Creators companies that have been successful in creating the most shareholder value over the last decade. List compiled by the Global Management Consulting Firm names Brazil-based mining and materials giant Vale as the Top Value Creator worldwide for the 2000-2009 period. RBI ALLOWS BANKS RESTRUCTURING WITHOUT NPA TAG: RBI has allowed banks to restructure loans of Airline Companies without reckoning them as NPA. Following the global financial crises, RBI had allowed banks, as one time measure, to restructure loans without classifying them as NPAs. Normally when a loan is restructured, banks have to classify it as Sub-standard and make suitable provisions. NATIONAL INNOVATION COUNCIL TO SET UP FUND: The National Innovation Council (NIC), a Body set up by the Prime Minister, to promote new ideas for inclusive development has announced the setting up of Rs.1000 Crore Corpus Fund. To start with, the fund will be set up with a corpus of Rs.1000 Crore, which may go up to Rs.5000 Crore. A major portion will come from the private sector and not the Govt. ICICI BANK WINS WORLD FINANCE AWARDS: ICICI Bank has been awarded the World Finance Awards 2010 in three categories. The Categories are- Excellence in NRI Services-Worldwide, Excellence in Private Banking Business-Asia-pacific and Excellence in Remittance Business-Worldwide. The Bank has won the Private Banking and NRI Services awards consecutively for three years and Remittance Award for the second year in a row. SUPREME COURT ON CCI FOR CONFIDENTIALITY: The Supreme Court has ruled that the Anti-monopoly watchdog, Competition Commission of India (CCI) and its probe-wind, the Director General (Investigations) should maintain complete Confidentiality during their investigations into allegations of anti-competitive practices by parties including companies. SUPREME COURT VERSION ON DAILY WORKER: The Supreme Court has ruled that a daily worker who was retrenched violating the provisions of the Industrial Disputes Act can not be ordered to be reinstated; but he can be monetarily compensated. SUPREME COURT RULING ON ORDER WITHOUT REASON: The Supreme Court has admonished the National Consumer Commission for passing orders without giving reasons for its conclusion. Reason is the soul of law, and when the reason of any particular law ceases, so does the law itself. SUPREME COURT VERSION ON ORDERS AFFECTING BANKS: The Supreme Court has allowed the appeal of RBI and observed that a court dealing with bail of bank executives accused of fraud, should not order release of funds. The Supreme Court has said that it was not open to the High Court to pass orders which could affect the working of banks all over the country. RBI SETS UP PANEL ON MONETARY POLICY PROCEDURE: RBI has constituted a Working Group to review the current operating procedure of monetary policy of the RBI including the Liquidity Adjustment Facility. The Working Group will be chaired by Mr. Deepak Mohanty, Executive Director. The proposed terms of reference of the Group are to survey the operating procedures of monetary policy of major Central Banks, RBI, to asses the role of Bank Rate and to examine the role of standing facilities. CBEC NEW RULES ON COURIERS: The Central Board of Excise and Customs (CBEC) has prescribed more rigorous processes for imports and exports through couriers. Now the Couriers have to furnish a security of Rs.10 Lakh for clearance through major International Airports of Mumbai, Delhi, Kolkata and Chennai and Rs.5 lakh at other Airports. Their networth has also been raised to minimum Rs.25 lakh worth of assets. BANK OF BARODA TO TAKE OVER MEMON CO-OP BANK: Bank of Baroda will take over specific assets and liabilities of Mumbaibased Memon Co-operative Bank. This is the second instance of a Public Sector Bank taking over a Urban Co-operative Bank. In 2009, Indian Overseas Bank took over Pune-based Shri Suvarna Sahakari Bank. The Bank has received approvals from the Govt. and RBI. ATM TRANSACTIONS CROSS 10 CRORE: Cumulative monthly transaction volumes recorded by the National Payments Corporation of Indias (NPCI) National Financial Switch (NFS), to which 61,702 ATMs are linked, have crossed the 10-Crore mark for the first time in August 2010. HIKE IN INTEREST RATE ON EPF: Central Board of Trustees (CBT) of the EPFO has decided on a one percentage increase in the subscribers interest rate to 9.5% for 2010-11. The higher interest payout will be financed through a surplus of about Rs.1, 700 Crore in the EPFO Interest Suspense Account, which has accumulated since 1952-53. A one-percentage point hike in interest rate would mean an increase of Rs.1600 Crore on the total interest paid on the approximately Rs.5 lakh Crore Corpus. EXPORTS, IMPORTS AND TRADE DEFICIT POSITION: Imports of India during April-August 2010 grew at 33.1% to $141.9 billion. Exports of the country for the said period grew 28.6% to reach $85.27 billion. Thus Trade Deficit during this period rose to $56.62 billion. Keeping these figures in view, India is heading for a record trade deficit. According to the Commerce Secretary, the trade deficit may shoot up to $135 billion by March 2011. BHARTI AIRTEL GETS RBI NOD FOR MOBILE SERVICES: Bharti Airtel has become the First Mobile Operator in the country to get a licence from RBI to start mobile payment services.. This service will allow Airtel subscribers to exchange physical cash for virtual money which can be stored on mobile phones to pay for goods and services for transaction value less than Rs.5000/-. Once the user loads up his phone with prepaid cash he can walk into specified merchant locations and purchase goods and services. CABINET PAVES WAY FOR OPTIONS TRADING: The Government has initiated a move to promote the Forward Markets Commission as an Autonomous Commodity Market Regulator. FMC as a Regulator will have more powers to regulate market more effectively. At present, it is a Statutory Body under the Ministry of Consumer Affairs, Food and Public Distribution. The passage of the Amendment Bill will also pave the way for options trading in goods and commodity derivatives. MULTI-STATE CO-OP SOCIETIES HAVING MORE FREEDOM: The Multi-State Co-operative Societies can now reduce or eliminate Government control over them by refunding full or part of the share capital subscribed by the government, through a new clause in the MSCS (Amendments) Bill 2010, which has been passed in the Parliament. The MSCS Act of 2002 has been amended to keep in tune with the growing economy and allow MSCS to take advantage of the emerging opportunities. GOVT. AMENDS LABOUR BILL: The Government has decided to replace a Labour Bill introduced in Rajya Sabha earlier with a new simple legislation. The earlier relevant law provided exemption by allowing Very Small establishments (Employing up to 9 workers)
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to maintain only one register and submit one return and Small Establishments (Employing 10 to 19 workers) to maintain three registers and submit one return. The passage of the amendment bill benefit establishments (Employing up to 40 workers) in maintaining registers and submitting returns electronically. PLAN PANEL TO BECOME PAPERLESS BODY: The Planning Commission will become a paperless body, with all official work, right from drafting of proposals to approval of projects and grant of funds, done through computers over an internal network. This will be the first step in an ambitious plan to coordinate the activities of all central departments and ministries by interconnecting them through an online system. The project would be implemented by the National Innovation Council, set up by Prime Minister. UNITED STOCK EXCHANGE (USE) POSTS RECORD TURNOVER ON DAY ONE: USE, the third exchange to offer currency trading commenced its operations with a record turnover of Rs.45, 486 Crore. Trading volume on USE was higher than the highest daily turnover recorded on both MCX-SX and NSE which have been functioning for over two years. REC GETS IFC STATUS: The Rural Electrification Corporation (REC) has been granted the new Infrastructure Finance Company status from RBI which enables the Non-banking Finance Company to take higher lending exposure in projects. Now REC can take an additional exposure of up to 5% and 10% of its owned funds in the case of a single borrower and a Group of borrowers respectively. REC is also eligible for issuance of infrastructure bonds and for raising funds up to $500 million through ECBs in a year. TWO PSU GRANTED MINI-RATNA STATUS: Bharat Pumps and Compressor Ltd and Bridge & Roof Company Ltd. have been conferred MiniRatna Status which is significant for the Central Public Sector Enterprises (CPSEs), because it allows them substantial financial and operational autonomy. Various restrictions like joint venture, recruitment, appointment, promotions have been removed and enhanced powers hve been delegated. RBI FLAT ON BANK INVESTMENTS IN NPCI, USE: RBI has said that Banks investments in the National Payments Corporation of India and United Stock Exchange of India will be excluded from the aggregate capital market exposure ceiling of 40% and direct investment ceiling of 20% of the Net Worth respectively, till they are listed. After listing, the exposure in excess of the original investment would form part of the capital market exposure. RRB FOR BULLET REPAYMENT OF GOLD LOANS: RBI has permitted the Regional Rural Banks (RRBs) to accept bullet repayments against gold loans of up to Rs.1 Lakh. Bullet repayment means that the entire loan amount can be paid back in one shot. It said that the period of loan should not exceed 12 months from the date of sanction. FIIs INVESTMENT CAP HIKED: The FII investment limit on G-secs has been raised to $10 billion from $5 billion and that on corporate bonds stands raised to $20 billion from the earlier level of $15 billion. Further the Government has stipulated for the first time that for G-secs, the incremental limit of $5 billion be invested in securities with residual maturity of over 5 years. On the Corporate Bond side, the incremental limit must be invested in corporate bonds with a residual maturity of over 5 years issued by companies in the infrastructure sector. GOVERNMENT CUTS BORROWING TARGET: As against the earlier planned borrowing level of Rs.1.73 Lakh Crore for OctoberMarch 2011, the Government will now borrow Rs.1.63 Lakh Crore during this period. This decision has been made possible by the windfall revenue from auction of 3G Spectrum. SEBI FIRM ON FII REGISTRATION RULE: According to the SEBI Chairman, October 1 deadline for compliance regarding fresh registration of FIIs will not be extended. The fresh registration is subject to the SEBI directive specifies that both the FII and its subaccounts should contain at least 20 investors with no single investor holding more than 49% of units or shares in the fund entity. In case of more than 49%, the Institutional Investor must itself be a broad-based fund.
August 2010
SBI RAISES FUNDS THROUGH OVERSEAS BONDS: State Bank of India, Biggest Lender of India, has raised $1 billion (Around Rs.4700 Crore) through a five-year senior unsecured bond issue at a fixed coupon rate of 4.5%. The bonds were issued through its London Branch to Investors on July 27. The bonds will be listed on the Singapore Stock Exchange. RBI ON MOBILE BANK BRANCHES: RBI has permitted Scheduled Commercial banks to operationalised mobile branches in Tier-III to Tier-VI Centres as well as in Rural, Semi-urban and Urban centres in the North Eastern states and Sikkim, without its prior approval. Banks have also been permitted to open mobile ATMs at places identified by them without RBIs prior permission. COURT RULING ON OVERDRAFT ACCOUNT: The Bombay High Court has ruled that Taxmen do not have a claim over the bank overdraft facility of a defaulter since the lender does not owe money but has promised a loan for business . By taking an overdraft facility, a Taxpayer becomes a debtor to the bank and hence, no authority has the right to. MOODYS UPGRADES INDIAS BOND RATING; Global rating Agency, Moodys Investors Service has upgraded Indias local currency government bond rating from Ba2 to Ba1. The revised rating, however, is still one notch below the investment grade. The upgrade was prompted by the Governments adoption of a medium term (2010-2015) fiscal consolidation strategy, which is supported by a broadening structural reform programme. LIST OF SICK PSUs MADE PUBLIC: The Government has for the First Time officially carved out a list of sick public sector units in a move aimed at determining the future course of action for these financially troubled units. The Department of Public Enterprises (the Nodal Body for policy formulation for state owned firms) has listed 46 central public sector enterprises as sick and loss making. Another 26 subsidiaries of these firms are also included in the list. BASEL COMMITTEE SOFTENS BANKING CAPITAL RULES: The Basel Committee on Banking Supervision agreed to allow certain assets, including minority stakes in other financial firms, to count as capital. The Committee set a leverage ratio to apply to banks globally for the first time, which could become binding by 2018, pending further adjustments to the method of calculating banks assets. SEBI EXTENDS DEADLINE FOR ASBA IN NFOs: SEBI has extended the deadline for implementing the Application Supported by Blocked Amount (ASBA) facility for New Fund Offers (NFO) to October1,2010. ASBA is a facility wherein money remains blocked in the investors bank account at the time of application and is debited only at the time of the allotment of units. SEBI TO PENALISE NON-PAN INVESTORS: SEBI has decided to penalize errant investors for non furnishing PAN details. The Regulator has decided that Pan-non-compliant demat accounts would be suspended for credit from IPO,FPO, Rights Issue, Offmarket transactions or secondary market transactions with effect from August 16. PFC GETS NBFC-IFC TAG: The Power Finance Corporation (PFC) has received the NBFC Infrastructure Finance Company Status from RBI, a development that would enable it to lend more to core sector projects. PFC can now take up additional lending
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exposure, up to 5% of its owned funds, in the case of a single borrower as well as group of borrowers in the private sector. This status would also allow the company to apply for insurance of Infra Bonds. FMC ORDERS END TO SUB-BROKERS: The Forward Market Commission (FMC) has directed Commodity Exchanges to disallow sub-brokers by whatever names they currently operate. Instead, it has allowed the Exchanges to appoint Authorised Persons either an individual or an entity, to deal with clients on members behalf. It is an important step towards client protection and will bring discipline in the market. PERFORMANCE OF REGULATORS UNDER CAG: The countrys Apex Government Auditor, the Comptroller and Auditor General (CAG) of India, may soon extend its ambit to evaluating not just the accounts of certain regulators, but also their performance. CAG is currently looking into the books of regulators like SEBI and IRDA, but now they want to audit their performance also. LOK SABHA OKAYS BILL TO TRIM GOVT. STAKE IN SBI: The Lok Sabha passed the State Bank of India (Amendment) Bill 2010, which seeks to, among other things, reduce the statutory minimum shareholding of the Central Government in the Bank to 51% from the current level of 55%. The Bill would also pave the way for SBI to issue preference shares and make preferential allotments to raise capital. SUPREME COURT DIRECTION ON DEBT RECOVERY: The Supreme Court has asked the High Courts not to interfere with debt recovery proceedings initiated against defaulters as it would have a grave and adverse impact on the right of the lenders to recover their dues. Alternative remedies available to the borrowers should be resorted to before the High Courts exercise their discretion to interfere with the recovery proceedings. RBI ALLOWS CREDIT DEFAULT SWAPS: RBI has allowed Credit Default Swaps (CDS) only on rated corporate bonds, but did not specify any minimum rating requirements. A CDS is a bilateral contract between the buyer and seller of protection, in which the protection buyer of the CDS makes a series of premium payments to the protection seller and in exchange receives a payoff if a credit instrument (Usually a bond or loan) goes into default. CRISIL LAUNCHES REAL ESTATE RATINGS: CRISIL announced the launch of Real Estate Ratings that will enable buyers to identify and benchmark quality projects. Crisil Real Estate Star Ratings is intended to bring greater transparency to assessing real estate projects. The ratings given would be city-specific and based on five parameters. COs TOLD ON HOLDING PATTERN BY SEBI: SEBI has asked the companies to file henceforth their shareholding pattern one day prior to their date of listing. The companies have to report alterations in capital structure within 10 days of occurrence to exchanges. Hence, a change in shareholding pattern by plus or minus 2 per cent should be updated within 10 days of occurrence, for public dissemination. INDUSTRIAL DISPUTES AMENDMENT BILL: At present, disputes could be adjudicated by the Central Government Industrial Tribunal-cum Labour Court only after a reference is made by the appropriate government. The proposed amendment in Section 2A would enable a workman to directly approach the labour court after filing his grievance before the conciliation machinery to resolve the issue within 45 days. SUPREME COURT RULING ON BANKS DUES: The Supreme Court has ruled that the courts should not normally pass stay orders in cases relating to recovery of dues of banks, financial institutions and secured creditors as they would have serious adverse impact on the financial health of such institutions which ultimately prove detrimental to the economy of the nation. SUPREME COURT RULING ON TRUST MONEY: The Supreme Court has ruled that when two groups in a Trust sue each other, the legal expenses can not be met from the Trust Fund. GOVT. DILUTES MINIMUM PUBLIC FLOAT NORM: The Finance Ministry, as per revised guidelines, has diluted the Minimum Public Shareholding of 25% norm and asked the listed public sector entities to maintain minimum public shareholding of 10% within a period of three years. For the private sector, it shall be 25% over a period of 3 years. The govt. has now done away with the requirement of issuing at least 5% equity every year for meeting the minimum public float norm. CHINA ORDER BANKS TO RECLAIM TRUST LOANS: Chinas Banking Regulator ordered banks to transfer off-balance sheet loans into their books and make provisions for those that may default. Lenders should prepare provisions equal to 150% on potential losses. Larger banks will be required to maintain the mandated capital adequacy ratio of 11.5% and smaller Chinese lenders are required to meet a 10% ratio. PROMOTERS OF NEW BANKS TO BE ALLOWED HIGHER STAKE: According to the discussion paper on entry of new banks in the private sector, released by RBI, to ensure that banks are predominantly Indian owned. Foreign investment including FDI, NRI, FII in new banks could be kept at a suitable level below 50% and locked at that level for the initial 10 years. Currently, the aggregate foreign investment from all sources in private banks can go up to 74% of the paid up capital. IRDA DIRECTIVE ON REFERRAL FIRMS: IRDA has asked insurers not to access the client data base of entities whose turnover is less than Rs.1 Crore and net worth is less than Rs.50 Lakh. IRDA has said that the existing referral entities that do not qualify for sharing data under the new regulations would have to be terminated right away. Under a referral arrangement, insurance companies get the data base of prospective clients for a fee from another company, mainly banks. CHINA OFFERS NEW TAX BREAK FOR OUTSOURCING: China, keen to end Indias dominance in the outsourcing industry has announced that it will not levy operating taxes on offshore service outsourcing business in 21 of its key cities till 2013. The 5% exemption will run from July1 this year until December 31,2013. EXPERIAN CREDIT BUREAU STARTS OPERATIONS: Experian Credit Information Company of India Pvt. Ltd. formally launched its operations and will provide credit reports to lenders and consumers. It is the First Organisation to be awarded a licence by RBI to operate a credit bureau in India under the New Credit Information Companies (Regulation) Act (CICRA) 2005. MERGER OF BANK OF RAJASTHAN WITH ICICI BANK: RBI gave its nod to the merger of BoR with ICICI Bank. All branches of BoR have started functioning as branches of ICICI Bank with effect from August 13.With the addition of 468 BOR branches, ICICI Banks network increases to 2484 branches. COMMITTEE SUBMITS EMPLOYEES PENSION REPORT: The Central Government appointed Expert Committee on Employees Pension Scheme, 1995, submitted its Report on August 15 recommending either the introduction of Provident Fund-cum-Pension Annuity Scheme or modifications in the existing scheme. The pension of persons in the organised sector under the Employees Pension Scheme 1995 was last increased from April1,2000.therafter annual valuations of the Employees Pension Fund have not revealed actuarial surplus, so no relief could be granted by Central Govt. after 2000.
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CHINA OVERTAKES JAPAN-SECOND LARGEST ECONOMY: After 3 decades of spectacular growth, China surpassed Japan in the second quarter to become the Worlds Second Largest Economy behind the United States. Japans nominal gross domestic product for the second quarter totaled $1.288 trillion, less than Chinas $1.337 trillion. Japans annual GDP is $5.07 trillion, while Chinas is more than $4.9 trillion. PLEA OF SUPREME COURT ON NPA RECOVERY: The Supreme Court declined to pass any direction to the Government or Public Sector Banks to recover the huge NPAs, saying there were enough laws to deal with the issue. Supreme Court suggested that the Govt. could consider deploying the Serious Fraud Investigation Office (SFIO) to look into the bad loans of Public Sector Banks, which allegedly amount to over Rs.1 Lakh Crore. MFs TOLD TO ALLOW TRANSFER BETWEEN ACCOUNTS: SEBI has directed AMCs to issue an addendum (latest by October1) and clarify to investors that units of all MF Schemes held in Demat form will be freely transferable from one demat account to another from the date of issue of the above mentioned addendum. The directions would not be applicable to ELSS schemes as they have a lock in period of three years. SEBI WIDENS MF DISCLOSURE NORMS: SEBI has widened disclosure norms for derivative instruments and set exposure limits for Mutual Funds (MFs). The cumulative gross exposure through equity, debt and derivative positions should not exceed 100% of the net assets of the scheme. MFs should not write options or purchase instruments with embedded written options. Exposure is a maximum loss that may occur on a position. The total exposure related to option premium paid must not exceed 20% of the net assets of the scheme. SURPLUS FUNDS TO BE DEPOSITED WITH GOVT.: The Finance Ministry has asked Market Regulator SEBI and Insurance Watchdog IRDA to deposit their surplus funds with the Government. As per Comptroller and Auditor General of India (CAG), this will improve the Regulators accountability to the Exchequer. Public expenditure needs parliamentary approval. So they should deposit their income in the consolidated fund. NEW DEBT VALUATION NORMS: Under the norms, implemented from August 1, Debt Securities with maturity up to 182 days should be valued on their weighted average market price rather than the earlier practice of valuation on an amortisation basis. Liquid funds are open-ended short term debt funds with a maturity of up to 91 days, whereas liquid plus funds have a maturity of over 91 days. REFUND BANKER SCHEME TO BE EXTENDED: The Refund Banker Scheme was started four years ago, when it was introduced in Delhi and Patna. The Scheme is so far available in 15 cities of the country. The Central Board of Direct Taxes has decided to extend the Scheme for tax payers to get refunds directly through State bank of India across the country from August 1. IT Refunds would be made through SBI as it is the Refund Banker for the Department and tax payers are not to go to the tax department.
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DOLLAR BECOMES FUNDING CURRENCY: In the Forex markets, a funding currency is used to finance so-called carry trades. A carry trade involves borrowing in a low yielding currency to buy higher yielding assets elsewhere. High Liquidity, low yields, and low volatility are all desired traits in a funding currency. The Japanese Yen fit all of the attributes for years. The dollar is quickly becoming a funding currency for purchases of higher yielding assets as US Treasury yields slump and the US economic outlook remains uncertain.
July 2010
RBI CLASSIFIES IDFC AS INFRASTRUCTURE CO : IDFC has been classified as an Infrastructure Company by RBI within the overall classification of NBFC. This classification will help the Term lender in accessing cheaper resources. NO RBI APPROVAL WITHOUT DISCLOSURES: RBI has ruled that Foreign Venture capital funds will have to provide their financial statements for Regulatory Approval to invest in India. RBI has sent back nearly a dozen applications of such funds to SEBI as these were not backed by financial statements. CANARA BANK TOPS IN INFRA LENDING: Canara bank has topped the list of Public Sector banks in terms of largest lending to the Infrastructure Sector during 2009-10. Its lending in absolute terms stood at Rs.15,428 Crore for the year. NEW PANEL TO VET FOREIGN HOLDING: Indian companies that have foreign share holders but wish to invest in sectors with cap such as telecom, aviation and single brand retail would be required to disclose their entire shareholding pattern and agreements before a specially constituted committee that would determine and confirm whether it is Indian-owned and controlled and accordingly allow its downstream activities to be treated as Indian. SUPREME COURT RULING ON DISMISSAL: The Supreme Court has stated that in case of corruption or misappropriation by an employee, the only punishment is dismissal. The punishment should always be proportionate to the gravity of the misconduct. It does not matter whether the amount involved was big or small. Any sympathy shown in such cases is opposed to public interest. IRDA ISSUES FRESH GUIDELINES ON ULIPS: IRDA has issued fresh guidelines to bring protection to the policyholders of Unitlinked Insurance Plans. IRDA has capped charges (Reduction in yield) from the sixth year. The capping has been rationalized to ensure that the difference in yield is capped from the fifth year onwards. So far, the cap was applicable only at the time of maturity. AGRICULTURE LOANS EXCEED TARGET IN FY 2010: Agricultural credit flow by Coop and Public Sector Banks exceeded the target by 13% in FY 2009-10. The flow of credit to the agriculture sector increased significantly and Banks have surpassed the target by extending Rs.3,67,000 Crore worth of loans to farmers. INDIA-MEMBER OF FATF ON TERROR MONEY: India has finally become a member of the Financial Action Task Force, which would allow the country to gain easy access to real time exchange of information on Money Laundering and terror Financing. FATF is an Inter-Governmental Body set up by G-7 for creating Global policies/framework to combat money laundering and terror financing. SEBI RELAXES DISCLOSURE NORMS FOR FIIs: SEBI has relaxed the norms for disclosure of securities lent by FIIs to Overseas Entities. FIIs are now required to disclose information on a weekly basis, instead of the current practice of daily disclosures. INDIAS EXTERNAL DEBT : Indias external debt was at $261.4 billion as at end March 2010, recording an increase of $36.9 billion or 16.5% over that in end-March 2009. The long term debt at $209.9 billion and short term debt at $52.4 billion accounted for 79.9% and 20.1% respectively of the total External Debt. PSBs TO FIX THEIR OWN WAGE STRUCTURE: Public Sector Banks may get to decide their own pay structure for their employees (instead of the current industry-level arrangement) if the recommendations of a Govt. appointed panel gets the nod of the Finance Minister. SEBI ORDERS ON PN SHORT-SELLING: SEBI has asked FIIs issuing participatory notes (PNs) to disclose their short-positions on a daily basis instead of a weekly basis which can make PN investment more transparent. Any fresh short-positions shall be immediately to be reported to SEBI. FISCAL AND REVENUE DEFICITS RISE: Indias fiscal deficit shot up to 26.5% of the full year target at Rs.1, 00, 907 Crore by end May 2010 ( Rs.90, 758 Crore or 22.6% of the budget estimate, a year ago). The Centres Revenue Deficit too, was marginally higher and amounted to Rs.81, 220 Crore or 29.4% of the budget estimate by end May 2010 (as compared to 28.6% a year ago). FINMIN FOR BANK COVER FOR CORPORATE BONDS: The Government wants the RBI to allow Banks to guarantee bonds issued by local firms in a fresh attempt to breathe life into the moribund corporate bond market. The Finance Ministry has suggested that with the backing of a guarantee from banks, corporates that may otherwise find it tough to raise funds at competitive rates purely on their own financial strengths, could find the going easier. SBI BRINGS GREEN BANKING TO THE COUNTER: In line with its Go Green Movement, SBI inaugurated a Green Channel Counter at a Chennai Branch where customers make paperless deposits, withdrawals and remittances. Customers need not fill any Pay-in-slips or draw cheques for depositing or withdrawing money from their accounts, saving paper. HSBC ACQUIRES RBS RETAIL BUISNESS IN INDIA: Hong Kong and Shanghai Banking Corporation has agreed to acquire the Indian Retail and Commercial Banking Business of Royal Bank of Scotland for a premium of $95 million over the net asset value of the business. As on March 31,2010, RBS India Business comprised gross assets of $1.8 billion and risk weighted assets of 41.1 billion. ANNUAL PAY HIKE OF CEO, WHOLETIME DIRECTORS: According to the draft guidelines on Compensation of Whole-time Directors and CEOs for Private and Foreign Banks, the annual increase in the fixed pay of CEOs and Whole-time Directors of private Banks should not be more than 10-15%. From now on, Banks will have to take permission from the RBI for the remuneration packages of their Top Management. SBI IN PACT WITH UIDAI: SBI has inked an agreement with Unique Identification Authority of India (UIDAI) to work as Registrar for the UID registration of residents. It has become the First bank to take up registration work for the UIDAI project. As a Registrar, SBI will capture through empanelled enrolment agencies, the biometric characters such as finger prints, iris and so on and send the information to UIDAI. NEW UNIFORM RULES FOR DEMAND GUARANTEES: The Uniform Rules for Demand Guarantees (URDG), International Chamber of Commerce (ICC) Publication Number 758 came into effect from July1, 2010. The ICC has included Model Guarantee and Counter Guarantee Forms and a set of Optional Clauses in a ready-to-use package. HIGH COURT VERSION ON COURT JURISDICTION : The Bombay High Court has held that Civil Courts could not assume jurisdiction in a matter which fell for decision by the Debt recovery tribunal. The jurisdiction of the Civil Court has been expressly barred under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act 2002. CIBIL-DETECT LAUNCHED: CIBIL, has launched CIBIL Detect on 6th July. CIBIL Detect is the First Centralized Repository in India on confirmed frauds, cases of misuse or attempted misuse of data and suspected or high risk cases that are under investigation in
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Banks and Financial Institutions. SEBI LIMITS EXPOSURE MARGIN FOR DERIVATIVES: SEBI has revised exposure margin requirements for exchange traded equity derivatives. Now the exposure margin shall be in excess of 5% or 1.5 times, whichever is higher. The earlier exposure margin requirement was 10% or 1.5 times the standard deviation of daily logarithmic returns of the stock price. KEY RATES OF ECB AND BANK OF ENGLAND: The European Central Bank left interest rates at a record low rate of 1% as rising market borrowing costs and the sovereign debt crisis threatens to derail the regions economic recovery. Bank of England also left its key rate at 0.5%. MINISTRY NOD FOR INFRASTRUCTURE BONDS WITH RIDERS: The Centre has provided, the select financial institutions and companies with an avenue to mop up long- term resources from retail investors, but the permission has come with riders. The volume of issuance during the financial year will be restricted to 25% of the incremental infrastructure investments made by the Issuer during 2009-10. Further the yield on the bond should not exceed the yield on Govt. securities of corresponding residual maturity, as on the last working day of the month immediately preceding the month of the issue of the bond. SBI AND ICICI GET EXTENSION FOR NEW PCR NORMS: State Bank of India has got an extension up to September 2011 for increasing its Provisioning Coverage Ratio (PCR) to 70% of its NPA. The present coverage is 60%. ICICI Bank has also got extension of 6 Months up to March 2011 to reach the required PCR level. Present PCR of the Bank is 59.5%. CHINA FOREX RESERVES RISE SLOWEST IN 11 YEARS: Chinas foreign exchange reserves, the Worlds Largest, rose at the slowest pace in 11 years in the second quarter as expectations for a Yuan appreciation diminished and the European sovereign Debt crisis saw capital move out of emerging markets. The Nations holdings rose by $7.2 billion to $2.454 trillion at the end of June from the end of March. SUPREME COURT VERSION ON BOUNCED CHEQUE: The Supreme Court has ruled that a Director of a company would not be liable for issuing cheques which bounced for want of sufficient funds unless it is proved that he was in charge of and responsible for issuing them. COS E-RETURNS TO HAVE DIGITAL SIGNATURE: CBDT has said that the digital signatures will now be mandatory for all the electronically filed income-tax returns of companies. Before this move, companies could file their electronic returns with or without digital signatures. SEBI FOR NO FRILL DEMAT ACCOUNTS: SEBI has asked Depositories NSDL and CDSL to offer No Frill demat accounts, in an effort to widen the retail investor base in the country. A demat account is one in which an investor holds his shares in the electronic form. The No Frill accounts are targeted at retail investors who do not trade regularly. PANEL TO REVIEW SMALL SAVINGS STRUCTURE: The Government has set up a committee for comprehensive review of the National Small Savings Fund (NSSF) structure, interest rates, tenor and other administrative matters. This committee would be headed by Ms. Shyamala Gopinath, Dy Governor- RBI. NEW INFLATION INDEX BY GOVT: A new system of inflation measurement, under which price changes of about 250 extra items would be covered, is likely to be rolled out by the Government on August 14. The present monthly inflation measurement system, based on the wholesale price index, reflects the price variations of 435 items. The number of items would now go up to 685 and the base year of the new index would also be changed from 1993-94 to 2004-05. RBI WARNS OF MULE ACCOUNTS: RBI has warned people that fraudsters might lure gullible account holders in banks to carry out money laundering. They find these Mule accounts and offer them huge margins for allowing them to use the accounts for transferring funds from one account to another. BSE FUTURES TO LIST ON EUREX: The Bombay Stock Exchange has tied up with the Frankfurt-based Derivatives Exchange, Eurex, to launch sensex futures on options on the Eurex from October 4. The new contracts will be denominated in US dollars and settled in cash. The futures will have expiry dates of the 3 nearest months, and the following March, June, September and December. RUPEE GETS DISTINCT SYMBOL: The Union Cabinet gave its nod to the distinct symbol of Rupee. The winning entry from the IIT Bombay student D Udaya Kumar is a blend of Ra in Devanagri script and R in Roman. Two parallel lines crossing this Ra and R denote the symbol is equal to One Indian Rupee. Other currencies that have symbols are US Dollar, British Pound, Japanese Yen and the Euro. CABINET NOD FOR MERGER OF SB of INDORE WITH SBI: The Union Cabinet gave its nod for merger of State Bank of Indore with State Bank of India. This will be the Second Associate Bank to be merged with SBI over the last 2 years. In 2008, SBI had merged with itself State Bank of Saurashtra. CALL AUCTION ALLOWED: SEBI has allowed the investors to place buy or sell orders on the Stock Exchanges before opening of the trade, a move which could tame volatility in the market. The new mechanism, known as Pre Open Session Call Auction, will last for a duration of 15 minutes and will be introduced on a pilot basis by the BSE and NSE. SEBI NOD TO PHYSICAL SETTLEMENT: SEBI has allowed the two premier Stock Exchanges, BSE and NSE, to introduce a sharebased Settlement-System, also called physical settlement, for futures and options trading in stocks. This has been a long-standing demand from the market participants, mainly to put the Indian F & O settlement system at par with the other developed markets like US, Europe etc. FREE TO DELIST IF PUBLIC STAKE FALLS: Listed companies need to maintain public holding of 25%. But if the shareholding falls below 10% , companies will be free to delist without having to use the reverse book building mechanism. The second offer for delisting the shares could be made at the same as the initial open offer price. EXPORTS-IMPORTS POSITION: Total exports in the first quarter of this fiscal were worth $50.8 billion, up 32.25% over the same period last fiscal, also due to the low base effect. Imports in quarter one were $83 billion, a rise of 34%. Trade deficit in the first quarter has been $32.2 billion. SBI LAUNCHED CSP FACILITY: SBI formally launched the CSP facility, the First in the country. Initially, 20 kiosks, called Customer Service Points (CSPs), were opened in different pockets of Hyderabad targeting the urban poor. The number of CSP in the urban areas would go up to 150 across the country before March 2011. SBI has put in place biometric smartcards to operate the new facility.
June 2010
IT FIRMS CAN OUTSOURCE JOBS TO SEZs: IT Companies can outsource their overseas jobs to units in Special Economic Zones. The Govt. has also allowed employees of IT Units in SEZs to work from Home or off-site locations. Earlier this relaxation was given only to decapacitated employees or those who were travelling. CME TO LAUNCH NIFTY FUTURS: The Chicago Mercantile Exchange (CME) and NSE, entered into an agreement during March
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2010 for cross-listing arrangements. This would be the second exchange after the Singapore Stock Exchange (SGX) to introduce trading on Nifty Futures. CABINET NOD FOR GOVT. STAKE SALE IN PSUs: The Cabinet Committee on Economic Affairs (CCEA) gave its nod for a vital change in the process of shares sale in state-run firms. The appointment of Merchant bankers and other intermediaries will now be taken up simultaneously with the process of seeking CCEA approval as soon as the Minister-in-charge has approved the case. RBI WARNS OF FICTITIOUS OFFERS FROM ABROAD: RBI has cautioned the Public against the fictitious offers for release of cheap funds claimed to have been remitted by overseas entities to banks in India. Once contract is established, the offer is followed by a request seeking of details of Bank Accounts and asking the recipients some amount to be remitted, as initial deposit or commission, so that the money, on offer could be transferred. O&M LAUNCHES ISLAMIC BRANDING PRACTICE: Ogilvi & Mother has launched Ogilvi Noor, a first ever Multidisciplinary Global Islamic Branding Practice that aims to help brands better engage with Muslim Consumers Worldwide. It has also come up with an Index that reflects the appeal of certain brands to Muslim Consumers. SBI OFFERS ONE TIME SETTLEMENT OF NPA: SBI has come out with One Time Settlement Scheme for NPA of SME Sector. The scheme is for loans availed on or after March 31,2009 and with outstanding up to Rs.1 Crore, for any reason except cases involved fraud, malfeasance, willful default or cases already decreed by courts. UN BODY FORECASTS GROWTH: UN Department for Economic and Social Affairs predicted the Global economy to grow by 3% this year and then by another 3.1% the following year in its 2010 World Economic Situation and Prospects report. Indias growth at 7.9% this fiscal has been predicted as against slightly lower than 8.5% predicted by the Government. CENTRALISED TAX PROCESSING CENTRE: The Union Finance Minister has dedicated to the Nation the Income Tax Departments Centralised Processing Centre (CPC) at Bangalore. The CPC will be used to process electronic tax returns from all over the country as also the physical returns of Karnataka and Goa regions. CBDT has also announced plans to set up CPCs in Ahmedabad and Faridabad to improve taxpayer services. RBI RAJBHASHA SHIELD FOR UBI: Union Bank of India has been awarded two First prizes under RBI Rajbhasha Shield Competition 2008-09, which is introduced by RBI for promotional use of Hindi in Public Sector Banks and Financial Institutions. BIOMETRIC CARDS TO NREGA WORKERS: In an innovative move, Biometric cards will be given to those working under NREGA to bring more transparency in the implementation of the Centres Employment Programme, facing complaints of gross irregularities and malpractices in many parts of the country. HIGHER GARATUITY LIMIT: The Parliament in the recently concluded Budget session passed the Payment of Gratuity (Amendment) Act, 2010 to hike the gratuity payment limit to Rs.10 Lakh from existing limit of Rs.3.5 Lakh. The higher limit would be allowed for all gratuity payments made on or after May 24. GDP GROWTH BEATS FORECASTS FOR 2009-10: The strong 4th quarter performance by Industry and Services, coupled with upward revisions for July-December, has led to overall GDP growth of 7.4% in 2009-10. This is higher than the Central Statistical Organisations (CSO) estimate of 7.2%. M & As IN BANKING OUT OF CCI AMBIT: The Corporate Affairs Ministry has said that Mergers and Acquisitions (M&As) in the Banking Sector will be kept out of the Competition Commission of Indias (CCI) ambit for the time being. One of the objectives is to allow enough consolidation to take place in banking. NO BANK LICENCE IF LOAN DEFAULT: Corporate Houses seeking Banking Licences will come under the scrutiny of both RBI and the Finance Ministry, which are keen to restrict the entry of players involved in the dubious transactions. The books and accounts of all Group Companies will be examined before granting the new Banking licence. FM FOR NEW METHOD FOR TAX REFUNDS: According to the Finance Ministry, Tax Payers will have to mention receipt Number of TDS Forms in the returns to claim refunds from this Fiscal. Tax payers will have to mention this number along with his Permanent Account Number (PAN) and Tax Deduction Account number (TAN) of the deductor, otherwise refunds may not be considered. RBI TO HAVE CORE BANKING PLATFORM: Keeping in view the fact that all Commercial Banks are racing ahead to put all their operations on the Core Banking Solution (CBS) Platform, RBI too has decided to embark on the same path. RBI is planning to have its own CBS Platform whereby there will be a Single General Ledger for the entire Bank encompassing all departments and regional offices. RBI PROPOSES MODE FOR EFFECTIVE LOAN SCREENING: RBI, in its draft guidelines for Securitised Transactions by NBFCs, has asked the originators or issuers of securitised products to retain a portion of each securitised pool. This is a Mechanism to improve align incentives and ensure more effective screening of loans. INDIA NOT FOR GLOBAL BANK TAX: Cabinet Finance Minister made it clear in the G20 Summit in Busan that India was not in favour of imposing any special tax on Banks globally to build a corpus to be used for bailing out banks in times of financial crises. India would, instead favour a regulatory mechanism for Banks as is being followed for Indian Banks. PUBLIC HOLDING IN LISTED COMPANIES-AMENDMENT: The Government has amended the Securities Contracts (Regulation) Rules to increase the Non-promoter holdings in Indian Companies. As per amendment, the minimum threshold level of public holdings has been raised to 25% for all listed companies and requiring existing listed companies having less than 25% public holding to reach the minimum 25% level by an annual addition of not less than 5% to public holding. BANKS TO GET TECH SAVVY AS BIG STAFF EXIT: The Government has said the Commercial banks should come up with a strategy to leverage technology and business process reengineering to make up to bridge the gap created by shortage of staff. The Banks must build a pool of talent that can take up Leadership positions. DIVIDEND DISCLOSURE IN RUPEE TERMS: SEBI has asked Fund Houses to disclose their dividend payouts in rupee terms, instead of %age. It also asked Mutual funds to benchmark returns on investment against Sensex & Nifty instead of Sectoral Indices. CAPITAL INFUSION IN FOUR BANKS: The Government has infused Rs.1500 Crore into four Public Sector banks as part of their recapitalization package. Of the total, Vijaya Bank got Rs.700 Crore, UCO Bank Rs.300 Crore, Central bank of India and United Bank of India received Rs.250 Crore each. AHEAD OF BASE RATE BANKS SEEK LEAGAL CHECK UP: Fearing court cases after the implementation of the base rate regime next month, Public sector Banks have decided to go for a legal check on all loan documents signed by them. The Bankers also decided that the borrowers needed to be familiarized with the new regime as over the years they have got used to talking in terms of BPLR Minus rates. IRDA TOUGH WITH CORPORATE AGENTS: IRDA has asked Insurers to carry out inspections on their Corporate Agents to curb
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irregularities. The process of inspections should be completed by September 30 every year starting from 2010. The Insurers should ensure that the policies were being sold only by Licensed Agents or Specified persons and there should be no payments other than permissible commissions. IRDA WITHDRAWS LICENCES OF CORPORATE AGENTS: IRDA has said that 4261 Corporate Agents out of 7000 in the country were not authorised to sell policies from March 31, 2010. These Corporate Agencies were due for renewal on or before March 31, 2010 but have not been renewed and so their licences have been withdrawn. It cautioned the Insurers and General public not to transact any insurance business through them. TAX AUTHORIY TO HIVE OFF E-PAYMENT SERVICES: The Finance Minister has asked the CBDT to consider hiving off its technology-driven taxpayer services to a Special Purpose Vehicle (SPV) that could better deliver such services in the Public-PrivatePartnership (PPP) mode. Presently, the Income tax Department is providing a slew of technology-related services including E-filing of returns, E-payment of taxes. PUBLIC SECTOR BANKS TO RECRUIT MORE: Union Finance Minister has said that Public Sector Banks will need to make large recruitments of the right quality in the next few years to bridge the gap that is likely to be caused by a large number of retirements. The Banks have to strengthen institutional skill levels, specially in the sales and marketing, service operations, risk management and overall organisational performance ethics. FIN PANEL WANTS LISTED DEFAULTERS NAMED: the High Level Coordination Committee on Financial Markets (HLCCFM) is considering mandatory disclosure of loan defaults by listed companies. The HLCCFM is a High-level Forum for interface among financial sector regulators. The move aims to protect shareholders interest and increase investor confidence. SUPREME COURT VERSION ON AMALGAMATED CO.: The Supreme Court has ruled that a Company which has amalgamated with another can evict a Tenant of the old firm from its premises for bona fide requirement of the new Company which has come into existence . ACCOUNTING FOR AGRICULTURE: Accounting for agriculture will change radically when companies will formulate Accounting Policy consistent with IAS-41 equivalent Indian Accounting Standard. IAS -41 requires that a biological asset should be measured on initial recognition and at the end of each reporting period at its fair valueless costs to sell. Similarly, agriculture produce harvested from biological assets should be measured fair value less costs to sell at the point of harvest. FITCH RAISES INDIAS DEBT OUTLOOK: FITCH Ratings revised the outlook on Indias long-term local currency issuer default rating (IDR) to Stable from Negative. But FITCH affirmed Indias Long Term Foreign and Local Currency IDR at BBB, the Short Term foreign Currency IDR at F3 and the country ceiling at BBB. NEW TAX CODE TO CHECK HOT MONEY ENTRY: As per the Revised Discussion Paper of the Direct Tax Code (DTC), Foreign Institutional investors will have to classify income from the capital market transactions as capital gains and not as business income. This move would check hot money flow into Indian markets. NOD FOR SEZ UNIT MIGRATION: The Government has allowed Industrial Units to shift from one Special economic Zones (SEZs) to another after approval of the Apex Authority, the Board of Approval (BOA). Allowing SEZ Units to shift base could help in business consolidation as companies with several units in different SEZs would have the option of bringing them under one roof. IRDA CLERIFIES RBI CIRCULAR: The pricing guidelines pertaining to equity shares, compulsorily convertible preference shares and equity instruments to be issued/ transferred to a Resident outside India notified by RBI are not applicable to the Insurance sector. The guidelines are applicable to an Indian company in Sectors other than financial sector. NEW TAX GRIEVANCE REDRESSAL SYSTEM: The Income Tax department will soon launch an Integrated-based Grievance Redressal System for tax payers to lodge their complaints with Taxman. The new Online Facility will also enable tax-payers to register their complaints and put applications to the IT Ombudsman present in 12 cities across the country. FARM LOANS OUTSIDE BASE RATE: RBI has assured the bankers that it will keep agriculture loans outside the Base Rate ambit, which means Banks will be allowed to extend these loans at interest rates lower than the Base Rate. The Base Rate guidelines have barred lending below the Rate. The Base Rate regime comes into effect from July 1. TIME LIMIT EXTENSION FOR DUTY DRAWBACK: The Finance Ministry has made certain amendments in the Duty Drawback rules. Current rules mandated filing the drawback claim within 3 months from the date of Let Export order by the Customs. The latest amendment allows a further period of 9 months for filing the claim, subject to payment of a nominal fee. MORE SERVICES BY NPCI: National Payments Corporation of India will be providing more services after obtaining RBI approvals. ATM switching was the first service to be operational by NPCI. The next in line is Cheque Truncation System at Chennai. NPCI is the umbrella organisation for all retail payment systems in the country owned and operated by Banks. All Public sector banks are now part of the NFS network. RBI IMPOSES PENALTY ON BANK: RBI has imposed a monetary penalty of Rs.5Lakh on the Postal and RMS Employees Cooperative Bank Ltd. at Ambala Cantt, Haryana for violation of RBI directives. It opened a Branch in New Delhi without obtaining an Authorisation/Licence under Section 23 of the Banking Regulation Act,1949. MORE TIME FOR NEW DEBT VALUATION NORMS: SEBI has postponed the deadline for implementing new norms for valuation of Mutual Fund Houses Debt and Money Market Instruments by a month. The new rules call for these instruments to be valued on Mark-to-Market basis. now the norms will come into effect from August 1 instead of July 1.
MAY 2010 NEW BANK BIPARTITE AGREEMENT: Indian Banks Association and Bank Unions signed a new Bipartite Wage Pact. The total number of employees who are covered under the settlement include 5 Lakh workmen employees and 2.5 Lakh officers working in 26 Public Sector Banks, 12 old Private Sector Banks and 8 Foreign Banks. The Wage Revision is effective from November 2007 for 5 years. BANKS TO PRICE EXPORT CREDIT: RBI has decided to deregulate the interest rates on Pre-shipment rupee export credit up to 270 days and Post-shipment Rupee Export Credit up to 180 days with effect from July 1. Banks will replace extent BPLR system with the Base Rate System from July 1. Banks will be free to decide the lending rate on export credit at or above the Base rate. RBI TO LAUNCH HOUSING INDEX : RBI has initiated an exercise to set up a Housing Start-up Index (HSUI) to track new residential projects in 31 major cities and measure the changes in construction activities. HIGH LEVEL EXPERT PANEL ON PUBLIC EXPENDITURE: An 18 member high level expert committee has been set up under the Chairmanship of Dr. C. Rangrajan, to suggest measures for efficient management of Public Expenditure. The Panel, among other
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matters will define the scope of public sector plan and suggest measures for abolition of the classification of expenditure into Plan and Non-plan. MARKET MAKING FOR SME BOURSE: SEBI has made Market Making mandatory for the proposed Small and Medium Enterprise Exchange. Any member of the Exchange would be eligible to act as a market maker meeting SEBI criteria. There would not be more than 5 market makers for a scrip. IRDA-BENEFIT ILLUSTRATION DOCUMENT: IRDA has told the Insurers to disclose explicitly the commission in the Benefit Illustration document which contains the benefits due to a Policy Holder upon maturity of an insurance policy. WAGE LIMIT FOR AVAILING ESI BENEFITS: To extend the social security benefits to more workers under the ESI Scheme, the Govt has raised the maximum wage limit for availing the facility from Rs.10, 000 to Rs.15, 000 per month. The decision will come into effect from the International Labour Day on May1. FED MAINTAINS KEY INTEREST RATE: The US Federal Reserve has retained the benchmark rate at near-zero level. The Bank has kept rates in the range of 0 to 0.25% since Dec 2008 as part of its efforts to tackle the financial turmoil. ICICI BANK AND HDFC BANK STATUS: The Department of Industrial Policy and Promotion (DIPP) has said that ICICI Bank and HDFC Bank are Foreign-owned and Indian Controlled Banks. ICICI Bank has a foreign shareholding of 66% and HDFC Bank has almost 74%. PUBLIC SECTOR UNDERTAKING -SPMICL FUNCTIONING : Public Sector Undertaking-Security Printing and Minting Corporation of India Ltd. (CPMICL) was incorporated in 2006, following a decision of the Government to corporatize 4 Mints , 4 Presses and 1 Paper Mill , earlier functioning under the direct control of the Ministry of Finance as Industrial Departmental Units. CHINA RAISES BANKS RESERVE RATIO: The Peoples Bank of China raised the Reserve requirement by 50 basis points effective May 10. The current level is 16.5% for the biggest banks and 14.5% for smaller ones. GREECE SEALS RESCUE DEAL: Greece has sealed a deal with the European Union and IMF and the Aid Package, expected to total up to $160 billion over 3 years to make a big debt repayment to its creditors. RBI OPTS FOR BEST HR PRACTICES: RBI is to completely overhaul its promotion and appraisal process. To begin with, the Bank is injecting transparency in the Performance Appraisal System of its officers by allowing them to review their reports. It has also decided to set up a Grievance Redressal Mechanism. OVERSEAS INVESTMENT NORMS FOR NBFCs: RBI has asked NBFCs wanting to make overseas investment to obtain No Objection Certificate from the Department of Non-Banking Supervision (RBI) before making such investment and from the Regional Office in whose jurisdiction the Head Office of the Company is registered. RBI has cautioned that any investment made without clearance is a violation of FEMA 2004 and attracts penal provisions. SEBI ISSUES NORMS FOR CRDIT RATING FIRMS: According to the guidelines issued by SEBI, Credit rating Agencies will have to give granular details about rating movement of issuers from investment to Non-investment Grade and vice-versa at Half-yearly intervals. The Agencies can also give unsolicited credit ratings. SEBI WANTS BANKS TO EXPAND ASBA FACILITY: SEBI exhorted banks to ensure introduction of the Application Supported by Block Amount (ASBA) facility in each branch of the 30 to 40 of the larger cities in the country, which account for 80 to 90% of the IPO market. From May 1, all Institutional Bidders in the Public Issues have to pay full bidding amount upfront unlike in the past when they had to pay just 10%, while the remaining could be paid on actual allotment of shares to them. SUPREME COURT VERSION ON DEBTOR-CREDITOR: The Supreme Court has ruled that the banks and financial institutions can recover its due debt, which accrued during the course of its business activity against any person. It is not necessary that for such recovery, the relationship of creditor and debtor has to be established as it would restrict the meaning of the term Debt under the provision of the Recovery of Debts Due to Banks and Financial Institutions Act 1993. MAHARATNA STATUS FOR 4 STATE-RUN COS.: Govt plans to grant the Maharatna Status to 4 state-run firms-ONGC, SAIL, NTPC and IOC. The tag will allow them to take investment decisions of up to Rs.5000 Crore, independent of the government. All the 4 companies fulfill all the criteria, comprising a 3 year track record of annual net profits of over Rs.5000 Crore, net worth of more than Rs.15,000 Crore and turnover of more than Rs.25,000 Crore, besides being listed on Stock Exchange. FD POLICY FOR URBAN CO-COPs: Presently breaking fixed deposit mid-way and converting it into new term deposit schemes in Urban Coop Banks may invite penalty on the depositors. RBI has now allowed Urban Cooperative Banks to formulate their own policies in this regard . SUPREME COURT UPHELDS MPLAD SCHEME: The Supreme Court has unanimously upheld the MP Local Area Development (MPLAD) Scheme, stating that Parliament has the power to disburse funds under it. Under the scheme, each member of Parliament is provided Rs.2 Crore annually for development of his constituency. MERCHANDISE EXPORTS DOWN IN 2009-10: Indias Exports declined 4.7% in 2009-10 despite a recovery witnessed since Nov 2009. At $176.5 billion, exports last year were lower than $185.3 Billion in 2008-09. NOTE SORTING MACHINES MADE MANDATORY: RBI has made it mandatory for banks in Gujarat to ensure usage of note sorting machines. Lack of proper usage of note sorting machines will attract penalty. During inspections it was observed that many bankers in the State were not using note sorting machines leading to currency management problems. NEW SYSTEM TO RESOLVE INSURACE COMPLAINTS: Currently, the grievance management is done at two levels- the Company Level and at the Ombudsmen appointed by IRDA in different regions. The Consumer Grievance Management System to be introduced by July 2010, will track the complaints being received by the individual insurers through a Real Time Connectivity with their Portals. GOVT. & RBI FOR PLANS OF INCLUSIVE GROWTH: The Finance Ministry has asked Public sector Banks to list their achievements and targets for Financial Inclusion for 2010-11. RBI has asked for Board-approved Plans for Financial Inclusion. The Ministry has asked banks for a Provisional Statement of Intents (SOI) for 2010-11 and the final SOI will go after Board Approval. This is the First time that banks SOI will have such a parameter. SUPREME COURT RULING ON PSBs: The Supreme court has ruled that Public Sector Banks are Instrumentalities of the State and therefore their officers are fully accountable if they jeopardize the interest of the Banks and Public funds.
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FED RESTARTS CURRENCY-SWAP TOOL: The US Federal Reserve will restart its emergency Currency-Swap Tool by providing as many dollars as needed to European Central banks to keep the Continents Sovereign-debt crises from spreading. In the Swap, Central banks exchange foreign currency with an agreement to reverse the transaction at a later date. The Central banks will lend the dollars at fixed rates to firms in their countries. APEX COURT RULING FOR CO. LAW TRIBUNAL: The Supreme Court of India upheld the validity of amendments to the Companies Act 2002 and in effect paved the way for setting up the National Company Law Tribunal (NCLT). It is to take over the functions of BIFR, Appellate Authority for Industrial and Financial Reconstruction & the Co. Law Board, besides that of High Courts in cases relating to winding up of companies. RBI RELAXES ECB NORMS FOR INFRA FINANCE COMPANIES: RBI has allowed Infrastructure Finance Companies (IFCs) to raise funds through External Commercial Borrowings without obtaining the prior approval . IFCs can now raise funds through ECBs up to 50% of their owned funds under the automatic route. Companies raising more than 50% of their owned funds through ECB window would require approval from RBI. ICICI SUFFERS CAPITAL LOSS ON NEW ACCOUNT RULES: New Accounting rules have brought down the capital of ICICI Bank .The Banks Tier-I capital, which comprises equity and free reserves is down by Rs.1,130 Cr for the year ended March 30,2010, due to changes announced by RBI on treatment of Securitisation exposures and Special Reserves. EUROPES ECONOMY GROWS AT FASTER PACE: GDP in the 16 Euro Nations rose 0.2% from the 4th quarter. Economists had forecast growth of 0.1%. Industrial production gained 1.35% in March from February, when it rose 0.7%. RISING DOLLAR AFFECT CHINAS FOREX RESERVES: The strength in the US Dollar reduced Chinas Foreign Exchange Reserves by $48 billion in the first quarter. China previously reported that its foreign exchange reserves, the Worlds Largest, rose by $47.9 billion in the first quarter, but this understated the true reserve growth of $95.9 billion because of currency and asset valuations. GOVT. TO FORM A DEBT ASSESMENT UNIT: The Planning Commission wants the Government to set up a Debt Assessment Unit to specifically focus on the task of reducing public debt, which is hovering at around 80% of the GDP. The 13th Finance Commission had suggested that the Government should try to reduce public debt from around 80% to 68% by 2014-15. SUPREME COURT VERSION ON STOP PAYMENT: The Supreme Court has held that when a cheque is issued, there is a presumption that it is to clear a debt or liability. Whether a cheque bounces due to insufficiency of funds in the bank account of the drawer or whether he issues a Stop payment order to the bank, the consequences under the Negotiable Instruments Act would be the same. BANK OF RAJASTHAN TO MERGE WITH ICICI BANK: Bank of Rajasthan is to be merged with ICICI Bank. The Boards of both Banks granted in-principle approval for the merger. ICICI Bank has said that it has entered into an agreement for amalgamation with BOR with itself with a share swap ratio of 25:118 (25 shares of ICICI for 118 shares of BOR). SEBI RELAXES NORMS FOR SME LISTING: SEBI made public on its Web-site the Model SME Listing Agreement to be executed between the Issuer and the Stock Exchange to list securities on SME Exchange. Certain relaxations have been provided to the Issuers .Companies can send a Statement with salient features of the Annual Report instead of full annual report to their shareholders. They have also been allowed to disclose their financial results every six months instead of three months, as it is norm for bigger companies. NEW TAXPAYER SCHEMES TO BE INTRODUCED: With the present Income Tax Act proposed to be replaced with Direct Taxes Code (DTC), IT Department is planning to introduce a host of services related to processing of tax returns and refunds in the current financial year. The Department will also celebrate 150 years of the introduction of the first ever IT Act 1860, as the Income Tax Day on July 24 this year. This is the last year of the 1961 Income Tax Act. CAG TO AUDIT BANK ACCOUNTS: The Comptroller and Auditor General of India (CAG) will examine books of accounts of Banks and Financial Institutions involved in the Governments Mega Loan waiver Scheme announced two years ago. The CAGs audit into the functioning of the Bank is Unique in the way that the CAG is not mandated to audit accounts of Banks, which falls under the supervision of RBI. CAG -AN UN WFP AUDITOR: The Comptroller and Auditor general of India (CAG) has been selected by the United Nations World Food Programme (WFP) for a 6 year contract to audit its books. The WFP needed to have an external agency to do their audit, CAG has been invited to bid for the audit and against bids from all other countries. RBI FOR SEPARATE LAWS ON ISLAMIC BANKING: According to RBI, current legal and regulatory framework does not support the case of a banking company based on Sharia Principles. But it is possible to set up one through a separate legislation, separate legal and regulatory framework . RBI TARGET-BANKING SERVICES IN ALL VILLAGES: RBI has set a target of extending banking facilities to all villages in the country by 2015 as part of Inclusive Growth. As a first step, RBI has advised banks to extend banking facilities to every village having a population of over 2000 by 2012. SUPREME COURT VERSION ON BOUNCED CHEQUE: Supreme Court has held that if a person convicted for issuing a cheque without balance in his bank account is ordered to pay compensation to the payee, he can be sentenced to imprisonment under Section 357 (3) of the Criminal procedure Code.
April 2010
BONDS FOR INFRASTRUCTURE PROJECTS: The Union Finance Secretary has clarified that only banks and financial institutions will be eligible to raise funds through issue of tax-free bonds for financing infrastructure projects. Private Sector Companies will not be allowed to issue such bonds. CBDT has asked Income tax Authorities to disallow the forex derivative loss claimed by companies on the basis of Marked to Market valuation. RBI WARNS IMPACT OF SLOWDOWN ON BANK PROFITS: RBI has cautioned that the economic slowdown could have a lagged effect on the credit quality and profitability of banks. The very rapid credit growth prior to the onset of the current (Global financial) crisis and the subsequent downturn have put some pressure on the asset quality. SCHEME FOR SBIS ACQUISITION OF SB INDORE: The Draft Scheme on the proposed acquisition of State Bank of Indore by State Bank of India has been modified. The acquisition is now to come into effect from the 30th day after the date of Central
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Government order approving the transaction. CREDIT GUARANTEE COVERAGE TREBLE THIS FISCAL: The number of proposals from entrepreneurs and small businesses guaranteed by the Credit Guarantee Fund Trust for Micro and Small Enterprises will nearly treble in 2009-10 to touch the 150,000 mark. There were 53,708 guarantee approvals in 2008-09. MANDATORY GOVERNANCE NORMS FOR CENTRAL PSUs: The Union Cabinet approved the implementation of guidelines on Corporate Governance for Central Public Sector Enterprises from Voluntary to Mandatory basis. The guidelines cover issues like composition of Board of CPSEs, audit committee, subsidiary companies, disclosures, code of conduct and ethics, risk management etc. RBI FOR TIGHTENING OF RULES FOR CLEARING HOUSES: RBI has said in its Financial Stability report that though the Clearing Houses help in reducing systemic risk posed by derivative markets, they do not make risks disappear. They accumulate a large share of the smaller pool of counter-party risks. Their capital, margining and collateral requirements need to be assessed from a prudential and systemic stability perspective. CREDIT SUISSE GETS RBI IN-PRINCIPLE NOD: In India, Credit Suisse currently operates as an NBFC, which it had acquired in 2008. It has received an In-Principle approval from RBI permitting it to open bank branches in India and offer retail and wholesale banking services. The Licence also permits bank to deal in Govt. securities and other domestic fixed income products and foreign exchange. RBI ALLOWS FCCBs BUYBACK AGAIN: RBI has permitted Indian Companies to buyback their foreign currency convertible bonds (FCCBs) under the approval route till June 30. Indian companies were allowed to buyback their FCCBs both under the automatic route and approval route until December 31, 2009. the scheme was discontinued thereafter. IIFCL KICKS OFF REFINANCING OF INFRASTRUCTURE PROJECTS: India Infrastructure Finance Company (IIFCL) has disbursed Rs.1500 Crore to REC and PFC to refinance the infrastructure projects. Following the global turmoil in 2008, the Government had allowed IIFCL to raise Rs.10,000 Crore in January 2009 for refinancing the infrastructure projects. STANCHART FIRST EVER FOREIGN COMPANY FOR LISTING: StanChart is the First Ever Foreign Company seeking to be listed on Indian Stock Exchange through an Indian Depository Receipts (IDR) Issue. The Bank is looking to raise $500-750 million by issuing 22 Crore IDRs. The amount raised would finally depend on the market conditions and investor demand for the issue. NON-QUOTING PAN TO ATTRACT HIGHER TAX: The Budget 2009-10 had made it mandatory for residents and Non-residents to quote PAN Number or face a higher rate of withholding tax. It comes into effect from April 1. The tax deducted at source or TDS on payments could be as high as 20% for those not quoting PAN against the regular rate of 2%-10%. SEBI FOR QUARTERLY RESULTS BY COMPANIES: SEBI made it mandatory for all listed companies to disclose their quarterly results within 45 days of the quarter end, to disclose their balance sheets every half year as well as make sure that their auditors have been subject to the Peer Review mechanism recommended by the ICAI. ONLINE PAYMENT OF SERVICE TAX: The Central Board of Excise and Customs (CBEC) has made it mandatory for assessees who have paid Rs.10 Lakh or more as service tax for 2008-09 to file returns electronically through internet banking from this year. Notifications also specify the same for Central excise Duty paid to mandatorily file Returns electronically. SEBI CUTS LISTING TIME AFTER IPO: SEBI has made it mandatory for companies to list shares within 12 days after the closure of a Public Issue from existing 22 days. RBI TO BANKS ON RECRUITMENT: RBI has asked banks to ensure that the people they recruit have compassion for the underprivileged and are willing to work in Rural India as its focus is now on achieving 100% Financial Inclusion. In case of PSU Banks, it is mandatory that all employees are posted in Rural branches at least for two years. SEBI EXTENDS ASBA FACILITY: SEBI has extended the Application Supported by Blocked Amount (ASBA) facility to Institutional Investors in Public Issues opening on or after May 1, 2010. So far, only Individual Investors could apply through ASBA, under which money does not leave the Investors account till the shares are allotted. SEBI has already made it mandatory for Institutional investors to pay 100% application money upfront for public issues as against 10% currently. RBIS CAUTION ON PUBLIC DEPOSITS: RBI has cautioned members of the public not to deposit money with unincorporated bodies. Under Section 45-S(1) of the RBI act,1934, unincorporated bodies that are carrying on the business of a financial institution or whose principle business is that of receiving deposits are prohibited from accepting deposits from the public. INDIAS EXTERNAL DEBT UP: Indias External debt as of End-December 2009 had risen by 11.9% to $251.4 billion as against $224.6 billion according to the End-March 2009 estimates. GOVT. UNVEILS CONSOLIDATED FDI POLICY: The Govt has replaced various Press Notes (Laying down rules for FDI), with a consolidated Policy Framework, in a bid to provide a clear understanding of existing regime to the foreign investor. The comprehensive policy document on FDI is a simplified compendium of 118 Press notes, various RBI Circulars and FEMA regulations. GOVT. TO PSU BANKS FOR FINANCIAL INCLUSION: The govt has said the banks to set clear goals for financial inclusion even if it means lower profitability. A total of 6, 50,000 villages are covered under the programme. Out of the 6, 00, 000 habitations in the country, only about 30,000 have a commercial bank branch. Just about 40% of the population across the country have bank accounts. ACCOUNTING NORMS FOR IFRS CONVERGENCE: The CA Institute has modified as many as 7 Accounting Standards to converge them with the existing International Financial Reporting Standards(IFRS). The process of aligning the IFRS would be complete by end June even as the implementation at the Entity level could be staggered depending on the type of the organisation. EDUCATION BECOMES FUNDAMENTAL RIGHT: Education for children between the age of 6 and 14 years has finally become the Fundamental Right, with the Notification of the Right of Children to Free and Compulsory Education Act on April 1. SEBI ISSUES INVESTOR GUIDE TO OFFER DOCUMENT: SEBI has issued the Investor Guide to Offer Document which clarifies that all public issues of over Rs.10 Crore are compulsorily in Demat Mode. It says an issue can be kept open for 3-10 working days, extendable by 3 days in case of a revision in the price band, while Right Issues can be kept open for 15-30 days. SUPREME COURT VERSION ON DISABLED EMPLOYEES: The Supreme court has ruled that the protection for disabled employees under section 47 of the Persons with disabilities (Equal opportunities, protection of Rights and Full Participation) Act is available to only those who are in Public Employment and not in private Companies. ICICI, HDFC BANK SET FOR FOREIGN LABEL: ICICI Bank and HDFC Bank, in which Overseas Investors own more than 51%
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equity, will now be treated as Foreign Banks with the Government having decided finally not to carry out further changes to its new Policy on Overseas investment. PF MONEY PARKED IN CORPORATE BONDS: The Employees provident Fund Organisation will be able to invest its funds in Corporate Bonds of Joint sector companies where the Government has a minimum 26% stake. Till now, EPFO funds were mainly parked in government securities and Bonds of Companies in which Govt. had over 51% stake. SUPREME COURT ON ABSORPTION IN REGULAR SERVICE: The Supreme Court has ruled that merely because the persons were continued as casual or temporary workers beyond the term of their appointments, they would not be entitled to absorption in regular service permanently if the original appointment was not made following a due process of selection. Bank of Baroda has been awarded with the Prestigious Skoch Challanger Award. RBI CEILING FOR OUTSTANDING UNDER MSS: RBI has set the ceiling for the outstanding under the Market Stabilisation Scheme (MSS), for the fiscal year 2010-11 at Rs.50, 000 Crore. The ceiling will be reviewed when the outstandings reach the threshold limit of Rs.35, 000 Crore. The current outstanding balance (Face value) is Rs.2,737 Crore which is due for redemption during the fiscal 2010-11. SUPREME COURT ON BAD DEBT CLAIM DEDUCTION: The Court has ruled that the corporates and banks will not have to establish a debt as Bad Debt in order to claim deduction. The court has said that bad debts written off in the books of accounts of the tax payer is sufficient ground for claiming deduction. EXPORT DUTY SLAPPED ON COTTON: The Government has imposed export duty of Rs.2500 a tonne on raw cotton and 3%of the free-on-board value of cotton waste. The duty comes into effect from April 9. The Centre has stipulated that cotton yarn exports be registered with the Textile Commissioners Office in Mumbai. As per Notification of the Directorate- General of Foreign Trade, no yarn will be allowed for exports until it is registered. INSURANCE COMPANIES IPO NORMS FINALISED: According to the norms finalised for initial public offerings by the IRDA, Life Insurance Companies that have completed 5 years of operations can apply for permission to go to public. COMPLETION OF CBS IN RRBs BY PNB: On the occasion of the 116th Foundation Day Celebrations of PNB, CMD of the Bank said that 100% CBS in all the 6 RRBs with 1408 branches, sponsored by the Bank has been completed. The Milestone has been achieved 18 months ahead of the September 2011 time limit set by the Government. RBIS COMMON SERVICE CENTRES: RBI has permitted J&Ks only listed company, J&K Bank, to utilise the services of its 1109 Common Service Centres as Business Correspondents. It will help the Bank to consolidate its grip in the State at throwaway cost and help total financial inclusion. FRAMEWORK FOR MOBILE BANKING SERVICES APPROVED: The Govt has approved the framework for providing basic financial services through Mobile Phones in a move that will enable millions of people in Rural Areas to get access to banking services. The Framework, developed by an Inter-Ministerial Group, envisages creation of Mobile-linked No Frill Accounts CORPORATE FINANCIAL DISTRESS ON RISE WITH CDR: Since its inception, Corporate Debt Restructuring Cell (CDR) has approved 215 corporate debt restructuring cases with debt aggregating Rs.1, 04, 299 Crore. In the just concluded financial year, 31 corporates with an aggregate debt of Rs.17, 700 Crore received approval for debt restructuring from the Cell. In Feb. 2009, 21 corporates with an aggregate debt of Rs,4000 Crore had landed up at the Cell. SUPREME COURT VERSION ON VOLUNTARY RETIREMENT: The Supreme Court has ruled that a Development Officer of a Nationalised General Insurance Company can not withdraw his offer of Voluntary Retirement Application even if the Management had not accepted it within the time prescribed for the scheme. The court has held that the employment was covered by statutory rules and not by the Law of Contract. RBI ISSUES DRAFT NORMS ON SECURITISATION TRANSACTIONS: RBI has issued draft guidelines regarding the minimum holding period and minimum retention requirement for securitisation transactions. For loans up to 24 months, in case of loans with periodic repayment schedule, minimum holding period would be 9 months from a certain set of relevant dates, while in case of bullet repayment loans, the MHP is 12 months from the relevant dates. In case of more than 24 months with bullet repayment , securitisation would not be allowed. NEW INDEX TO MEASURE RETAIL INFLATION: The Government will release new Retail Inflation Indices for Rural and Urban India in February next year, as it looks to improve the accuracy of figures for informed decision making. The two indices will have 2004-05 as the Base Year. CABINET GIVES NOD FOR CAPITAL INFUSION: The Cabinet gave its nod to infuse Rs.15, 000 Crore in Public Sector Banks during 2010-11 to help them maintain capital requirements and boost their credit growth. The exact amount, mode of capitalisation and other terms and conditions will be decided in consultation with the banks at the time of infusion. BANKS ASKED SECURITY FOR CREDIT CARD OPERATIONS: RBI has made it mandatory for banks and credit card companies to put in place an additional security measures for credit card operations through the Interactive Voice Response (IVR) route from January 2011. Last year RBI had asked banks to introduce an additional security measure for online credit card transactions but had excluded IVR route then.
GENERAL AWARENESS
March 2010
SEZ EXPORTS RISE THIS FISCAL: The Govt has formally approved 582 Special Economic Zones (SEZ), of which 374 SEZs have been notified as on February 17, 2011, and 130 SEZs are operational as on December 31, 2010. Exports from SEZs have recorded a 47% growth during April-Dec 2010 to Rs.2,23,132 Crore from Rs.1,51,785 Crore in the corresponding period in 2009. EXPORT CREDIT POSITION: Export Credit as a percentage of Net banking credit has gradually fallen to 4.1% as on 31.12.2010 from 4.3% as on 26.3.10, 4.6% on March 27, 2009 and 5.5% as on March 28, 2008. However, export credit, in itself, has grown by 11.3% as on December 31, 2010 to Rs.153,794 Crore from Rs.1,38,143 Crore as on March 26,2010. RBI MULLS ISSUING PLASTIC CURRENCY: RBI is planning to introduce, on a pilot basis, Plastic Notes of Rs.10 denomination in the jurisdiction of five out of its 22 Regional Offices. Given that India is a large cash economy and producing such a large amount of
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currency is expensive, RBI is exploring the option for economizing by replacing paper currency with plastic currency as some countries such as Singapore and Australia have already done. IFRS-GOVERNEMNT NOTIIFES ACCOUNTING NORMS: The Corporate Affairs Ministry announced that it has notified all the 35 accounting standards converged with IFRS. These converged standards will be called as IND AS. The date of implementation will be notified by the Ministry at a later date. SEBI SLAPS FINE ON CENTRAL BANK OF INDIA: SEBI has imposed a penalty of Rs.25 Lakh on Central Bank of India for alleged violation of various norms pertaining to debenture trustee. Central Bank of India functioned as debenture trustee for IL&FS even when there was loan outstanding which was also given by the Bank itself. According to norms, no debenture trustee will act for any issue if it has lent the loan and the loan is not fully repaid . SUPREME COURT VERSION ON ARBITRATORS JURISDICTION: Supreme Court has ruled that once an arbitrator was appointed by the Chief Justice under the Arbitration and Conciliation Act, neither party can challenge his jurisdiction. MSME TO GET REFINANCE HELP FROM SIDBI: Micro and Small Enterprises got a boost from the Budget with the Government deciding to provide Rs.5, 000 Crore to Small Industries development bank (SIDBI) for refinancing incremental lending by banks to MSME. Last year the Government had provided Rs.4000 Crore to SIDBI for the same purpose. FIIs ALLOWED TO INVEST MORE IN INFRASTRUCTURE BONDS: The centre has hiked the Foreign Institutional Investors (FII) investment limit in corporate bonds to $40 billion from earlier limit of $20 billion. Prior to this, the total FII investment limit in corporate bonds was pegged at $20 billion, including a $5 billion sub limit for bonds with a residual maturity of over 5 years and issued by companies in the Infrastructure Bonds. SALARIED TAXPAYERS EXEMPTION FILING RETURS: Salaried taxpayers with taxable income of up to Rs.5 Lakh may be exempted from the requirement of furnishing tax returns to the Income Tax Department. To reduce the compliance burden of small taxpayers, Budget 2011-12 has come up with a proposal to empower the Centre to exempt, by notification, any class or classes of persons from filing their tax returns. The amendment will take effect from June 1. DRAFT NORMS ON MERGERS, ACQUISITIONS RELEASED: The Competition Commission of India has released draft regulations pertaining to mergers and acquisition norms. The Draft specifies a fee of Rs.40 lakh payable along with the application form in case of merger and amalgamation or acquiring control over an enterprise. According to the Competition Act, the CCI had a 210 days timeline. RBI TO UPGRADE HIGH VALUE RTGS: RBI plans to upgrade its high-value on-line fund transfer system RTGS to enable handling of up to Rs.50 Lakh transactions a day and incorporate various new facilities for bank customers. Ever since RBI started RTGS system in March 2004, it has been highly successful and a preferred mode of inter-bank transfer of large value funds by customers. The RTGS System, currently, handles about three lakh transactions per day. INDIAS OUTSTANDING LIABILITIES AND GDP: Between 2002-03 and 2010-11, the Centres outstanding liabilities- all forms of internal and external debt on which it incurs interest-have mounted over 2.5 times, from Rs.15,59,201 Crore to Rs.39,31,104 Crore. As a proportion of the countrys GDP, the Centres debt stock has steadily fallen from a peak of 63.5% in 2002-03 to below 50%. The cost of serving the debt, measured by interest payments as a percentage of GDP, has also declined from 4.8 to around 3. FINANCIAL INCLUSION-KEY FOR NEW BANK LICENCE: Private sector players aspiring for banking licences may have to come up with a credible business plan for financial inclusion if their application is to find favour with RBI. This is because the RBI plans to specify financial inclusion plans as a key criterion for granting new banking licences. UNIQUE ID-BASED FINANCIAL INCLUSION MODEL: The National Payments Corporation of India (NPCI) has started field-trials of its Aadhaar(Unique Identification Number-UID) based Financial Inclusion Transaction Model in Jharkhand. This Model allows customers in rural areas to conduct banking transactions with Business Correspondents of any bank using UID authentication. GOVT. NOT TO INTERVENE IN FINANCIAL REGULATORS: The Government will not intervene in the functioning of the Financial Regulators stating that they are working well in their respective domain. At the same time, the respective laws governing RBI, SEBI and IRDA, had a specific provision (Section 3) enabling the Government to issue directions on matters of policy to these 3 financial sector regulators. As regards PFRDA, it was created through an executive order and a bill to provide statutory status is to be introduced. EXTENSION OF ECONOMIC ASSISTANCE SCHEME: The Cabinet Committee on Economic Affairs has approved operating and extending of Indian Development and Economic Assistance (IDEA) Scheme during the period 2010-11 to 2014-15 for both African and Non-African countries. Under the Scheme, Government-supported Exim Bank Lines of Credit (LOCs) are made available to developing countries for support of developmental and other projects as recommended by Ministry of External Affairs. RBI LAST SAY ON BANK M&As: Finance Minister has said that RBI will have the final say on bank mergers and acquisitions (M&A). Banking mergers and acquisitions will not come under the purview of the Competition Act or the Companies Act. The mergers and acquisitions of banks will be under the purview of the Banking Regulations Act. RBI will get the power to approve bank M&As once the Banking Laws Amendment Bill gets enacted. REGISTRATION MUST FOR ALL COMPANIES IN GOODS TRANSPORTATION : The Government has notified that all companies engaged in the business of road transportation of goods, including intermediaries like booking agents, will have to mandatorily register as Common Carriers soon, with the Government. Additionally, they will have to file quarterly returns with the State Transport Authorities, stating the details about freight charges and goods carried. SUPREME COURT VERSION ON CASUAL LABOURERS: The Supreme Court has reiterated that casual workers can not claim regularization merely because they have been working for a considerable period of time. It said that the law consistently laid down by it was that casual employment terminates when the same is discontinued. CAG FOR DIRECTORATE OF SOCIAL AUDIT: The Audit Watchdog, the Comptroller and Auditor General of India has recommended to the States to set up directorates to train auditors from civil society for improving the social audit process in MGNREGA following reports of malpractices and corruption. A nominee of the Government auditor would be present in social audits that Gram Sabha would conduct twice a year. CAG would also do an annual audit as part of its mandate. This exercise would also bring in the new concept of social audit into mainstream. SEBI ALLOWS LAUNCH OF FUTURES CONTRACTS: SEBI has permitted the launch of futures contracts on 91-days treasury bills (T-bills) with immediate effect. The minimum size of the contract is Rs.2 Lakh. The maximum tenor of the contract is 12 months comprising three monthly contracts (near next and far months) followed by three quarterly contracts with March, June, September and December maturities.
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RASTRIYA BIMA SCHEME TO COVER MGNREGS: The Rashtriya Swasthya Bima Yojna may soon be extended to Mahatma Gandhi National Rural Employment Scheme (MGNREGS) workers who have completed 15 days or more during the previous financial year. The premium will be shared between the Central and State Governments in the ratio of 75: 25. The worker will not be required to pay any premium and will have to pay Rs.30 only as registration fee. SUPREME COURT RULING ON ATTACHMENT: the Supreme Court has said that the Government has the power to attach the properties of financial companies who dupe gullible depositors of their money by promising high interest rates, and then disappear even overseas, thereby leaving the depositors and the state police high and dry. GOVERNMENT RAISES TAX LITIGATION BAR: The Government has raised the monetary limits for tax officials to approach courts for dispute resolution. New limits for filing appeals by IT Dept. before ITAT, High Courts and the Supreme Court have been revised to Rs.3 lakh, Rs.10 Lakh and Rs.25 lakh, respectively from Rs.2 Lakh, Rs.4 Lakh and Rs.10 Lakh. The limits for CBEC have been set at Rs.1 lakh for CESTAT, Rs.2 lakh for High Courts and Rs.5 lakh for the Supreme Court. MUTUAL FUNDS EXIT LOAD BALANCES: SEBI, in a circular issued has said that mutual fund houses will now be allowed to dip into their exit load balances, termed Liabilities in the books of their schemes (and not included in the net asset value) and use them for selling and marketing expenses. These expenses would include the distributors commission EXPORTS, IMPORTS AND TRADE DEFICIT POSITION: Exports during April-February 2011 grew a robust 31.4% to reach $208.2 billion, due to diversification to new markets in Asia, Africa and Latin America as well as an increase in the US. Imports during the same period recorded an 19% growth to $305.3 billion taking the Trade Deficit to $97.1 billion. JBIC GUARANTEE TO EXIM BANK OF INDIA: Japan Bank for International Cooperation (JBIC) has provided a guarantee for the Samurai bonds issued by the Exim Bank of India in the Japanese Bond market. This is the first time that JBIC has provided a guarantee for the Samurai bonds of an Indian Issuer. The guarantee covers the principal and part of the interest of privately placed Samurai bonds aggregating to 20 billion Yen. ICICI BANK GETS SOUND MARK REGISTRATION: ICICI Bank has secured a trademark registration for its corporate jingle, which goes Dhin Chik Dhin Chik. The Trademark registry in India has granted registration to ICICI bank Ltd. for its sound mark by registering the very notes that form the jingle. ICICI Bank is the First Indian Entity to obtain sound mark registration. CBDT-NO IT SCRUTINY ON SR. CITIZENS: The Central Board of Direct Taxes (CBDT) has reviewed its scrutiny selection procedure and said that Senior Citizens and individual pax payers whose gross total income does not exceed Rs.10 Lakh will now not face the hassle of an income tax scrutiny. Senior Citizens and small tax payers filing returns on ITR-I and ITR-II will be subject to scrutiny only if the Income Tax Department is in possession of credible information. NPCI TO CHARGE BANKS FOR MOBILE TRANSACTIONS: The National Payments Corporation of India (NPCI) will charge 10 paise to remitting banks for every mobile transaction on the Inter Bank Mobile Payment service (IMPS) from April1, 2011.The fee was fully waived for the current financial year to promote product. However, banks are free to charge their respective customers according to their policies. AMCs TO ISSUE KYC ACKNOWLEDGEMENTS: CDSL Ventures has asked Asset Management Companies and Point-of-service to mandatorily issue KYC Acknowledgement Letters to investors who have made complete submission of their KYC records, after conducting due preliminary checks. SUNAMI TO COST JAPANESE ECONOMY UP TO $183 BILLION: According to the initial estimates by Barclays Capital, the massive tremor may have cost the debt-ridden Japanese economy up to $183 billion or around 3% of the countrys GDP. Bank of Japan offered to inject a similar amount into the economy. The countrys current debt-to-GDP ratio stands at over 200%. PROPOSAL FOR FDI IN LLPs PUT ON FAST TRACK: Limited Liability Partnerships (LLPs) were allowed in India in April 2009. The LLP Act in India is broadly modeled on UK LLP Act 2000 and Singapore LLP Act 2005.At present no FDI is allowed in LLPs. The current policy allows up to 100% FDI in companies but none in partnerships. So far 4085 LLPs have been registered. Now The Government has fast tracked a proposal to allow foreigners to invest in LLPs. RBI MID-QUARTER MONETARY POLICY REVIEW: RBI has raised the Reverse Repo and Repo Rates by 25 basis points to fight inflation, 8th time in last one year. Repo Rate has been hiked to 6.75% and Reverse Repo rate to 5.75%. Inflation remains dominant concern; year-end target upped to 8% from 7% earlier. PF DEPOSITS TO EARN HIGHER INTEREST RATE: Employees Provident Fund Organisation (EPFO) had been paying 8.5% interest on PF deposits since 2005-06. The Finance Ministry has approved the higher interest rate for deposits for 2010-11. After the approval, the Labour Ministry has notified the 9.5% interest rate. CABINET APPROVES PFRDA BILL: The Union Cabinet has approved the tabling of a revised Pension Fund Regulatory and Development Authority (PFRDA) Bill in the current session of Parliament. The Bill basically seeks to grant statutory status to the Pension Sector Regulator, which currently does not have quasi judicial powers unlike RBI or SEBI. ADB SIGNS LOAN PACT WITH GOVT., IIFCL: The Centre, Asian Development Bank (ADB) and the India Infrastructure Finance Company Ltd.(IIFCL) signed a $250 million loan agreement for trenche-2 of the ongoing second India Infrastructure Project Financing Facility. The $700 million multi-trenche financing facility was approved in 2009 to help IIFCL provide long term funding for infrastructure development, with public-privatepartnership projects getting priority. EASIER NORMS FOR GRANTING MAHARATNA STATUS: The Government has relaxed norms for according Maharatna Status to central Public Sector Enterprises which would lead to many more State-owned companies acquiring this tag. The Maharatna Status gives a company more financial autonomy. As per the new guidelines issued by the Department of Public Enterprises, a company qualifying for the Maharatna Status should have an average annual turnover of Rs.20,000 Crore during the last 3 years (Rs.25,000 Crore prescribed earlier). UNION BANK GETS RBI NOD FOR UK SUBSIDIARY: The bank has received RBI approval for setting up a subsidiary in the UK. This will be the First Overseas Subsidiary for the bank. CHINA RAISES RESERVE REQUIREMENTS: China raised Banks Reserve requirements for the third time this year, judging that inflation remains a bigger threat to the Worlds Second Largest Economy than Japans earthquake and nuclear crisis. The requirement will rise to 20% for the nations biggest banks, excluding any extra limits for individual lenders. SHARIAH TAG FOR E-SERIES INSTRUMENTS: To attract the huge pool of investments that generally stays away from financial instruments which give returns not acceptable under Islamic traditions, the National Spot Exchange Ltd. has applied and received certificate from Taqwaa Advisory and Shariah Investments Solutions Private Ltd. (TASIS) for its E-Series products in gold, silver and copper. The Spot Exchange products confirm to Shariah rules as there was no element of interest income and no scope for gambling.
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SERVICE TAX COLLECTION ON ACCRUAL BASIS: The Centre had, in budget 2011-12, announced a shift in the basis of collection of service tax from receipt basis to an accrual basis with effect from April 1. The Finance Ministrys decision to review this move comes in the wake of representations from many industry associations who have suggested that status quo be maintained and service tax collections be continued on receipt basis. ICICI BANK LAUNCHES ONLINE PERSONAL FINANCE SERVICE: ICICI Bank Ltd. launched an online subscription-based personal finance management solution Money Manager for its customers. The solution is designed to help the Banks customers understand their spending habits and organise their finances by providing them with details of all their ICICI Bank accounts on a single platform. INDIA INKS TAX INFORMATION EXCHANGE PACT: India has signed a tax information exchange agreement (TIEA) with Cayman Islands. This is the Fifth TIEA entered into by India in recent times. India has so far signed TIEA with Bermuda, British Virgin Islands, Bahamas and Isle of Man. BANKING LAWS (AMENDMENT) BILL 2011 INTRODUCED: The Finance Minister has introduced the Banking Laws (Amendment) Bill 2011 in the Parliament that will allow the promoters and shareholders of Private Banks to exercise voting rights in proportion to their shareholding. At present, this right is restricted to 10% of the total voting rights of all the shareholders of a banking company. The Govt. has also proposed to raise the ceiling on voting rights of shareholders of Nationalised Banks from 1% to 10%. NEW FINANCIAL REPORTING FORMAT BY COMPANIES: The companies will have to file Annual returns using XBRL (eXtensible Business Reporting Language), a tool fast emerging as the favoured financial reporting format worldwide. CAPITAL INFUSION IN UBI AND ALLAHABAD BANK: Public Sector Banks, United Bank of India and Allahabad Bank have obtained the approval of their shareholders for capital infusion. In a case of Allahabad Bank, an infusion of Rs.670 Crore will raise the Governments stake from the existing 55.2% to 58%. On an infusion of Rs.308 Crore, the same will increase to 85.5% for the United Bank of India against the existing 84.2%. LEGAL FRAMEWORK FOR FACTORING BUSINESS: A bill on Factoring Business has been introduced which would, for the first time, regulate the factoring business in India, besides enabling the factoring companies to obtain legal remedy and claim their rights on the bills (Invoices) factored by them in a more efficient manner. MINI-RATNA STATUS TO NSIC: The Government has conferred the Mini-Ratna II status to National Small Industries Corporation (NSIC), providing it greater financial autonomy. A Mini-ratna II company can incur capital expenditure on new projects, modernization and purchase of equipment without the Government approval up to Rs.150 Crore or up to 50% of their networth. GOVERNMENT BORROWING CALENDAR: RBI and the Finance Ministry have finalised the borrowing calendar for first half of calendar year 2011-12. The Government will frontload its borrowing to allow space for private sector borrowing in the second half of 2011-12. The overall gross borrowing target of Rs.4.17 Lakh Crore for 2011-12 is lower than the borrowing target of Rs.4.57 Lakh Crore set for 2010-11. CENTRALLY SPONSORED SCHEME-PMSGY: Pradhan Mantri Gram Sadak Yojna (PMSGY) is a centrally sponsored scheme to provide road connectivity in the rural areas of the country. PMSGY envisages connectivity in all habitations with a population of 500 persons and above in the rural areas and about 250 persons and above in respect of the hilly states, tribal areas and desert areas through good and all weather roads.
February 2010
Dubai opened a Restaurant 422 metres (1350 feet) up in the sky on the 122nd floor of the Worlds Tallest Building, Burj Khalifa. Colgate-Palmolive (India) Ltd., in association with the Indian Dental Association (IDA) announced that they have achieved a hat-trick of Guinness World Records. Power capacity addition in the 12 months of last fiscal has so far been the Highest achieved in a single year since Independence. Central Bank of India has launched E-stamping services in Delhi. In Delhi, E-stamping is compulsory for payment of stamp duty of more than Rs.500. According to the report of International Labour Organisation, incidence of Vulnerable Employment is Highest in South Asia, including India, with 580 million people in the region falling under the category. Mangalore Devdas Mallya, CMD of Bank of Baroda is the Business Standard Banker of the Year for 2010. The Centre has appointed Mr. U.K.Sinha as the SEBIs next Chairman for 5 years. He is also the Chairman of the Association of Mutual Funds in India. M.S.Ramdorai, former Chief of IT giant firm TCS, has been appointed as an advisor to Prime Minister on skill development. As per RBI Report, the number of complaints received by the Banking Ombudsmen increased by 15% in FY 2009-10 to 79,266 compared with 68,117 complaints received in 2008-09. India and Norway signed a new double taxation avoidance agreement (DTAA) that would, among other things, pave the way for exchange of banking-related information between the two countries for tax administration purposes. According to FITCH Ratings, the outlook on long-term ratings for Indian Banks remains stable in 2011, after a negative bias in 2009 following the credit crises. According to the Global Wind Energy Council, China has the Highest Installed Wind Power Capacity in the World. Beauty Salon Chain Jawed Habib Hair and Beauty filed its draft Red Herring Prospectus for its 60 Crore initial public offering and this is probably the First Hair dressing Company to approach the Indian capital Markets. Axis Bank launched the Countrys First Currency Prepaid Card. Global Information Services Company Experian has launched Hunter, fraud prevention service that allows banks and lenders to detect potential frauds. Expenditure Secretary, Ms. Sushma Nath, has been appointed as Finance Secretary. She is the First Woman Finance Secretary and succeeds Mr. Ashok Chawla who retired on January 31. The Worlds Biggest Wind Tunnel in France can generate a wind speed that is 12 times that of sound. Coal India Ltd. (CIL), Worlds Largest Coal miner, is likely to be conferred with Maharatna status by the end of the month, which will give the company more financial autonomy. The Central information Commission (CIC) has said that the service details of a public servant are not confidential and can be provided to a RTI Applicant.
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As per Global Management Consulting Firm AT Kearneys ranking of the Best Outsourcing Destinations, India remains the Best Outsourcing Destination The British Government has added an additional 800 million to the levy on banks profits this year, which will take the total levy to 2.5 billion for the year. The Union Cabinet approved compensation of Rs.7029 Crore to States for the losses incurred by them during 2010-11as a result of reduction in Central Sales tax rate. Indian companies raised a total of Rs.1,44,693 Crore through private debt placement during April-December 2010, which is 18% higher than Rs.Rs.1,22,167 Crore in the corresponding period last year The Confederation of Indian Industry (CII) launched a Green Rating Framework that will enable companies to take stock of their environmental performance. India Post introduced My Stamp in which one can even get his or her own image printed on a postal stamp to celebrate special occasions such as engagements, birth of baby or to send as greetings. The UK bilateral aid to India will be frozen at its current level of 280 million a year up until 2015, with an increasing emphasis on private enterprise. With Japan releasing its GDP figures, China has been formally accepted as the Second Largest Economy in the world after the United States. Japan has admitted that its GDP stood at $5.4742 trillion, which is less than Chinas National income of $5.8786 trillion last year. According to the Asian Green City Index, Mumbai is one of the Densest cities in Asia with 27,000 people per sq km. The Finance Minister, Mr. Pranab Mukharjee attended the G-20 Finance Ministers and Central Bank Governors Meet in Paris on Feb.18-19. According to the UK Governments plans, Indians and other non-EU citizens entering the UK on a salary of more than 150,000 a year will be exempt from the Governments annual immigration cap. Mr.Jens Weidmann has been chosen to head the German Central Bank. The Government has decided to infuse Rs.1248 Crore into two Public Sector Banks UCO Bank and United Bank of India as part of recapitalization package to shore up capital. London is the Shopping Capital of the World, where the shoppers spent a staggering 64.2 billion in London last year-more than anywhere else on the planet. Chinas Central Bank raised Reserve Requirement Ratio for Domestic Banks by 50 basis points to tackle accelerating inflation and the risk of asset bubbles in the fastest-growing major economy. Maharashtra Government has denotified Mumbai Special Economic Zone near Raigarh, billed as one of the Largest Multi-Product SEZs in the country. South Africa has been formally inducted into the BRIC Grouping, where Brazil, Russia, India and China are in the Group. From now on it will be the BRICS and this will be a key South-South Global Forum. The Government will revise the new consumer price indices, intended to reflect actual movement of prices at the micro level after assessing the expenditure pattern of Indians in 2011-12. Aiming at making cities slum-free across the country, the Centre will soon announce a Rs.6,000 Crore grant for construction of over two lac houses under the Rajiv Awas Yojna as a pilot project. As of December 31, 2010, Foreign Currency Convertible Bonds (FCCBs) redemption profile is-$1.169 billion in 2010-11, $3.622 billion in 2011-12, and $3.757 billion in 2012-13. Thus FCCB Redemption peak is in 2013. The Centre has said that it has detected nine cases for foreign exchange violation relating to unauthorised overseas bank accounts worth about Rs.36,185 Crore in the last three years. According to the National Council of Applied Economic Research (NCAER), Haryana State has been ranked as Number One State in terms of Per Capita Net State Domestic Product at constant prices (1999-2000). The total income tax arrears in the country stood at Rs.2,49,927 Crore on April 1,2010 and CBDT has been asked to monitor all outstanding dues of over Rs.10 Crore. For the First Time in India, the Government will issue coins of Rs.150 denomination marking the number of years (150 years) completed of the Income Tax Department (1860-2010). State Bank of India is the Largest Bank in India, it ranks only 68th among the Worlds Biggies. The Prime Ministers Council on Climate Change has approved the Environment Ministrys National Mission for a Green India, which seeks to improve the density of forest cover over the next decade. According to the Report of the International Service for the Acquisition of Agri-biotech Applications (ISAAA), India has the Worlds Fourth Largest Area under Genetically Modified (GM) crops after US, Brazil and Argentina Dr. Ashok Gulati is taking over as the Chairman of the Commission for Agricultural Costs and Prices (CACP) from March 1,2011.
January 2010
Karur Vyasa Bank has been adjudged the Best Small Bank of the year in survey conducted by business World, in association with Price-Water-house Coopers. India has become the Largest Borrower of the International development Association (IDA) with a total borrowing of $2,578 million. TV Mogul Oprah Winfrey takes the Top Spot on the newly released list compiled by Forbes Magazine, Hollywoods 20 HighestEarning of 2010 with an estimated $315 million. Jailed Noble Peace Laureate Lio Xiaobo marked his 55th Birthday in a prison in Northeast China. The shares of Punjab & Sindh Bank has been listed on the NSE and BSE. It is he last of the Nationalised Banks to get its shares listed in stock exchanges. Mr. Sudhir Chandra has been appointed as Chairman of the Central Board of Direct Taxes (CBDT). According to the financial stability report of RBI, large capital flows into India can create imbalances in the near term if they exceed the absorption capacity of the country. SEBI allowed French institutional investor Societe General to issue overseas derivative instruments, revoking about a year long ban on the foreign institutional investor. Krishna Water Dispute Tribunal, set up in 2004, while giving its Award, has allocated the maximum share of 1001 TMC feet of water from the river to Andhra Pradesh.
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As per RBI Data, home and personal loans constitute 56% of Banks' Retail Portfolio, as of September 2010 while home loans constitute 10% of banks advance portfolio. SBI leads banks in the country in hiking deposit and lending rates in view of the persistent liquidity crunch being faced by the banking system. It marked up its base rate by 40 basis points from 7.60% to 8% and BPLR has been nudged up 25 basis points to 12.75% . The Rashtrapati Nilayam, (Harbal garden) the Presidents estate, will be thrown open for public viewing for the First Time ever. Mr. Nagesh Pydah has assumed the charge of CMD of Oriental bank of Commerce. Mr. Subhir Chandra has assumed the charge of New Chairman of Central Board of Direct Taxes CBDT. The annual average rate of inflation in Sri Lanka was 5.9% in 2010 and is the Second Lowest annual average inflation rate since 1999. Year 2011 is to celebrated as the International year of Chemistry. The year coincides with the centenary year of the Noble Prize for Chemistry to Marie Curie (1867-1934) for the discovery of radioactivity. The National Institute for Interdisciplinary Science and Technology (NIIST), Thiruvanthapuram, has bagged the World Intellectual Property Organisation (WIPO) Gold Medal for its technology for Clean Bio-processing of white pepper from green and black pepper. The Business Expectation Index (BEI), which acts as a barometer of the overall health of the manufacturing sector, is up to 126.5 for quarter October-December2010, its Highest reading since April-June 2007 quarter. Chinese Premier Wen Jiabao had announced that Green GDP would replace Chinese GDP Index to measure the economic performance of the communist nation. The Union Government has excluded the Entire Area of the states of Manipur, Mizoram and Nagaland from the Protected Area Regime under the Foreigners (protected Areas) order 1958. So the foreign travellers will no longer need to obtain Protected Area Permit. The Government of India has declared 2011-12 as Civil Aviation Centenary Year. The celebrations are to begin on February 18, the day on which in 1911, the first commercial plane flew domestically between Allahabad and Naini. Since its inception in 2001, Corporate Debt Restructuring (CDR) Cell has approved 215 corporate debt restructuring cases aggregating Rs.1,04,299 Crore. British Writer Maggie O Farrell was named Novelist of the Year at Britains Costa Book Awards for The Hand That First Held Mine. According to the BVA-Gallup Poll of 53 countries, French are the saddest people in the world while Indians are optimists. IMF expects Indian Economy to grow by 8.8% during the current financial year, up from 7.4% a year ago, mainly driven by robust growth in farm sector and pick up in consumption. United India Insurance CMD, Mr. G. Srinivasan has received the Icon of the Year Award 2011 for his contribution to the Insurance Industry. Indian Opener Gautam Gambhir, picked up by Kolkata Knight Riders (KKR) for a whopping $2.4 million the Highest Bid on the first day of the Indian Premier League-4 (IPL Auction). Indian Bank has been conferred with the Skoch Financial Inclusion Award 2011 for Self-Help Group Initiatives- Urban Financial Inclusion by RBI, in recognition of the services rendered by the bank for the underprivileged and unbanked. Corporation Bank has launched Corp Tutor Fee-a new scheme for financing tuition fees for preparation for entrance examinations of professional courses. Singapore is the Second Largest Source of Foreign Direct Investment (FDI) into India after Mauritius. Singapore was the First Country with which India signed a Comprehensive Economic Cooperation Agreement which helped in more than doubling the bilateral trade since its signing in 2005. United States - Government debt surged to an all time high more than $14 trillion. According to the annual climate summary issued by India Metrological Department (IMD), 2010 was the Indias Hottest Year in recorded history since 2001. EXIM Banks of India and South Korea signed a MOU to promote trade and investment between the two countries. Asian Development bank (ADB) has extended an $89.7 million loan for the Assam Power sector enhancement programme to build two substations. Euro-area finance ministers pledged to strengthen the safety net for debt strapped countries and indicated they dont face pressure for immediate moves to tame the financial crises. China has lent more money to developing nations than the World Bank. China lent at least $110 billion to developing countries in 2009 and 2010 surpassing the $100.3 billion by the World Bank. Dolkar became the First Tibetan to get Indian Citizenship under the Citizenship (Amendment) Act, 1986. Mr. Anand Sinha took over charge as Deputy Governor of RBI. His appointment follows the superannuation of Ms Usha Thorat. Mr. Anil Murarka has been elected as President of the Institute of Company Secretaries of India (ICSI). Indian Bank opened its branch in Jaffna. The bank, at present in Colombo since November 1947, has three International branchesSingapore, Colombo and Jaffna. The World Bank has approved a $250 million loan and a $35 million grant for Pakistan to help vulnerable communities in areas rocked by conflict. This the First time a Serving Three-Star General in the Indian Armed Forces (Lt. General P.K.Rath) has been court-martialled. According to a Report released by UNCTAD, global flows of FDI remained unchanged between 2009 and 2010, at $1.1Trillain. As per RBI Data, the banks have achieved 15 fold increase in Retail Lending. The data shows that banks have extended net loans of Rs.67, 569 Crore in 12 month period ended November 19, 2010 as against Rs.3950 Crore during the same period of 2009. Allahabad Bank will hire 2600 people in 2011-12 while United Bank of India will enroll 1756 employees , in one of their biggest recruitment drives in many years. RBI wants Indian Bank Association (IBA) to set up a training institute to impart forensic investigations skills to bank staff.
December 2010
Foreign Direct Investment in India stood at just $15.97 billion during the Jan- Sep 2010, down 26% vis--vis the same period last year. Somdev Kishore Devaraman became the First Indian ever to win a Tennis Singles Mold Medal in Asian Games History.
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Mobile Number Portability (which allows subscribers to retain their existing mobile telephone numbers when they switch from one operator to another), started in Haryana from Nov 25, 2010. Gazette notification issued by the Government giving voting rights to Non- Resident Indians (NRIs) in the elections. The person will be able to exercise the franchise only if he or she is present in the constituency on the polling day. The Haryana Govt. has imposed a total ban on manufacture, distribution, stocking, selling or using carry bags made of plastic in the State. As per study conducted by Harward School of Public Health (HSPH), the Average Body Mass Index (BMI) of an Indian Woman is 21 and only 15% -aged between 15-49-are overweight. According to the results of the Search Machine, called True Knowledge, April 11, 1954 was the Most Uneventful and Boring Day of the 20th Century. General Motors Cos Initial Public Offering (IPO) became the Worlds Biggest at $23.1 billion. China has introduced its First Ever Electronic Passport that contains microchipped information. ONGC has been conferred the International Partner of the year Award for 2010 in recognition of its achievements through Methane to Market (M2M) programme and mitigation of fugitive emission. Reliance Industries, named among the Worlds Top 20 Chemical Companies in a Global Ranking. Kaziranga (West Bengal) has Highest Tiger Density in the World. As per estimates arrived at by the camera-trapping method, there are 32.64 tigers per 100 sq KM at Kaziranga. IPS Officer Amar Pratap Singh took over as the new CBI Director. A dozen serving women officers have been granted permanent commission in the army for the first time. Till now, only women officers from the non medical streams were allowed to serve for a maxim of 14 years. A new law on recovery of illicit assets of Politically Exposed People (PEP)-Heads of State and Public Officials, will come into force from February 1, 2011. NTPC received the PSU Excellence Award 2010 in the Best Financial Performance category from the Union Minister of Heavy Industries and Public Enterprises. Brazils Central Bank raised reserve requirements on bank deposits, to reduce liquidity in the financial system to slow Latin Americas largest economy where consumer prices have been rising. Tripuras capital Agartala was given the Best City Award among Small States in India for providing homes to the urban poor, by the Union Finance Minister. The Gross NPAs of Public Sector Banks have increased by 30.1% to Rs.57,301 cr in 2009-10 from Rs.44,039 cr in 2008-09. The Board of Directors of IDBI Bank approved the merger of IDBI Gilts Ltd. and IDBI Homefinance Ltd. with itself. Pantaloons Femina Miss India Earth 2010 Nicole Faria of Bangalore was crowned Miss Earth at a ceremony in Vietnam. According to the World Banks Migration and Remittances Fact-book 2011, India continued to be the Largest recipient of Remittances in 2010. According to industry data and the govt., the Philippines has become the Call Centre Capital of the World, overtaking India in the Global Business Outsourcing Market. With IPO of Punjab & Sindh Bank the Governments stake in the Bank decreased from 100% to 82%. ADB sanctioned Rs.422 Crore to Himachal Pradesh Government for development of tourism infrastructure. SEBI has taken the step towards evaluating the feasibility of using the Unique Identification (UID) number for all security market transactions. As per the Opinion Research Consultancy Globascan, for BBC World Service, Corruption/Greed was considered the Most Serious Problem facing the World in 21 out of 27 countries surveyed. IDBI Bank has secured a $100 million ECA (Export Credit Agency) Line of Credit from Germanys DZ Bank, to fund project imports from 24 Western European nations. The World Governments have approved a modest plan to combat climate change, including a new Green Climate Fund to help poor nations. ICICI Bank is to raise $545 million through US Commercial Paper, which will have a maximum tenor of 360 days. The funds shall be utilised for general corporate purposes. 6 Insurance Companies were fined to the tune of Rs.50 Lakh by IRDA during 2009-10 for various violations. IRDA plans to set up an Investors Protection Fund which will work towards protecting the interests of policy holders. 8 Years after it hosted AdAsia in Jaipur, India will host Asias Premier Advertising Event from October 31 to November 3,2011 in Delhi. 8 Life Insurance companies out of 23 in operation have reported profits in 2009-10. The cumulative loss of the Life Insurance Industry as on March 31,2010 stood at Rs.20,143 Crore as against Rs.17,304 Crore in the year-ago period. Indian and Chinese companies signed 48 deals worth over $16 billion in diverse sectors, including power, on the first day of the 3 day visit of the Chinese Premier, Mr. Wen Jiabao. Moodys outlook for Indias banking system continues to be stable but the investment consultancy sees an an increased risk of probable asset bubbles forming and posing a medium-to-longer term challenge for the banking system. India and China agreed to raise bilateral trade to $100 billion by 2015, step up investments and permit banks of other countries to open branches and representative offices. Power Plant Equipment Manufacturer BHEL has received the SCOPE Award for Excellence and Outstanding Contribution to Public Sector management. Britain is the only country in western Europe with rising rates of tuberculosis and in London cases of the diseases have grown by nearly 505 since 1999. Welsh Granny , a Great Grandmother of Britain has become the Worlds Oldest Facebook user at the age of 103, and she updates her status using an iPad. ONGC has emerged as the Top Advance Tax Payer for the current fiscal, dislodging the countrys Largest Commercial Bank, SBI. Indian Railways migrated to a 5-digit number scheme to monitor movement of passenger trains. All trains would be identifiable by a five-digit code, which would be available on the National Enquiry 139. Lunar eclipse coincided with winter solstice after 372 years on 21st December, 2010 (last time it was Dec 21, 1638). Multi Commodity exchange (MCX) will develop commodity derivative markets along with Taiwans Futures Exchange (TAIFEX) in both the countries through sharing of information, technology and other areas of mutual interest. As per Assocham, Karnataka emerged as the Most Preferred Investment destination of India Inc. SEBI has made it clear that Dark Pools can not be permitted in India as there was no transparency in such activities. Sachin Tendulkar struck his historic 50th test century and became the First Batsman to score these many centuries in the 133 year history of test cricket.
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Abbey Road zebra crossing in North London, has been listed as a Heritage Site. India proved to be Londons Biggest Foreign Issuer both on the main market and its small exchange. Mr. Ramu S.Deoria elected as President of the Federation of Indian Export Organisations (FIEO)Appex Body of Exporters. South Africa has been formally asked to join the BRIC Group of emerging markets, comprising Brazil, Russia, India and China, bolstering its position as Africas Champion. South Africa is a powerful country, though it is small compared with the other BRIC nations. National Spot Exchange Ltd. which provides an electronic platform for spot trading in agriculture and non-agriculture commodities, is planning to introduce trading in 17 new commodities. Karur Vyasa Bank adjudged the Best Small Bank of the year in survey conducted by business World, in association with Price-waterhouse Coopers.
November 2010
India and Japan have agreed in principle on an economic partnership accord that will abolish tariffs on 94% of bilateral trade in 10 years. As per RBI Notification, Additional validation is compulsory for all transactions using cards issued in India, for payments on merchant site where no outflow of foreign exchange is contemplated. The Government has appointed Mr. S.K.Roontga, Former Chairman, SAIL, as non-official part-time Director on the Board of Shipping Corporation of India (SCI). The Worlds Most Expansive Car is in India. Bugatti Veyron 16.4 Grand Sport has been launched with price starting at Rs.16 Crore.(Ex-showroom Delhi). India, the Worlds Largest Producer of spices, will showcase its rich produce at the First Indian Spice Festival in New Zealand. A Historic Global Treaty to protect the Worlds forests, coral reefs and other threatened ecosystems within 10 years has been sealed at the UN Summit. A New Global Partnership to help developing countries integrate the economics of ecosystems into National Accounting Systems has been launched by the World Bank. According to the Government Report, US consumer spending rose by less than expected in September as income fell for the first time in 14 months, while inflation remained muted. Association of Mutual Funds in India (AMFI) has decided not to publish Average Assets Under Management (AAUM) on a monthly basis. From the December quarter, AAUM statistics will be available quarterly. The World Bank has granted a $100- million loan to the Maharashtra for implementation of the Maharashtra Agricultural Competitiveness Project, which aims to increase productivity, profitability and market access for the farming community in the state. As per Guinness World Records, an Alsatian cross is said to be the Oldest Dog in the world at 25, an Italian Mongrel. Oil and Natural gas Commission (ONGC) has beaten Chinese rival China National Offshore Oil Corporation (CNOOC) to become Asias Top Oil and gas exploration and the production company. According to the World Bank Report, Worlds Second Largest Economy, China, would likely grow by 10% this year up from an earlier forecast of 9.5%. Next years estimate was lifted to 8.75 from 8.5%. According to the FORBES Magazine, Congress President Sonia Gandhi has been ranked 9th in the list of 10 Most Powerful People in the World. China and India received long-sought recognition as Global Economic Heavyweights as IMF gave them and other emerging powers a significantly larger role in stabilizing the world economy. US and India have given their In-Principle Nod to set up a $10 billion fund to finance Core Sector Projects in India. Since FY 2005 when credit growth touched a high of over 30%, credit off-take declined to a low of 16.6% in the fiscal ending March 2010. According to the Report of Global Energy Research Agency Platts, ONGC has been ranked the Worlds Top Oil and Gas exploration and production. The Lok Sabha cleared the legislation seeking to rename Orissa as Odisha and the language spoken in the state as Odia from Oriya. ICICI Bank has raised $1 billion (appx. Rs.4500 Crore) from Overseas Bonds. The Issue has been made through the Banks Hong Kong Branch. Indias imports of sensitive items, including foodgrains and milk products, have gone up by 25.2% to Rs.28,080 Crore during April-Aug. period of the current fiscal, from Rs.22,429 Crore. Sigapore Exchange (SGX) has admitted the India Infoline Pte, subsidiary of India Infoline as a trading and clearing member. With this IIFL becomes the First India-based Broker to become a member of the SGX. In a bid to help the promoters of small renewable projects enjoy the UN Clean development mechanism (CDM) status and earn Carbon Credits, the Ministry of MNRE has urged the Environment Ministry to work out a concept for such purpose. A recent CB Richard Ellis Group Survey ranked Mumbai and New Delhi at 4th and 11th among the Most Expensive Global Office Markets as of September 30. Mansukhbhai Jagni, Mansukhbhai Patel, Mansukhbhai Prajapati and Madanlal Kumawat are among FORBES list of seven Most Powerful Rural Indian Entrepreneurs, whose Inventions are changing lives of the people across the country. Auditors from IMF and European Union began an audit of the Greek Budget, the outcome of which will determine whether Greece obtains a 9 billion, third instalment of rescue aid from the IMF and EU. According to the latest Survey of Professional Forecasters, released by RBI, the countrys GDP will grow at 8.5% in 2010-11 driven mainly by increased agricultural growth and services in the subsequent years. The Government has received over 1,400 complaints relating to misappropriation and diversion of funds and corruption in the implementation of the ambitious Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) Refudiate a word coined by glamorous US Politician Sarah Palin, has been named 2010s Word of the year by the new Oxford American Dictionary. Tamilnadu has the Highest CD Ratio of over 100%, followed by Maharashtra and Andhra Pradesh with over 90%. Reliance Industries Chairman Mr. Mukesh Ambani has received the Global Vision Award instituted by the Asia Society for helping promote understanding between Asians and Americans. Former President Mr. A.P.J.Abdul Kalam inaugurated the 8th Knowledge Millennium Summit. Mr. P.R.S.Oberoi, Chairman and CEO, EIH Ltd., the flagship company of the Oberoi Group, has been conferred with the 2010 Corporate Hotelier of the World Award by Hotels Magazine. Mr. Resham Singh Sandhu, a prominent Indian Origin multicultural leader has been selected as the new High Sheriff and he will be the First Turban-wearing Sikh in the UK to hold the office of High Sheriff.
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A bill to set up a Biotechnology Regulator to replace the existing multiple mechanisms under different ministries has been approved by the Union Cabinet. Wipro Ltd topped the Carbon Disclosure and Leadership Index (CDLI) in India, introduced for the first time this year by the Carbon Disclosure Project.(CDP), which is a non-profit organisation and claims to own the Largest Database of Primary Corporate Climate Change Information in the World. The Organisation for Economic Cooperation and Development (OECD) cut its Global Growth Forecast for next year. The Global Economy will expand 4.2% next year instead of the 4.5% predicted in May. According to the Time Magazine, Indira Gandhi, Worlds Longest Serving Woman Prime Minister, has been ranked as the 9th in the list of 25Most Powerful Woman of the past century. Following the advice of the Former President A.P.J.Abdul Kalam, Ambedkar Universith, Lucknow decided to do away with the ceremonial gown worn during convocations through ages being British symbol and instead decided to opt for a white colour dress. According to Cigarette Package Health Warnings: International Status Report, India ranks low at 100th among 175 countries surveyed on warning size and fulfillment requirements for picture-based warnings on cigarette packets. SR Foils and Tissue Ltd. received the Best SME of the Year and Best Performing Retail Trading Company of the Year, CNBC TV18s Emerging India Awards 2010. Six months after a slow and fractious negotiation process ended in European Union and IMF bailout of a debt-wracked Greece, Ireland became the Second Euro Zone Economy to need an Emergency Rescue.
October 2010
The Nobel Committee awarded jailed Chinese dissident Liu Xiaobo the 2010 Peace Prize for his long and non-violent struggle for fundamental human rights in China. Dale Mortensen, Peter Diamond and Christopher Pissarides won 2010 Noble Prize in Economics for work helping explain unemployment and job markets. American Richard Heck and Japanese Researchers Ei-ichi Negishi and Akira Suzuki won the 2010 Noble Prize in Chemistry for developing a chemical method that has allowed scintists to test cancer drugs and make thinner computer screens. The British Restaurants have been asked to print calories on menus in the countrys latest move to combat unhealthy eating. Union Bank of India started offering Payment Gateway Solutions to IGNOU, a simplified way of collection of fees from its students across the Globe. The Belgaum Foundry Cluster (BFC) Indias First dedicated cluster for foundries and allied engineering industries will go operational in North Karnataka. Foreign Institutional Investors (FIIs) have poured about $18 billion in Indian stocks so far this year, their highest investment in dollar terms in a calendar year (till Sept 24). According to the 2010 Asia-Pacific wealth Report, total number of High Networth Individuals (HNIs) in India at the end of 2009 was 1, 26,700 with a total networth of $477 billion. Asian Development Bank (ADB) has revised upward its growth projection for the Indian Economy in 2010-11 to 8.5% from 8.2% estimated in April. The GDP growth projection for 2011-12 has been retained at 8.7%. The Board of the Association of Mutual Funds in India (AMFI) has elected Mr. U.K.Sinha as the Chairman of AMFI. Ranjana Sonawne became the First Indian to get the UID (Unique Identification) from the the Prime Minister and UPA Chairperson in Tembhali village in Maharashtra. The Asian Development Bank (ADB) will lend up to $250 million for protection of coastlines in Goa, Karnataka and Maharashtra. 17 New Billionaires joined the Forbes Indias Rich List this year, even as Reliance Industries Mr. Mukesh Ambani topped the list for the third year on a trot. Moodys Rating Agency cut Spains top ranked Aaa rating by a single notch to Aa1, meaning the country will now have to pay more to borrow money on the international markets. China launched its second unmanned lunar probe to test soft-landing technologies as part of its ambitious plans to put a man on the moon in 2013, the same year when India plans to launch Chandrayan-II. The 19th Commonwealth Games started at the Jawaharlal Nehru Stadium Delhi on 3rd October and concluded on Oct 14. Power Grid Corporation of India Ltd. (PGCIL) and Bharat Heavy Electricals Ltd.(BHEL) have bagged Gold Trophies for 2008-09 under the Institutional category in the SCOPE Excellence Awards. The Kandla Port in Gujarat has been adjudged the Major Port of the Year at the Maritime and Logistics Awards,2010, organised by Exim India. Punjab National Bank has received the ICT for India SKOCH Award for 100% computerisation of RRBs. The Planning Commission launched a Web Portal to get feedback on the Approach Paper to 12th Plan as it sought to make the process more inclusive and participatory. Mr. Aditya Puri, MD of HDFC Bank has been Economic Times Biz Leader of the Year. Ms. Indra Nooyi, Chairman & CEO, PepsiCo, Ms. Shikha Sharma, CEO and MD of Axis Bank and Ms. Chanda Kochar, MD and CEO of ICICI Bank are among Forbes 100 Most Powerful women. India has signed First Tax Data Exchange Pact with Bermuda for sharing tax payer information to ensure effective tax administration. According to the Union Power Minister, the Centre has targeted capacity addition of 100,000 MW each in the 12th plan (2012-17) and 13th plan (2017-22) . According to the credit Suisse Research Institute, Indias wealth has tripled to $3.5 trillion in the last decade. In a drive organised by the Live to Love Foundation of the drukpa lineage, 50,033 Ladakhi willows were planted in 33 minutes and 25 seconds, setting a New Guinness World Record. The Planning Commission has ranked Uttrakhand at the First Place among States for their efforts towards environment conservation . Joining a select Club, India has deployed its First Remotely Operated Unmanned Submersible (ROV), key for observation and exploration of mineral wealth in the Central Indian Ocean Basin. India dropped two ranks to 67th among 84 developing nations (Below Pakistan and Sudan) in the Global Hunger Index of the International Food Policy Research Institute. Steel tycoon Lakshmi Niwas Mittal, Chairman and CEO of ArceorMittal, has received the World steel Association Medal. The Medal was first awarded in 1992 and has been presented to 16 recipients to date.
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RBI has said that it will shortly put into circulation coins of Rs.5 and Rs.2 with the theme XIX Commonwealth Games2010 Delhi. After a gap of 19 years, India has been elected as a Non-Permanent Member of the UN Security Council, a position which would help it push more for the reform of the organisation. British Author Howard Jobson has won the prestigious Booker Prize for his comic novel The Finkler Question. It is the first Time in the Awards 42 year history that a comic novel has been voted winner of the 50,000. Harvard University has an endowment of over $25 billion, the Worlds Largest. Astrophysicist Prof. Subrhmanyan Chandrashekhar, who won the coveted Noble Prize for his study of evolution of stars is regarded as One of the First Scientists to combine the study of physics with that of Astronomy. Nearly 63 years after Independence, a village Koparwel situated on a hillock near Indore (MP) got its electricity connection. The total number of patents filed in 2010 globally, is likely to touch 40,000 of which 17% account for Indian applications. Infosys Technologies has launched Finacle Mobile Banking 2.0 solution that enables retail and corporate consumers to access banking services through mobile SMS,GPRS,3G and USSD-enabled handsets. A 200-year old tunnel was unearthed by the workers of the General Post Office (GPO) in its compound at south Mumbais Chhatrapati Shivaji Terminus. According to the Climate Change Vulnerability Index, South Asia is the Worlds Most climate-vulnerable region, its fast growing populations, badly exposed to flood, storms and sea level rise. IRDA has banned further sale of universal life insurance policies after receiving complaints on the sale practices of the insurers. Government of France is going all out to woo investors from India, China, Taiwan and Singapore by initiating tax reform, amending labour laws and offering financial incentives in the form of interest waiver. Prime Ministers National Innovation Council will build a $1 billion Venture-like Fund to finance innovative projects that would bring fruits of development to the the bottom half of the pyramid. Foreign Direct investment (FDI) in August dipped by about 60% to $1.33, the Lowest in this financial year. The Tata Group Chairman, Mr. Ratan Tata, is among eight business leaders from across the world shortlisted by Fortune for its Business Person of the Year2010 Legendary Sitar Maestro Ravi Shankar has been chosen for Cultural Legacy award by Asia Society in recognition of his role in bringing Indian Classical Music to the US. Indias rank in IMF will improve to the 8th position from the current 11th in terms of quota, after the G-20 group reached agreement to reform the IMFs quota and governance system. Russia marked the 50th anniversary of Worlds Most Horrific but long classified space catastrophe when 126 people were burnt alive on October 24,1960.
September 2010
The Lok Sabha passed the Civil Nuclear Liability Bill after 18 amendments were made to the legislation. Bangalore World Trade Centre is the 2nd Centre after 40 years since the First in Mumbai. Most Popular Search Key Word across Asia during the first half of this year on Yahoo Search was Travel. Private Sector Insurer Metlife Persistency Ratio is Highest at 84% while the Industry as a Whole comprising LIC, has an Average Persistency Ratio of 70%. China, after commissioning a new 700,000 kw unit at Xiaowan, has become Hydro Super Power. Chinas Installed Hydro Power Capacity just above 200 million kilowatts is the Worlds Largest. India is now the Largest Petroleum Products Exporter in Asia surpassing South Korea. Govt has agreed to a proposal to introduce Civil Services Aptitude Test (CSAT) in place of Civil services (Preliminary) Examination. An Airline or Travel Agent making a fictitious booking can be punished with a prison sentence of up to 6 months or a fine of Rs. 2Lakh or both. As per Study by Trend Micro, India has retained its Second Position in originating spam, accounting for about 12.55% of the Global Junk mails sent in July. US continues First Position and Brazil has Third Position. Credit rating Agency Moodys has assigned a Bank Financial Strength Rating (BFSR) of C to the State Bank of India. This rating reflects the Banks dominant franchise as the Largest Commercial Bank in India and SBIs sound financial position. Government has reported that the Public Sector Banks wrote off loans worth Rs.10,966 Crore from their books of accounts during the 2009-10 financial year. The six Core industries are-Crude oil, Petroleum refinery products, Coal, Electricity, Cement and Finished Steel. SEBI has barred Brokerage Firms from taking a Power of Attorney that is irrevocable or allows conducting transactions without the consent of the client. India has been the Largest Recipient of World Banks Loans in 2009-10. World Banks loan to India has been $9.3 billion. Second highest recipient, Mexico got $6.4 billion. IDBI Bank has received the Best Public Sector bank Award,2010 in SME Financing from Global Business Information Provider Dun & Bradstreet(D&B). As per the latest Protocol amending the Double Taxation Avoidance Agreement (DTAA) signed between India and Switzerland, only prospective information can be shared, not past information. According to the data released by the European Commission, the unemployment rate across the 16 member Euro zone remained flat at 10%, with the figures rising in Spain to a staggering 20.3%. The Singapore Merchantile exchange (SMX), the First Pan-Asian Multi-Product Commodity and Currency Derivatives Exchange, started operations in Singapore on 31st August. SBI launched a Crorepati-Only Branch in Hyderabad on 2nd September, 2010. the criterion to open an account in the bank is a minimum opening balance of Rs.1 Crore. For the second straight year, transformers Star Shia La Beouf (Los Angeles) topped a Forbes Com List of Hollywoods Best Actors. US trade deficit has narrowed as the gap between imports and exports decreased from $49.9 billion to $47 billion. As per QS World University Rankings, IIT Mumbai emerges the Top Indian Institute though it drops 24 places. Internationally, Cambridge University has pipped Harvard University to secure the First Rank.
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Former Telecom Secretary P.J.Thomas was sworn in as the New Central Vigilance Commissioner (CVC). According to the World Economic Forums Annual Rankings, Switzerland remains the Worlds Most Competitive Economy, while the US has fallen from 2nd to 4th losing the top spot last year. According to the World Investment Prospect Surveys 2010-12, India will be the 2nd Most Popular Destination for Global FDI between 2010-2012. The Forward Markets Commission has granted an in-principle approval for granting recognition to the Universal Commodity Exchange Ltd, Mumbai, as a Nationwide Multi-commodity Exchange. Indian farmers fertilizer Cooperative Limited (IFFCO) has made a provision of spending Rs.100 Crore every year on soil rejuvenation and improvising farm productivity across the country. LIC of India celebrates 54 years of service to the Nation. It has a market share of 71.33% in the first premium income and 71.68% on policies. Tatas was the First Company introducing the concept of per second tariffs in mobile telephony. TTSL has become the 4th Largest Operator in terms of wireless subscribers. Union Cabinet proposes Centralised Monitoring System that can track all communication traffic in the country, providing a onestop solution to many of the countrys internal security concerns. India has done away with the one percent cap on visas being issued for Chinese workers attached to various Chinese projects in the country after streamlining the visa procedures. National Housing Bank has a new CMD Mr. R.V.Verma who was its ED. India ranked IInd in arms transfer agreements with the US during 2006-2009 while Saudi Arabia is the Leading Developing World Arms Purchaser from 2002-2009. Amitabh Bachchan bagged his 4th National Film Award for Best Actor, for his role in Paa, while Amir Khan starrer 3 Idiots bagged the honour for the most popular film. Govt has said that foreign investors in the countrys Real estate Sector will have to remain invested for a minimum of three years, as it is not too restrictive. According to the Report of Boston Consulting Group, Jindal Steel & Power Ltd. has been ranked as the Second Largest Value Creator in the World on the basis of Total Shareholder Return. India and China together account for 32 of the 50 Companies in Forbes Sixth Annual Asias Fabulous 50 Listed Companies. The 11 year old Cow, named Shallow from West Yorkshire Region of England has been named the Worlds Smallest (Roughly 33 inches) by the Guinness World Records. China had the Most Cybercrime Victims, at 83% of web users, followed by India and Brazil, at 76% each, and then the US at 73%. Indias Woman Boxer M C Mary Com claimed a historic 5th successive World Championship Title. Punjab has been awarded the Best Performance Award under the National Food Security Mission for Wheat for 2008-09 from the Union Agriculture Minister. According to the Report of Global Governance 2025, India has been named the Third Most powerful Nation behind the US and China. Bombay Stock Exchange launched Mobile Trading. National Intelligence Grid (NatGrid)- a project proposed by the Home Ministry which will house database intelligence report to counter terrorism. Sir Mota Singh, UKs First Sikh and Asian Judge, knighted by Queen Elizabeth II earlier this year, received the Pride of India Award 2009 . ONGC has dislodged State Bank of India to emerge the Top Advance Tax Payer for the first half of the current fiscal. 4 Indian-Americans, including Sun Microsystems Co-founder Mr. Vinod Khosla are among Forbes 400 Richest People in America, a list topped by Microsoft Founder Mr. Bill Gates. According to Global Alternative Asset Data Provider Eurekahedge, India Index has been the Top gainer among the Geographical indices with 5.7% gain between January and August for Hedge Funds. The underperforming regions are Australia, New Zealand and Greater China. The Cabinet gave its approval for introducing the National Identification Authority of India Bill in Parliament, thus moving a step closer to arming the UIDAI with statutory powers to issue unique identification number.
August 2010
RBI has issued press release that all branches of State Bank of Indore will function as branches of SBI from 30.8.10. According to the Heritage Foundation along with the wall Street Journal, India has ranked 124th in Economic Freedom Index. Mr. Siddhharth Varadarajan, the Chief Bureau, The Hindu, Delhi has won the Ramnath Goenka award for Journalist of the Year(In Print category). On July 24, 2010, the Income Tax legislation in India completed 150 years. This is a big milestone in the history of IT Department. According to Mark Burg, one of the Film Producers, the Saw horror movie franchise is getting a place in the Guinness World Records as the Most Successful Horror Movie Series. Bank of Baroda has signed a MOU with the Unique Identification of Authority of India (UIDAI) and became 5th Public Sector Bank to act as a Registrar fort the project. As per Pearson talent Assessment, in a recent test of English proficiency across BPO Nations, while Philippines tops the board, India ranks Third . According to Mr. T.C.A.Anant, Chief Statician of India, a new series of consumer price index (CPI) will be rolled out in January next year and this will be in addition to the CPI series that are already being released. India and Japan have signed an MOU on the globally acknowledged accounting norm, International Financial Reporting Standards(IFRS). According to the survey by Symantec, the spam levels in Indian Cyber space in Indian Cyberspace is at an all time high, with the country ranking 2nd on the list of spam-originating geo-locations. ICICI Bank has picked up 1.33% stake in United Stock Exchange of India Ltd. (USE), the countrys newest stock exchange. USE is expected to soon launch operations in the currency derivatives market. In a novel initiative, the Government has set up a Community Welfare Fund in 42 Indian Missions Abroad to extend help to the Indian diaspora in times of difficulty .
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The Asian Development Bank (ADB) will grant a loan of $222.2 million to India for constructing and upgrading over 4700 km of rural roads in MP, Orissa, West Bengal and Chattisgarh. Mr. Abhiman Das, Asstt. Advisor in the Deprtment of Statisics and Information management, RBI, has won the prestigious P.C.Mahalanobis Award (Medal) for 2010. Infosys Technologies and Hatton National Bank have announced the implementation of Finacle Universal Banking Solution across the banks operations in Srilanka. According to the new Bill passed by Russian Govt., Russian citizens will be engaged in freelancers to help policemen in their duties. Tejaswani Sawant scripted history by becoming the First Indian Woman to clinch Gold at the World Shooting Championship. Russias record heat wave may already have taken 15,000 lives and cost the economy $15 billion or 1% of GDP, as fires and draughts ravage the country. Asia has overtaken Europe for the First Time in Beer Production. Indias beer production surged by 12.35 last year, Second only to Vietnam among Asian countries. RBI does not seem to be in favour of allowing individuals to promote banks as their experience of over last 17 years has been that banks promoted by individuals, through banking professionals, either failed or merged with other banks or had muted growth. Manmohan Singh has become the Third Longest-serving Prime Minister of India as he completed 2273 days in office on 11th current. Indias First PM Jawaharlal Nehru tops the list at 6130 days while his daughter Indira Gandhi remains Second at 5829 days. Credit Suisse received a licence from RBI to establish a branch in Mumbai. The permit enables to expand the range of services it offers in the Indian market. The total number of branches of all the Life Insurance Companies put together stood at 11,612 as on June 30, 2010, as against 11,796 on June 30, 2009. the Agency force also shrank to 28.62 Lakh from 29.07 Lakh. Google Inc, owner of the Worlds Most Popular Search Engine, bought Jambool Inc, a provider of virtual currency software, as the company steps up acquisitions in social networking. Prime Minister has approved the setting up of a National Innovation Council to prepare a roadmap for the decade of Innovation 20102020. the Council is to be headed by Mr. Sam Pitroda, advisor to PM. According to the Labour Bureaus quarterly survey, employment for the exporting units has increased by 1.87 Lakh during January-March, over October to December 2009. United Stock Exchange (USE) will commence operations in Currency Futures from August 31 in all the four currency pairs allowed by SEBI ( dollar-rupee, euro-rupee, yen-rupee and pond-rupee). Mr. N. Rangachary, Founder Chairman of the IRDA, has been appointed as Chairman of Central Depository Services (India) Ltd.(CDSL). The Lawa Mobile Handset brand has incorporated the Rupee Symbol in latest mobile model-B5., which is also the First Phone with an alpha keypad with keys arranged in ABCD order. Tata Consultancy Services (TCS) is the Largest Private Sector Employer in the country, having 1.64 lakh employees as on June 30. IBM, Infosys and Wipro are next having 1.30 lakh, 1.15 Lakh and 1.13 lakh employees respectively. According to Newsweek Magazines list of 10 World Leaders, described as The leader other leaders love, Prime Minister Manmohan Singh has Topped. However, India stands at 78th place in the list of 100 Best Countries.(HT) The Finance Minister has told State Finance Ministers that they are free to fix their own State GST rates, but would not exercise this freedom after a consensus is reached in the GST Council. SBI Life Insurance has been ranked No1 Life Insurer across the Globe, by the Million Dollar Round Table (MDRT) members. MDRT is an association of the Worlds Best Life Insurance Sales Professionals. Wang Wenxi, 66, an elderly man in China has been awarded a patent for his design of a bed that automatically turns into a strong box in the event of an earthquake. The Telecom Authority of India Ltd. proposes to migrate all fixed-line numbers to a 10 digit series by December 31,2011 in a bid to make available enough numbers to cover the increasing subscriber base. J&K Banks Annual Report 2008-09 has won Three Awards at the Prestigious LACP 2009 Vision Awards-the Worlds Largest Award Programme for Annual reports by California based League, USA. The 15 offices of Banking Ombudsmen located across the country received 6,612 complaints regarding malpractices and unfair trade activities of banks in 2009-10, an increase of around 25% from 5,297 in the previous financial year. India ranks 78th on the Worlds Best Countries list compiled by Newsweek Magazine, which placed nations on the basis of health, education, economy and politics. Former Bureaucrat Mr. Hari Shankar Brahma has been appointed as Election Commissioner. A 1975 IAS Officer of Andhra Pradesh Cadre, Mr. Brahma (60), who hails from Assam, is a former Union Power Secretary.
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July 2010
IDRBT, Hyderabad has picked Karur Vyasa Bank for the Best IT Infrastructure Management 2009 Award. IDBI Bank has been awarded the ISO 9001:2008 Certification for all its Currency Chests in the country. Mr. Rana kapoor, Founder & MD of YES Bank has been given the India Business Leader of the Year Award at the Global Indian Business Meet in Madriad (Spain). Madam Julia Gillard has been elected as Australias First Woman Prime Minister. The Govt has decided to give a freehand to OIL Companies to determine petrol prices in line with the market price. Ethiopia (Africa) is offering one acre of land on annual lease for just $1 for 100 years. International Monetary Fund (IMF) has added Island Nation Tuvalu, located in the pacific Ocean between Hawaii and Australia as its 187th member. Delhi is set to get the Countrys First Commercial Waste-to-power plant of 16 MW capacity, that will convert one-third of capitals garbage into much-needed electricity for 6 Lakh homes. A Spanish precious metals trading company bought the Worlds Largest Gold Coin for $4.04 million. IDBI Bank has been awarded the coveted International Certification ISO 9001-2008 for all its Currency Chests. Central Bank of India is the Exclusive Official Banking Partner for the Commonwealth Games Delhi 2010. India and Canada signed a Civil Nuclear Cooperation Agreement breaking new ground in history of cooperation in this sector. MS. Sonia Gandhi, Chairperson of UPA has launched Worlds Highest Road Tunnel at Rohtang for an all-weather route to strategically important Ladakh and Kargil regions in J&K. According to Amnesty International 95 countries in the world have completely abolished Death Penalty from their Laws. World Bank has approved $430 million (Over Rs.1900 Crore) to finance further improvement of Mumbais Suburban Railway System. FITCH Ratings released a Special Report on the Karnatakas Government Credit Profile and its supported ratings. This is the First Time in India that a Credit Profile of a State Government has been released. According to the data released by Ministry of Tourism, during 2009, the maximum number of foreign tourists came from the US followed by the UK . Mr. R.P. Goenka, Chairman Emeritus of the RPG Group, was presented the Lifetime Achievement Award by the Indian Chamber of Commerce. Mr.Wilco Van Kleef Bolton at 7 feet and his wife Keisha at 6 feet 5 inches are the Worlds Tallest Married Couple from East London. The Couple holds the Guinness World Record. The Govt has proposed to launch an Urban Employment Guarantee Scheme on the lines of NREGA and give statutory sanctions to minimum wages. TansUnion International Inc, a US Headquartered Analytics Company has hiked equity stake in CIBIL to 19.99% from 10% and so now it has emerged the Largest Shareholder in CIBIL. World Banks lending to India for the FY ended June 2010 touched $9.3 billion (Around Rs.42,780 Crore)-an increase of over 320% compared to last year. IMF raised Indias Growth Forecast for 2010 to 9.5%, saying that robust corporate profits and favourable financing conditions are to fuel investments. Govt is planning to transfer food entitlements to Ration-Card Holders through an Electronic System, once the Public Distribution System (PDS) is linked to the Unique ID. According to the US Treasury Deptt, Global Foreign Currency Reserves swelled to $8.1 Trillion by end of 2009, more than replacing the amount drawn down during the depths of the recession. According to a Report by Deloitte, India has been ranked Second, ahead of the US and South Korea in terms of Manufacturing Competence Globally. 8 Indian Companies including Indian oil and Reliance Industries, have made it to the List of the Worlds 500 Largest Companies compiled by Fortune. Corporation Bank operationalised branchless banking units in 1200 villages in the country during 2009-10. Spain won Football World Cup Championship 2010 in Johannesburg. ISRO launched into the orbit its latest high-resolution spacecraft, Cartosat-2B, from Sriharikota spacepad on 12th July, making the IRS the Worlds Largest Civilian Earth Observation Constellation used for various developmental applications. According to Multidimensional Poverty Index, Eight Indian States, including Bihar, UP and West Bengal together account for more poor people than in the 26 poorest African nations combined . Demat Accounts opened with NSDL and CDSL - total active Demat Accounts stood at 160.89 lakh as on Dec.31,2009 and at 170.3 lakh as on June 30,2010. Gujarat is set to take a lead among other Indian States and account for one-third of the target achievement of the National Solar Mission. The Cabinet Committee on Economic Affairs approved a comprehensive and integrated socio-economic development project for Mizoram, involving a cost of over Rs.2,873 Crore over a period of 5 years. Emirates Airlines became the First International Carrier to fly the Worlds Largest Aircraft Airbus A-380 to India landing at the new terminal-3 of Delhis International Airport. Karnataka is set to become the First State in the country to establish an Information Technology Investment Region(ITIR) to promote investment, augment exports and generate employment. Punjab National Bank has been adjudged Indias Best Public Sector Bank for the year 2009-10 amongst 27 Nationalised Banks on the basis of study conducted by a Financial daily along with Ernst & Young. India and Japan have begun a pilot project to test the procedures and systems to evolve a network for Natural Disaster Mitigation and Recovery or DISANET. The IIT Kharagpur has awarded the Honoris Causa Doctrate of Science to HCLs Founder Mr. Shiv Nadar, for his contribution to the countrys computer hardware and software sector . According to the International Energy Agency, China overtook the US as the Worlds Biggest Energy User last year, emphasizing that developing nations are driving global growth . According to the study conducted by IRDA, Bancassurance Channel has a Higher Level of Persistency among all Distribution Channels employed by private life insurers. Union Finance Minister unveiled a three-year plan for moving to a single rate Goods and Services tax (GST) Regime of 16% for the Centre as well as the States. The Centre and the States have agreed to leave out alcohol, petroleum products and electricity duty out of the proposed Goods and Services Tax (GST) System.
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Gujarat continued to maintain its Top Position in Job Placements through Employment exchanges in India-for the seventh consecutive year-in 2009. Cabinet Committee of Unique Identification Authority of India has approved the commencement of Phase-II of the Scheme at an estimated cost of Rs.3023.01 Crore after achieving the targets for Phase-I. Tripura has secured the Top Position in implementation of National Rural Employment Guarantee Act (NREGA) during 2009-10 financial year.
June 2010
With the bearthing of the First Supramax Vessal MV Malavikaat Hazira in District Surat, Essar has become the Second largest Private Port Operator in the country. According to the Study by International Property Consultant C.B. Rechard Ellis, UK is number one Destination for Retailers. India has moved to the 39th position in 2009 from the position of 44 in 2008. Mumbai-based Reliance Big Pictures adventure film, Kites, is First Bollywood Film in US Top 10. US Mathematician John Torrence Tate, received Norways Abel Prize worth 6 million Kroner ($900,000) at a Ceremony in Oslo. Punjab became the First State in the Country to launch Online National Permit for Trucks and heavy Vehicles . Canara bank has informed the BSE that its Equity shares would be delisted from the Bangalore Stock Exchange Ltd. However its Equity shares will continue to be listed with the NSE & BSE which have nationwide trading terminals. RBI has conferred upon Allahabad bank the First prize for its in-house Magazine Triveni Dhara among all Public Sector Banks and Financial Institutions in the Bilingual House Magazine Competition held for the year 2008-09. Three US Scientists whose work helped map the Universe are among the Recipients of the One Million US Dollar Shaw Prize, known as the Asian Noble. The Worlds First Paperless Technology, Entertainment and Design (TED) Event was organised locally by authorised Licence Holders on 31st May in Chandigarh. Allahabad Bank, the Corporate Agent of LIC of India has been awarded First Position in first premium growth rate, based on its performance during 2009-10 amongst all the Channel Partner Public Sector Banks of LIC. Mr. O.P Bhatt, CMD of State Bank of India is set to take over as the new Chairman of the Indian Bank Association. According to the Political and Economic Risk Consultancy, India, Indonesia and Philippines have Asias Most Inefficient Bureaucracies, with Red Tape a constant blight to citizens and deterrent to foreign investment. As per Study by Ernst & Youngs 2010, Rankings of China & India are 66% and 61% respectively as the Most Attractive Regions for FDI Projects in the next 3 years. Indias Fifth Ultra Mega Power Plant will be set up at Sarguja District in Chattisgarh. RBI has constituted a Committee to be headed by Mr. M. Damodaran, previous Chairman of SEBI to look into the various aspects of services rendered by Banks to Retail and Small Customers. Mr. K.G.Balakrishnan, former Chief Justice of India, has been appointed as Chairperson of the National Human Rights Commission. The US-India Business Council has presented its Award for Global Leadership to Mr. Y.C.Desheshwar , Chairman ITC Ltd. for his commitment to empowering Indias Rural Agricultural Community. India Toped the Consumer Greendex, compiled by National Geographic which studied 17000 consumers in 17 countries. Indians are the Most Eco-friendly people while Americans the Least. IDBI Bank opened its First Overseas Branch at Dubai International Finance Centre. The East India Company, which once ruled over India and established in 1600 is one of the Most Recognised Brands in the World and set to launch its First Luxury Goods Store in Mayfair, London. The French Government is selling off 1700 properties including chateaux, barracks and Parisian mansions, in part, to cut the countrys $1.79 trillion debt. Labelling the Bhopal Gas Tragedy as the Worlds Worst Industrial Accident, Global Media has censured the Indian Govt. for a Callous and Confused approach to corporate liability. Over two Lakh employees of State Bank of India will undergo intensive training at various levels in banking technology, e-learning and other areas. Mr. C.S.Verma has taken over charge as the Chairman of Steel Authority of India Ltd. IT major, Tata Consultancy Services (TCS) ranked Fifth Overall, and Toped the List for IT Services in Bloomberg Business weeks 12th Annual Tech 100, a ranking of the Worlds best performing tech companies. Higher Education Regulator, UGC, has issued a ban on offering Physiotherapy courses in Distance Mode because this course involves large component of practical teaching and can not be properly imparted in Distance Mode. Maharashtra accounts for nearly 45% of the countrys tax revenue. The Top Five Indian IT Companies by revenues are-TCS, Infosys, Wipro, Cognizant and HCL. Although India has become synonymous with outsourcing, Indian Companies created nearly 60,000 jobs in the US between 2004 and 2009 through nearly 500 investment and acquisition deals worth $26.5 billion. According to the IMF , with India and China leading the way, the recent recession has underlined the emergence of Asia as a Global Economic Powerhouse. Microsoft Office 2010, latest version of its popular office software went on sale Worldwide. According to the 8th Biospectrum-able Survey for 2009-10, Biocon is once again the Countrys No.1 Biotechnology Company by revenue, while Bangalore has lost the Crown to Mumbai as Biotech City by a revenue margin of Rs.200 Crore. The Union Cabinet has approved the CSIR proposal to set up an Academy of Scientific and Innovative Research (AcSIR). Once the AcSIR is set up, it would enable registration of Scientists pursuing research. The 6th Economic Census set to take off next year, will provide the Country with a National Business Register (NBR) for the First Time, containing the details of every business establishment in the country. India on June 18th successfully test fired the indigenously developed, nuclear-capable, ballistic missile, Prithvi-II from the Integrated Test Range at Chandipur off the Orissa Coast. Haryana claimed to have become the First State in the Country to have launched a web Portal-based Centralised Public Grievance Redress and Monitoring System. According to the Delhis Top Consumer Court, the Bank is justified in closing the account of a customer who fails to provide PAN Card details. Bombay Stock Exchange (BSE) has created a separate Company, called Indian Clearing Corporation in order to consolidate its clearing and settlement business.
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Bhopal (MP) will be Indias First Risk-averse Data Centre which can even withstand an earthquake of seven on the Richter scale for two minutes and remain intact for a nuclear attack. Uttar Pradesh has excelled in a Central Credit Scheme for the Self Employed in the unorganized sector by achieving over 88% of the target. According to a Global Wealth Report, the number of millionaires in India grew by more than a 50% in 2009,after having witnessed a sharp fall in 2008. IDRBT, Hyderabad has picked Karur Vyasa Bank for the Best IT Infrastructure Management 2009 Award. IDBI Bank has been awarded the ISO 9001:2008 Certification for all its Currency Chests in the country.
May 2010
UID RENAMED : The Unique Identification (UID) Project headed by Nandan Nilekani, has been renamed and got new Logo Aadhaar, which means foundation or support. Aadhaar will have two types of identification. The first will be biometric identification with 12 digits having usually fingerprints and iris scan for residents of the country and second will be pin-based process having 4 digits for data base use only. These 4 digits (Hidden Numbers) which the Authority terms Virtual Number will change as and when the resident changes his address. According to the Sunday times, Lakshmi Mittal, the India Born CEO of steel maker ArcelorMittal, has for the 6th year in a row, come on the Top of the list of Britains 1000 Richest people. India has called for reforms in the IMF with at least a 75% shift in the funds quotas from the Developed to Emerging Countries and giving them more seats on the IMF Board. Desginer Giogio Armani formally opened the Worlds First Amani Hotel in the Worlds Tallest Tower, Burj Khalifa. According to Standard & Poors Crisil Survey Report, Equity Funds have the Lowest Rate of Survivorship over a five year period when compared to other fund categories. The Economic Times initiative to provide a platform for future entrepreneurs has won the Best of Show Award at the International News-media Marketing Association Awards 2010in New York. The Government will come out with New Inflation Index by July with 2004-05 as the Base Year. At present the base Year for Wholesale Price-based inflation is 1993-94. US GDP expanded at a 3.2% pace marking three straight quarters of growth as the economy climbs out of the worst recession since the 1930. Sachin Tendulkar is widely regarded as one of the Worlds Greatest batsmen and he is also the First Indian Sportsman to have a Waxwork Figure at Londons famous Madame Tussauds Museum. On the lines of Emissions Trading, Govts new Scheme 'Perform, Achieve & Trade' (PAT), those managing to better their targets will be allowed to sell Energy Saving Credits to those failing to achieve the required cuts. South Korea, Japan and China agreed to launch a $700 million Regional Credit Fund in a bid to help develop Asias Bond Market. The Foreign Direct Investment (FDI) for the whole fiscal 2009-10 fell to $25.89 billion from $27.30 in the previous fiscal 2008-09. Indian-Born Business Administration Scholar Dr. Nitin Nohria is set to become the 10th Dean of Horward Business School. The Govt has said that Foreign Direct Investment (FDI) will not be allowed in housing projects for urban poor. The Cabinet Committee on Infrastructure approved expansion of 12 National highway projects and development of a multi-purpose berth at Paradip Port at a total cost of around Rs.14,000 Crore. According to a survey by Nielsen, Consumer Confidence was Highest in India, in March, followed by Indonesia and Norway. Savitri Jindal at 60, widow of the Founder of steel and power conglomerate OP Jindal Group, has 9 children, the Most of any Woman Billionaire in a long list of 70 Mothers from around the World. FITCH has improved Outlook for Indian Banks while downgrading the ratings for Chinese Banks for the financial year. Italy is holding its First Divorce Fair, offering services such as life coaching and beauty advice to a booming number of separating couples in the Catholic Country. The latest results of nearly 1100 companies paint quite a bright picture of India Incs earnings, showing an impressive 28.5% Net Profit growth and 31% expansion in sales in March Quarter, over a year ago. Euro has already depreciated by over 11% since January against the Dollar (From$1.44 to $1.27). Against the Rupee, the Euro has depreciated by over 13% (From Rs.66.48 to Rs.57.81). Investment in New Projects in the Country dropped 23% to Rs.6,56,629 Crore in Fiscal 2009-10 impacted by the economic Downturn and drying up of foreign funds. As a new system of comprehensive Public Disclosures, introduced in January, IRDA has said that there is no need for separate filing of Quarterly Financial Statements. UP has Topped the list of States in recovery of Fake Currency with a face value of over Rs.2 Crore by different government Agencies during 2009. The Finance Bill,2010 has been enacted into Law, with the President, giving her assent to the Bill. According to TripAdvisor, a popular Travel Guide, Munnar, the Picturesque Hill Station in Keralas Idukki district, has been rated as the Second Best Asian Tourism Destination after Tokio. Chandigarh has been adjudged the Best City in terms of Quality of Sanitation piping. Mysore, Surat, New Delhi and Delhi Cantt that occupy consecutive positions in a descending order. The country added 39 MW to Hydel Power Generation Capacity in 2009-10. Mr. Cameron,43 will be UKs Youngest Prime Minister. He heads the Coalition Government UK has not seen since Winston Churchills during the second world war. India Infoline has received provisional approval from the Colombo Stock Exchange (CSE) to begin stock broking activities in Sri Lanka. Among the 200 Best Asian Universities, the University of Hong Kong retains the Top Slot this year too. The Governments Eco-Mark Scheme with Environment-friendly products has failed to take off even after 20 years of its launch. Till date, only 20 licences have been granted to 15 companies across four product categories against 16 notified. Australian School Girl Sailor Jessica Watson sailed into history, becoming the Youngest Person to circumnavigate the Globe Solo, non-stop and without help. Four Indian Students were the Recipients of the Prestigious Intel Science and Engineering Fair 2010 Awards at an Event held at Silicon Valley-US The Tata Group Chairman, Mr. Ratan N. Tata, received 2010 CIF Chanchlani Global Indian Award for his outstanding Global Leadership and Professional excellence. The countrys Top 13 Cities, including Delhi, will see implementation of stricter Bharat Stage III Emission Norms for two and three wheelers from April 1 2010, while rest of the Nation will adopt it from October 1.
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Nuclear-capable Agni-II Ballistic Missile, with a stroke range of 2000 km was successfully test-fired on 17th May during a usertrial by the Strategic forces from the Wheelers Island Off the Orissa Coast. Singapore, Hong Kong and the US have taken the Top Three Slots in the IMD World Competitiveness Yearbook 2010. The Finance Ministry has approved LICs Jeevan Akshaya-VI Plan as an Annuity Plan eligible for income tax benefits. A Library Book borrowed by the First US President, George Washington, has been returned to a New York Citys Oldest Library, 221 years later. Britain posted its Largest April Budget Deficit (10 billion pounds, shortfall compared with 8.8 billion Pounds)) since monthly records began in 1993, highlighting the scale of the squeeze to come. Mr. Jordan Romero, 13 year old American boy, became the Youngest Ever Climber to conquer Mountain Everest, Worlds Highest Mountain. The accent has put Romero one step closure to reaching his goal of climbing the Highest Mountains on all seven continents.
April 2010
The government has constituted a Group of Ministers headed by the Finance Minister, Mr. Pranab Mukharjee, to resolve differences over mixing ethanol extracted from sugarcane in petrol. Maharashtra is all set to become the First State in the Country to introduce Biometric Ration Cards in order to prevent the use of bogus cards. The Centre has appointed MR.T.C.A.Rangnathan as Chairman of Exim Bank of India. Mission Clean Ganga, which aims to clean up the National River by 2020 has received a $1 billion commitment from the World Bank. The Government has revived the National Advisory Council (NAC) with Mrs. Sonia Gandhi as its Chairperson. Googles New Shopping Tool will provide information to the Users from more than 30,000 Indian Internet sites enabling them to research a variety of products in just one page. Gujarat and Andhra Pradesh have earned the dubious distinction of occupying the Top Two Spots in the list of Child Marriages in the country, accounting for 40% of such incidents in a single year. ONGC has been issued the First set of Certified Emission Reductions (CERs) from its first registered CDM Project Waste Heat Recovery Project at Mumbai High. In the list of Top Ten Highest Paid CEOs in US, Software Major Oracles Mr. Larry Ellison has emerged as the Highest Paid CEO(Pay Packet of $84.5 million). Central Bank of India has received Rs.450 Crore Capital Infusion from the Government on March 31. The Finance Ministry initiated an E-Office Programme directed towards a paperless office by enabling access to internal information for its employees through any computer. UN Agencies have hailed Indias newly enacted Right To Education Act, terming it an Essential Step towards bringing India, and hence the World Closer to the Millineum Development Goals(MDG). The Flagship Company of the UB Group, United Sprits is now the Second Largest Spirits Company in the World in volume terms. The Central Board of Direct taxes (CBDT) and the Income Tax Department have received the Bureau of Indian Standards Certification under IS 15700-2005 for Excellence in Public Delivery System. Almost 18 years into development, the First Fully Indian made GSLV Satellite launcher at its Launch pad stands ready and flown on April 15 from the Sriharikota Space centre. India has set up a High-Powered Committee to specify audit norms for all communication network to prevent remote hacking from abroad. The Government has banned FDI in manufacturing Cigarettes, effectively stubbing-out the future investment plans of foreign tobacco players. ONGC got the Awards for Excellent Overall Performance in the category of Heavyweights and the Highest Market capitalisation amongst PSUs in the category of Wealth Builders. The World Bank has committed a record $100 billion (Rs.4,40,000 Crore) in financial support over the past 18 months to help developing countries recover from the global economic crises. Chandigarh has been one of the First amongst all States/UTs to appoint a Content Service Provider for the National Portal of India and awarded three National Level Web Ratna Awards for the year 2009. The Right to Education Act came into force from 1st April, 2010. It will be binding on the part of Local and State Governments to ensure that all children in the six to 14 years of age group get schooling. General Vijay Kumar Singh, Senior-most Infantry Officer at 59 and a trained Commando, took charge as Chief of the Indian Army from the outgoing Army Chief Gen. Deepak Kapoor. KEC Internationals is set to commission the Countrys Tallest Tower testing station at Nagpur on April2,2010. Chinas Largest Bank the Industrial Commercial Bank of China (ICBC) will open its first branch in Mumbai in India. The Bank is in the process of securing necessary permits to open the branch. The President, Ms. Pratibha Patil kicked off the Decennial Census Operation and Preparation of the First Ever National Population Register. Tokyo launched Asias First Scheme to Trade Carbon Credits, aiming to lead Japan in the battle against greenhouse gas emissions blamed for climate change. Haryanas prestigious Rajiv Gandhi thermal Power Project(RGTPP), Khedar in district Hissar, created History by breaking all records of Fast Project Implementation when its first 600 MW Unit was commissioned on full load in a record 38 months. According to a Study by the Boston Consulting Group, just one-third of large-cap companies worldwide have been able to recoup their losses incurred during the downturn, despite a rebound in Global Equity Markets in 2009. In 2008-09, 15 offices of the Banking Ombudsman received 69,117 complaints as against 47,877 of previous year in which the number of complaints from rural areas saw an increase of 65% while semi-urban areas by 48%. ONGC, GAIL, NTPC and SAIL were among the 13 Public Sector Undertakings which were conferred with SCOPE Meritorious Award for 2008-09 and 2007-08 by the President. Solicitor General Gopal Subramanijam has been unanimously elected Chairperson of the Bar Council of India. He is the First Solicitor General to hold the post. India has achieved the Millennium Development Goal for Drinking Water by providing 84%of its rural population with access to improved sources of water.
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Union Bank of India plans to mop up between $300 million and $500 million under its maiden Medium Term Note (MTN Programme. Export Import Bank of India (Exim Bank) has raised $200 million through Bond Issue. The issue was launched on April 14 and was oversubscribed by four times. Chinese investment in Australian farms increased Ten-fold in the past six months. According to Forbes, Russias 100 Richest People more than doubled their wealth to $297 billion last year as the stock market recovered and the economy began to emerge from its worst slump since the Soviet Union collapsed. Airspace over the UK, France, Belgium, the Netherlands, Germany, Denmark countries was closed in April following clouds of ash spewed by an eruption an Iceland Volcano, which is the Biggest Shut-down of European Space since the World War-II. HDFC Bank, the Countrys Second Largest Private Bank, has moved to the Top of the pile in the Retail Banking Segment displacing ICICI Bank. The National Association of Software and Services Companies (NASSOCM) announced the appointment of Mr. Harsh Manglik as the new Chairman of its Executive Council for the year 2010-11. China with 113 members and India with 56 members gained the Most Ground in breaking into the Exclusive Club of The Forbes Global 2000 The Biggest Most Powerful Listed Companies in the World. The Cabinet Committee on Infrastructure approved a project to promote use of renewable energy in the Ladakh Region at a total cost of Rs.473 Crore. According to the Sunday times, Lakshmi Mittal, the India Born CEO of steel maker ArcelorMittal, has for the sixth year in a row, come on the Top of the pile of Britains 1000 Richest people.
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Financial Digest Apr11

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Union Budget 2011-12 : At a Glance

20. Fiscal Deficit {16-(1+5+6)} 21. Primary Deficit (20-11)

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Railway Budget 2011-12 (Highlights)

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