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The deadline or due date for filing ITR for individuals and even for some other taxpayer categories has now been extended beyond the earlier prescribed deadline of September 30 in light of the glitches in the new income tax portal which
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Intellect Design Arena Ltd, a Chennai-based multiproduct FinTech company for financial and insurance institutions, on Friday announced that it has entered a strategic partnership with Resurs Bank, a leader in retail finance in the Nordic region.
Resurs Bank is investing in a new, entirely cloud-based banking platform that creates the prerequisites to provide customers and partners with state-of-the-art services, interfaces and products.
Intellect will be implementing its microservices-based, API-first and cloud-ready digital banking solution Intellect Digital Core and iKredit360, which is a composable, cloud-native technology platform that has been exclusively designed for European financial institutions, says a statement from Intellect Design.
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Taxes
oi-Vipul Das
The Ministry of Finance has modified rules of the Income-tax Act, 1961 relating to tax deducted at source (TDS) on interest payments made by a scheduled bank to a resident of a scheduled tribe (ST), according to an order issued on September 17, 2021 by the Central Government of India. According to the statement, the central government has said that “no deduction of tax shall be made on the following payment under section 194A of the Act, namely payment in the nature of interest, other than interest on securities, made by a Scheduled Bank (hereinafter the ‘payer’) located in a specified area to a member of Scheduled Tribe (hereinafter the ‘receiver’) residing in any specified area as referred to in s.10(26) of the Act.”
Scheduled banks now have to be sure that the member of the Scheduled Tribe resident in the designated region is a member of the Scheduled Tribe, “and the payment as referred above is accruing or arising to the receiver as referred to in section 10(26) of the Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidences in support of the same,” according to the order.
According to the official rules of the Income-tax Act, the scheduled bank will be required to disclose the above said payment in the statements of deduction of tax as referred to in sub-section (3) of section 200 of the Act. The payment made or aggregate of payments made during the previous year does not exceed Rs 20 lakhs.
For the purposes of the said notification, ‘Scheduled Bank’ means a bank included in the Second Schedule of the Reserve Bank of India Act, 1934, CBDT said in the statement.
The Finance Ministry also extended the deadline for linking Aadhaar to the Permanent Account Number (PAN) by six months to March 31, 2022. The deadline for finishing penalty procedures has also been extended by six months, until March 31, 2022. For detailed details, please click here.
Story first published: Saturday, September 18, 2021, 10:47 [IST]
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Back home, the home financier will likely utilise the proceeds for onward lending. The debt papers likely offered 4.5 percent. They will have a ‘put’ option at the end of three years giving investors an opportunity to exit before the scheduled maturity, sources said.
Deutsche Bank, CLSA, Edelweiss UK and Elara Capital helped the company raise the funds. Individual bankers could not be contacted immediately for comments. Indiabulls Housing did not immediately respond to ET’s query.
The bonds are supposed to be listed on the Singapore Stock Exchange and marked as high-yield securities, below the investment grade.
“A meeting of the Securities Issuance Committee of the board of the directors of the Company is scheduled to be held on September 21, 2021, to consider and approve, amongst other things, the issue price and other terms of the FCCBs,” the company said in a separate exchange filing on Thursday.
Indiabulls Housing Finance has set a target to disburse Rs 2,000 crore worth of home loans every month by end of this fiscal year. It is currently disbursing about Rs 800 crore every month.
The company has also been focussing on co-lending partnerships. A few days ago, Punjab & Sind Bank (PSB), a state-owned bank, entered into a strategic co-lending alliance with Indiabulls Commercial Credit and Indiabulls Housing Finance (IHFL) for MSME and priority sector home loans.
At the beginning of the fiscal year, Housing Development Corporation of India (HDFC Ltd), had entered into a similar partnership with Indiabulls Housing.
Earlier in the month, the housing finance company launched its sale of local bonds through a public issue. It remains open for subscription with the borrower garnering about Rs 591 crore for now.
“We can see credit demand coming up with increasing vaccination drive,” Gagan Banga, managing director at Indiabulls Housing Finance had told ET on September 1.
Indiabulls Housing Finance reported a 3.2 percent rise in its consolidated net profit to Rs 282 crore during the April-June quarter.
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However, the immediate impact on the bottom line will be limited as lenders who sell loans in the first phase will receive just around Rs 2,700 crore upfront cash payment as against the Rs 90,000 crore of bad loans they sell to the corporation. Also, investing in the security receipts issued by NARCL will not increase the capital requirement of banks due to the government guarantee.
Of the Rs 2 lakh crore of bad loans to be transferred to NARCL, around Rs 30,600 crore will be guaranteed for five years. NARCL will pay 15% of whatever amount the loans are valued at, in cash. The remaining 85% will be paid using security receipts. According to a Jefferies report, the government guarantee will keep the security capital neutral as without the guarantee banks will have to set aside funds towards provisions. A sovereign guarantee being risk-free does not attract similar capital requirements.
“For the guaranteed part, banks will recognise the value as an investment but that will not require any capital for 5 years as there is government guarantee. For non-guaranteed part, banks might not recognise value until actual recovery is made,” the Jefferies report said.
According to the report, of the first lot, SBI will be transferring the biggest chunk of loans at Rs 20,000 crore. However, given the size, the sale will be only 0.8% of its loan book. While BoI, Union Bank and PNB will be selling much less at Rs 5,500 crore, Rs 7,800 crore and Rs 8,000 crore, their loans will be a much bigger chunk of their balance sheet. For BoI, the loans sold will be 1.5% of its book, 1.3% for Union Bank and 1.2% for PNB, Jefferies said.
“The sovereign guarantee will cushion security receipt investors against potential lower recoveries. This could, in turn, potentially enable the development of a secondary market in security receipts, which has proved elusive so far,” said Crisil senior director and deputy chief ratings officer Krishnan Sitaraman.
The loans sold to the bad bank include Rs 22,500-crore exposure to Videocon Oil Ventures, where SBI is the lead bank. Another large account is Union Bank-led account of Amtek Auto, which has Rs 9,014 crore of bank loans. IDBI is the lead banker in three large accounts — Reliance Naval, Jaypee Infra and GTL.
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On Thursday, the country’s largest lender State Bank of India announced various festive offers for prospective home loan customers, including a credit score-linked home loan starting at 6.70 per cent, irrespective of the loan amount. Earlier, a borrower availing a home loan above Rs 75 lakh had to pay an interest rate of 7.15 per cent.
Anarock group Chairman Anuj Puri said: “This is an extremely competitive move by SBI, and it virtually negates all the previous limitations which applied to special home loan interest rates. Instead of focussing on just budget housing, this new interest rate is genuinely democratic as buyers from any budget bandwidth will benefit.”
Puri termed the SBI’s decision as “aptly timed” ahead of the festive season.
“This year, we are likely to see significantly improved traction in the housing segment during this period. Waiving of processing fees and occupation-linked interest premium are added levels of savings,” he said.
Puri expected other lenders to follow SBI’s footsteps in order to remain competitive.
Vikas Wadhawan, Group CFO, Housing.com, Makaan.com and Proptiger.com, said the reduction in home loan interest rates by SBI will help the sector gain further momentum.
“Prices are already subdued and buyers will be able to save a little more money,” he added.
Amit Goyal, CEO, India Sotheby’s International Realty, said the rate cut by some of the country’s leading banks will act as a catalyst for faster decisions.
“SBI decision to offer lower interest rate irrespective of the prices of the unit or loan amount is likely to benefit buyers in the luxury segment as well. Given the upcoming festive season, which is considered auspicious by a large number of Indians to make big-ticket purchases, the timing of reduction in interest rate couldn’t have been better,” he added.
Raoul Kapoor, COO Andromeda, said the reduction in interest rates by major banks is expected to give a boost to the resurgent real estate market, especially during the busy festive season.
Signature Global founder and chairman Pradeep Aggarwal said: “The market is already on the up, and we expect that the recent decision by the SBI will help turn the table and lead to a substantial increase in sales.”
Nayan Raheja, Executive Director, Raheja Developers, said the demand for affordable and mid-segment houses will go up as affordability improves.
“This will be a double dose of benefit for buyers as developers have already kept the prices on a leash, even though construction cost is going up,” Raheja added.
Noida-based ABA Corp Director Amit Modi hoped that other private and public sector banks would also announce similar initiatives to revive the market confidence.
“The market has already started seeing sales increase post-May 2021, and the home loan interest rate reduction will further boost the buying sentiment. We are looking forward to a faster recovery and hope the measure will expedite the sector to reach pre-COVID levels sooner than expected,” he added.
Gurugram-based Silverglades group CEO Anubhav Jain said the SBI has set a trend for reducing home loan rates by reducing lending rate to as low as 6.7 per cent.
This would go a long way in giving a boost to the real estate sector in the upcoming festive season, he added.
“Home buyers will be entitled to get home loans at 6.7 per cent irrespective of the amount of loan. Earlier, people seeking home loans over Rs 75 lakhs were required to pay comparatively higher rates. Also the decision to do away with distinction between salaried and non-salaried is welcome and makes the whole process simpler and transparent,” Jain said.
With the introduction of the new offer by the SBI, a borrower can now avail home loan for any amount at a rate as low as 6.70 per cent,
This will result in a saving of 45 basis points (bps) which translates to an interest saving of more than Rs 8 lakh, for a Rs 75 lakh loan with a 30-year tenure, SBI said.
Further, the rate of interest applicable for a non-salaried home borrower was 15 bps higher than the interest rate applicable to a salaried borrower. The lender has removed this distinction between a salaried and a non-salaried borrower.
Now, there is no occupation-linked interest premium being charged to prospective home loan borrowers, the bank had said.
Recently, Anarock issued its estimates of housing sales for the current calendar year, projecting 30 per cent increase in demand across seven major cities to nearly 1.8 lakh units in 2021.
However, it said that the demand would still be lower than the pre-Covid levels.
In 2019, housing sales stood at 2,61,358 units across seven cities – Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Bengaluru, Hyderabad, Chennai and Kolkata. PTI MJH MKJ
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Not just server down, but ‘technical glitches’ seems to have become a common term for banks.
The number of glitches in the online banking space seems to be rising, with recent cases surprising everyone – large sums being transferred to wrong bank accounts.
So far, two cases from Bihar have actually uncovered the system issues in the banking system.
A glitch that credited funds
A private tutor in Khagaria was erroneously credited Rs 5.5 lakh in his bank account by the South Bihar Gramin Bank, and two school students in Katihar were credited Rs 960 crore overnight by the North Bihar Gramin Bank.
The tutor has been arrested for not returning the money, according to The Hindu, while the incident that happened with the two school students is under investigation.
For the Katihar case, the bank’s branch manager said that there was some glitch in the computerised system of sending money. The amount was visible in their statements but the actual money wasn’t in their account. For the Khagaria case, however, the money was credited and the tutor claimed that he did not return the money because it was government relief sent to him.
The two incidents have caused havoc, making villagers run to ATMs to check if they too had been struck with such luck, according to NDTV. But, so far, only two such incidents have been reported.
This is, however, not the first time such a ‘glitch’ has happened.
Glitches by Citi, HDFC, PNB
In February, one of the world’s largest banks – Citibank – accidentally transferred $900 million to cosmetic company Revlon’s lenders. Citi was serving as the administrative agent or loan agent between Revlon, the embattled cosmetics company, and its creditors.
The bank accidentally paid those lenders much more than it had to. The bank had to credit only $8 million, but ended up transferring $900 million, according to reports.
The US District Court judge termed this to be the “biggest blunder in banking history”, after the bank had moved the court, because it still had not received $500 million from the accidental transfer.
Apart from erroneous transfers, there have been other incidents of continuous technical glitches to an extent that the Reserve Bank of India banned a top private bank from issuing new credit cards – the bank’s best seller.
HDFC Bank was the bank that was banned for eight months from issuing new credit cards.
The RBI had taken this step after customers faced multiple glitches in the bank’s internet and mobile banking systems for over two years.
On Friday, Punjab National Bank‘s Twitter account was seen flooded with complaints from several customers. They raised concerns over the technical glitches they have been facing throughout this week.
Below are two of the many instances from PNB’s Twitter account –
Dear customer, we regret the inconvenience caused to you. Our App service is facing glitches due to some technical difficulty. However, our team is working on the same and it will be resolved soon.
— Punjab National Bank (@pnbindia) September 17, 2021
Dear customer, we regret the inconvenience caused to you. Our Internet Banking UPI, and APP services are facing glitches due to some technical difficulty. However, our team is working on the same and it will be resolved soon.
— Punjab National Bank (@pnbindia) September 15, 2021
“Dear customer, we regret the inconvenience caused to you. Our App service is facing glitches due to some technical difficulty. However, our team is working on the same and it will be resolved soon.” – has been the bank’s standard reply to all such complaints.
Glitches in the PNBONE mobile application have been rising. This could be because of the newly built app “PNBONE” after the mega merger of Oriental Bank of Commerce, United Bank of India with Punjab National Bank, sources, who did not wish to be named, said, adding that the tech team is looking to help resolve all the issues for a better banking experience.
At times, customers face technical glitches when banks go for maintenance activities. Failed transactions and reconciliation takes its own time and customers have no choice than waiting and hoping for the seamless service.
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Among sectors, public sector banks lost the most, while private banks gained the most today.
On Friday, banking and financial services stocks were in focus after Finance Minister Nirmala Sitharaman announced the much-awaited bad bank.The Nifty Bank scaled the crucial 38,000-level mark for the first time ever, and a fresh lifetime high of 38,112.75.
The BSE Sensex has gained around 9% over the last month. Stock-specific moves, weak cues from Asian markets, inflation data, revival of economic activity in Europe, improving economic data and healthy pick up in India’s daily inoculations were considered key driving factors this week.
Monday Closing bell: Indices end flat on negative bias, Nifty Bank falls
Domestic equity indices ended in the red on Monday, with BSE Sensex down 0.2% at 58,177 points and Nifty 50 down 0.08% at 17,355. However, mid and smallcap stocks outperformed other sectors, with BSE Midcap index closing 0.32% higher and the smallcap index ending with a gain of 0.80%.
Nifty Bank and Nifty Financial Services closed 0.58% and 0.19% lower, respectively. ICICI Bank, HDFC Bank and SBI Life Insurance were top laggards among Sensex stocks, while Kotak Mahindra Bank, Bajaj Finserv, Chola Invest and Power Finance were top gainers.
Tuesday Closing bell: Indices end with mild gains, broader markets outperform
The BSE Sensex closed at a high of 58,247 points, up 69 points, and the Nifty 50 rose 25 points to end at 17,380, a record closing high for the benchmark. Broader markets outperformed the benchmarks as both mid and small-caps were up 1% each.
Bank Nifty opened higher and made an intraday high of 36840 but failed to sustain higher levels. It closed with a gain of 0.38%, and Nifty Financial Services closed at 18,103, down 0.13%.
Wednesday Closing bell : Sensex, Nifty end at record closing highs
Headline indices Sensex and Nifty 50 ended at record closing highs, with both indices up nearly 1% each. The Sensex closed at 58,723 points, up 0.82%, while Nifty closed the day at 17,519, up 0.80%. BSE Midcap and Smallcap indices closed 0.65% and 0.86% higher, respectively.
Nifty Bank closed 0.65% higher at 36,852, while Nifty Financial Services ended at 18,158, up 0.30%. SBI, IndusInd Bank and HDFC were among the top gainers, while Axis Bank and HDFC Bank were among the top laggards.
PSU bank index jumped 2.83% with J&K Bank, Bank of Baroda, IOB, Indian Bank gaining 2.7% each.
Thursday Closing bell: Market closes at record highs again; banks, financials outperform ahead of FM announcement
Domestic benchmark indices ended at record closing highs on Thursday. Banks and financials outperformed all the sectors, ahead of Financial Minister Nirmala Sitharaman’s bad bank announcement.
BSE Sensex jumped 418 points to end above 59,100 mark for the first time at 59,141, while the Nifty 50 index ended at 17,629.50, rising 0.63%. BSE Midcap and Smallcap indices also hit their fresh record highs intraday, and closed 0.48% and 0.08% higher, respectively.
Among sectors, the Nifty PSU Bank index jumped 5.43%, while the Nifty Private Bank index clocked a gain of 2.67% . The Nifty Bank index rose 2.22%, while Nifty Financial Services gained 1.09%. Induslnd Bank emerged as the top gainer jumping 7% followed by SBI, Kotak Mahindra Bank, ICICI Bank, Axis Bank and HDFC Bank.
Friday Closing Bell: Sensex and the Nifty snapped 3-day winning streak, PSU banks gain
Having scaled fresh highs in early deals, benchmark indices lost steam as investors were seen booking profits after the three-day winning streak. Losses were led by PSU banks, auto, pharma stocks. BSE Sensex ended 0.21% lower at 59,016, while the Nifty 50 index fell 0.25% to settle at 17,585. BSE Midcap index fell 1.14% and the BSE Smallcap index closed 1.06% lower.
Bank Nifty ended at 37,811, up 0.38%, while Nifty Financial Services rose 0.65% ending at 18,476. Nifty PSU Bank index fell more than 3%, with Bank of Baroda losing 4.37%, by IOB, UCO Bank and Bank of India.
Key Industry takeaways
Retail inflation softens to 4-month low in August at 5.3%
Retail inflation based on Consumer Price Index (Combined) eased to a four-month low of 5.3% in August due to moderation in food prices along with a high base effect, data released by the National Statistical Office (NSO) on 13 September showed.
The August inflation print is within the targeted range of 2±4 per cent of the Reserve Bank of India (RBI) though this is the seventh consecutive month of an inflation print higher than 5 per cent and 23rd consecutive month of it being above the RBI’s target of 4%.
SREI’s Rs 35,000-crore loan may be classified as NPA
Banks may classify Rs 35,000 crore loan given to SREI group as Non Performing Asset (NPA) by the end of this quarter after the National Company Law Tribunal (NCLT) set aside the previous order restraining banks from such classification.
According to analysts’ estimates, Indian Bank and Canara Bank have exposures of Rs 2,000 crore and Rs 1,200 crore, respectively, to Srei group, while ICICI Bank and Axis Bank have Rs 800 crore each.
Sebi proposes to tighten timeline for filing settlement applications
The Securities and Exchange Board of India on Tuesday proposed to tighten the timeline of settlement mechanism, whereby it suggested fixing the total timeframe for filing the application at 60 days after receipt of the notice to show cause.
The total timeframe for filing the application for settlement may be fixed at 60 days of the date of receipt of the show-cause notice or the supplementary notice, whichever is later, Sebi said in a consultation paper.
Finance Minister Sitharaman announces bad bank
Finance Minister Nirmala Sitharaman announced the much-awaited bad bank on Thursday, and said that the Union Cabinet approved on Wednesday the sovereign backing of up to Rs 30,600 crore for the securities receipts.
The planned National Asset Reconstruction Company Ltd (NARCL) will issue securities receipts to banks as it takes on non-performing assets from their books. These securities receipts will be valid for five years.
Mahindra Finance enters vehicle leasing and subscription business
Mahindra & Mahindra Financial Services Ltd announced on Thursday, its entry into vehicle leasing and subscription business, under the brand name ‘Quiklyz’.
Under this model, consumers can pay a monthly fee to access a vehicle of their choice across all car brands, at a lower price as against regular ownership.
IDFC Board approves initiating steps to divest mutual fund business:
The board of directors of IDFC Ltd and IDFC Financial Holding Co Ltd at their meetings held on Friday have considered and approved to initiate steps to divest its mutual fund business subject to requisite regulatory approvals, as applicable.
The boards have authorised respective strategy and investment committees to take necessary steps, including appointment of investment banker, for the same.
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The report, which is based on a survey, said most of the respondents believed that the reason behind the high unemployment rate is the lack of employment opportunities available in the areas concerned.
The survey is covered 1,100 business leaders between August 1 and September 10. They include those in sectors such as banking and finance, construction and engineering, education/ teaching/ training, FMCG, hospitality, HR solutions, IT, ITeS, and business processing outsourcing, logistics, and manufacturing, among others.
The report further showed that more than 57 per cent of the total respondents strongly agreed that the revival of MSMEs would aid in improving the current employment situation.
About 14.3 per cent of the respondents believe that the reason behind the rural unemployment was the lockdown restrictions, and another 14.3 per cent said it was due to the rise in the COVID-19 cases, according to the report.
The remaining respondents believed that it is a result of all reasons mentioned above that led to a spike in unemployment in rural areas, it added.
Meanwhile, the report found that over 85 per cent of respondents stated that the manufacturing sector, which has been witnessing a slowdown, has been a major contributor to the rise in unemployment in the rural areas.
As factories and production are one of the major contributors of rural employment and with the pandemic halting businesses, the manufacturing sector has majorly impacted rural unemployment compared to the service sector, it said.
Genius Consultants Chairman and Managing Director R P Yadav said, “Rural unemployment has always been a major concern even before the pandemic. With businesses and manufacturing slowing down, the situation has deteriorated even further.”
Yadav added that there is a dire need to bring in a swift course of action to elevate employment opportunities in the rural parts of the country.
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NCLT has appointed Parag Sheth as the resolution professional. Gujarat-based real-estate developer GCCL Infrastructure & Projects owes Rs 54.16 lakh to its creditors. The company had approached the Ahmedabad bench of NCLT under the newly introduced pre-packaged insolvency resolution process. “The financial creditor approved the decision of the directors to file this application,” observed the division bench of Madan Gosavi and Virendra Kumar Gupta in its order of September 15.
In April, the government had issued an ordinance to amend the Insolvency & Bankruptcy Code (IBC) to provide a quicker and more cost-effective mechanism for the Micro, Small and Medium Enterprises (MSME) sector, which has been hit the hardest by the pandemic. On July 28, the Lok Sabha passed the Insolvency & Bankruptcy Code (Amendment) Bill 2021 to pave the way for pre-packaged insolvency resolution. “The incorporation of the pre-packaged insolvency resolution process for MSMEs in the code will alleviate the distress faced by MSMEs due to the impact of the pandemic and the unique nature of their business,” said the government at the time of issuing the ordinance.
According to Anil Goel, founder of AAA Insolvency, pre-packaged insolvency resolution gives a chance to MSMEs to restructure their debts and start afresh while the old losses can be shared with the creditors. “It would facilitate more transactions of investment, partnership, mergers & acquisitions and business transfer as the acquirer would get a clean slate on the affairs of the company,” adds Goel.
The minimum threshold for default for such companies is Rs 10 lakh for initiation of the process. Also, as per the law, about 66% of creditors must approve the Pre-Pack Insolvency Resolution Process. “Pre-Pack insolvency brings two elements, first it takes away the fear of subsequent investigation by Govt agencies when lenders agree for resolution package since this is also a judicial process and second MSME borrowers can continue to run their business which will help to protect the value of the businesses,” said Nirmal Gangwal, Managing Partner, Brescon & Allied Partners LLP. “Many more MSME are expected to take this route to resolve their debts in near future.”
As per the laws, MSMEs should not have a turnover of more than Rs 250 crore excluding exports, and the investment in plant and machinery should not exceed Rs 50 crore in the preceding year. Earlier, the MSME status was limited to only manufacturing companies and service providers. It has now been extended to trading companies as well by the Centre.
However, few experts are skeptical about the long-term success of the regulations. “Unlike normal insolvency resolution process, in Pre-Pack, the role of the resolution professional is more of a monitor and the company’s promoter runs the show and hence the lenders will have to keep the long term viability of the business in mind when they take a call to rescue a business,” said Nishit Dhruva, managing partner of law firm MDP & Partners. “Only time will tell whether this will be successful in the future.”
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