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Stablecoins face crackdown as US discusses risk council review, BFSI News, ET BFSI

Personal Finance

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U.S. officials are discussing launching a formal review into whether Tether and other stablecoins threaten financial stability, scrutiny that could lead to dramatically ramped-up oversight for a fast-growing corner of the crypto market.

After weeks of deliberations, the Treasury Department and other federal agencies are nearing a decision on whether to launch an examination by the Financial Stability Oversight Council, said three people familiar with the matter who asked not to be named in commenting on closed-door discussions. FSOC has the power to deem companies or activities a systemic threat to the financial system — a label that typically sets off tough rules and aggressive monitoring by regulators.

Such a designation would likely be a gamechanger for stablecoins, which are considered crucial to the crypto market because traders widely use them to buy Bitcoin and other virtual currencies.

Stablecoins have thrived in the unregulated shadows, with tokens in circulation now worth more than $120 billion, according to CoinMarketCap.com. And they are increasingly being used for transactions that resemble traditional financial products — like bank savings accounts — without offering anywhere near the same level of consumer protections.

A hallmark of stablecoins is that they are pegged to fiat currencies, meaning they are supposed to be immune to the wild price swings that have plagued Bitcoin. Tether and other firms achieve that by backing their tokens with assets like U.S. dollars and corporate debt.

The President’s Working Group on Financial Markets, which is led by Treasury Secretary Janet Yellen, has been particularly focused on Tether’s claims that it holds massive amounts of commercial paper — debt issued by companies to meet their short-term funding needs. In a private meeting U.S. officials held in July, they likened the situation to an unregulated money-market mutual fund that could be susceptible to chaotic investor runs if cryptocurrencies plunge.

The President’s Working Group plans to issue stablecoin recommendations by December, and a consensus is building among regulators involved that an FSOC review is warranted, the people said. The groups overlap, as Yellen, Federal Reserve Chairman Jerome Powell and Securities and Exchange Commission Chair Gary Gensler are members of both the PWG and oversight council.

A Treasury spokesman declined to comment.

The FSOC process includes a lengthy study and an assessment of which federal agencies should respond and how. In the end, the council could direct those agencies to intervene in the market and reduce the dangers posed by stablecoin transactions.

While Tether is the most popular stablecoin, there are multiple rivals, including Coinbase Global Inc.’s USDC token and a dollar-linked offering from Binance Holdings Ltd.

Scrutiny has been ratcheting up as stablecoins proliferate. Coinbase made headlines this week by disclosing the SEC had threatened to sue if the crypto exchange launched a product that would allow customers to earn 4% yields for lending out their USDCs to other traders. The SEC believes the Coinbase proposal is an investment contract that should be registered with the agency, a view the company aggressively contested in a blog post and a series of tweets.

Watchdogs have also privately expressed worries about Diem, a stablecoin being developed by an association that includes Facebook Inc. A top concern is that the token’s market impact could be massive because of its potential for widespread adoption — Facebook’s social media network has almost 3 billion active users.

Treasury held meetings this week with industry representatives to ask them about the potential dangers associated with stablecoins. As it and other agencies consider taking action, they’re facing intense pressure from Capitol Hill.

“I urge FSOC to act with urgency and use its statutory authority to address cryptocurrencies’ risks,” Senator Elizabeth Warren wrote in a July 26 letter to Yellen that flagged the stablecoin market’s interconnectedness and its susceptibility to investor runs. “The longer that the United States waits to adapt the proper regulatory regime for these assets, the more likely they will become so intertwined in our financial system that there could be potentially serious consequences.”

Stablecoins already face another threat from the U.S. government, as the Fed is discussing whether to launch its own digital currency. Powell told lawmakers in July that a central bank token would make stablecoins obsolete.

“That’s one of the stronger arguments in its favor,” he said.



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Top gold loan rates and comparison, BFSI News, ET BFSI

Banking & Finance

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To take care of a financial emergency, an individual has various options. These include taking a personal loan or redeeming their investments in financial instruments like the provident fund, mutual funds etc.

When it comes to borrowing from a financial institution, other than availing a personal loan, one can also opt for a gold loan. If you are planning on taking a gold loan (or a loan against gold), here is what you need to know.

What is a gold loan?
A gold loan is a loan against gold. It is a secured loan where gold articles such as gold jewellery, ornaments etc. are taken as collateral by the lending bank/NBFC. The loan is given to the borrower against this gold as collateral.

Where to avail gold loan?
Apart from banks such as SBI, ICICI Bank, HDFC Bank etc., non-banking finance companies (NBFCs) also offer gold loans to individuals. NBFCs which offer gold loans include Muthoot Finance, Manappuram Finance etc.

Minimum and maximum gold loan amount
The amount of loan that an individual can get against a gold article will vary from lender to lender. For instance, ICICI Bank offers gold loans between Rs 10,000 and Rs 1 crore. Whereas the State Bank of India (SBI) offers gold loans between Rs 20,000 and Rs 20 lakh. While Muthoot Finance offers gold loans starting from a minimum amount of Rs 1,500 with no maximum limit.

Tenure of gold loan
The tenure of the gold loan will also vary from lender to lender. For instance, HDFC Bank offers gold loans with tenures between three months and 24 months. Maximum period of repayment of an SBI gold loan is 36 months. Muthoot Finance offers different types of gold loan schemes that come with different tenures.

Interest rate on gold loan charged by bank and NBFC

Bank / NBFC Gold Loan Interest Rate Processing Fee
SBI 7.00% to 7.50% 0.50% + GST
Bank of India 7.40% Rs.125 to Rs. 300 per lakh
Canara Bank 7.35% RLLR
Bank of Maharashtra RLLR + 0.20% Rs.500/- exclusive of GST.
Uco Bank 8.50%
Indian Bank 7 % Floating
Punjab National Bank RLLR + 1.95% 0.75% of loan amount
Central Bank of India MCLR + 0.25% NIL
Punjab & Sind Bank 7.50%
Federal Bank 8.50% onwards
United Bank 1 Year MCLR (9.35%)
Dhanlaxmi Bank Starting 9.65% (Fixed)
J & K Bank One Year MCLR + Spread = 10.00% p.a
Karur Vysya Bank 9.50%
Indusind Bank 10.00% to 16% Processing Fee – 1%
Kotak Mahindra Bank 10% to 17% Upto 2%
HDFC Bank 8.85% to 17.10% 1.50% + GST
Bandhan Bank Competitive rates of interest 1% + GST
ICICI Bank 9% to 19.76% 1% of loan amount
South Indian Bank 1 Year MCLR + 1.60% to 1 Year MCLR + 2.60%
Muthoot Finance 24% to 26%
Axis Bank 14.50% 1% + GST
AU Small Finance Bank Up to 24% 1% of loan amount
Manappuram Finance Max 29%
City Union Bank 9.50%
Union Bank MCLR+0.40% to MCLR+ 2.65%
Bank of Baroda 1 year MCLR+S.P+3% 0.50% + GST
Karnataka Bank 8.49% to 8.79%

All data sourced from Economic Times Intelligence Group (ETIG)
Interest rate on gold loan sorted based on increasing order of maximum interest rate charged by bank/NBFC
Interest rate data as on September 11, 2021What are the documents required?
To avail a gold loan, the bank or NBFC will ask you to provide various documents. Documents normally required include your proof of identity such as PAN, Aadhaar etc. and proof of address like Aadhaar, passport, Voter-ID card etc, and your photograph. Any additional documents required would vary from lender to lender.

What are the charges?
For loans like home, auto and personal loans, the borrower is usually required to pay processing charges/fees to avail the loan. While taking a gold loan, apart from processing fees, an applicant may be asked to pay for valuation of gold which will be used as collateral by the lending institution. For instance, HDFC Bank charges Rs 250 as valuation fees for loan up to Rs 1.5 lakh and Rs 500 for loan over Rs 1.5 lakh.

Apart from processing fees and valuation charges, a bank can also charge documentation and foreclosure charges.
Therefore, you should check with the bank and/or NBFC for all the charges that will be levied before availing the loan.

Disclaimer: The data/information given above is subject to change, hence before taking any decision based on it, please check terms and conditions with the bank/institution concerned.

For any queries or changes, please write to us on etigdb@timesgroup.com or call us at 022 – 66353963



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Here are the interest rates of home loans linked to repo rate, BFSI News, ET BFSI

Banking & Finance

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Interest rates on home loans offered by banks are now linked to an external benchmark. This is because the Reserve Bank of India (RBI) has asked all scheduled commercial banks (except regional rural banks), local area banks and small finance banks to link interest rates on retail and MSME loans to an external benchmark rate with effect from October 1, 2019.

RBI, in its circular, has directed banks to link their retail lending interest rates to any of the following external benchmarks:

  • RBI’s repo rate
  • Government of India 3-months Treasury bill yield published by Financial Benchmarks India Pvt. Ltd. (FBIL)
  • Government of India 6-months Treasury bill yield published by FBIL
  • Any other benchmark market interest rate published by the FBIL

Most banks have chosen RBI’s repo rate as their choice of external benchmark. The lending interest rate linked to repo rate is known as Repo Rate Linked Lending Rate (RLLR). RLLR is made up of RBI’s repo rate plus spread or marginRLLR = Repo rate + Margin charged by the bank.

The Central Bank reviews the repo rate in every two months.

The margin charged by a bank will remain same for all home loan takers, however, as per the RBI circular, banks are allowed to charge a risk premium from borrowers. Risk premium charged by the bank will depend on how risky your bank perceives you to be and will therefore vary from one borrower to another.

Here are home loan interest rates offered by top banks for salaried individuals

BANK NAME RLLR Minimum Interest rate(%)** Maximum Interest rate (%)
IDFC First Bank 6.50 6.50 8.00
Kotak Mahindra Bank 6.65 6.65 7.10
Bank of Baroda 6.75 6.75 8.35
ICICI Bank 6.75 6.75 7.40
Punjab & Sind Bank 6.85 6.75 7.35
Union Bank of India 6.80 6.80 7.35
SBI Term Loan 6.65 6.80 7.15
Indian Bank 6.80 6.80 8.25
Central Bank of India 6.85 6.85 7.30
Bank of India 6.85 6.85 8.20
Axis Bank 6.90 6.90 8.40
Bank of Maharashtra 6.90 6.90 8.35
Canara Bank 6.90 6.90 8.90
IDBI Bank 6.90 6.95 8.55
Punjab National Bank 6.80 6.95 7.85
Indian Overseas Bank 6.85 7.05 7.30
UCO Bank 6.90 7.15 7.25
SBI Max Gain 6.65 7.15 7.50
Karur Vysya Bank 7.05 7.15 9.35
South Indian Bank 7.25 7.25 9.50
J & K Bank 7.20 7.30 7.60
Karnataka Bank 7.50 7.50 8.85
Federal Bank 7.65 7.65 7.75
Dhanlaxmi Bank 7.00 7.85 8.50
DCB Bank 8.16 8.16 8.16
Yes Bank 7.60 8.95 11.80

**Sorted on minimum interest rate charged by the bank after adding risk premium
*IDFC First Bank charges up to Rs 10,000 as processing fees (Additional premium is charged based on risk profile)
*Kotak Mahindra Bank charges a processing fee of max 2% + GST and any other statutory charges plus documentation charges up to Rs.10,000/-
*Bank of Baroda processing fees is 0.25% to 0.50% of loan; Min. Rs.8500/- Max. Rs.25000/-
*ICICI Bank charges processing fees in the range of 0.50% and 2% subject to a minimum of Rs 1,500
*Punjab & Sindh Bank offers a full waiver of processing and inspection charges
*Union Bank of India charges a processing fee of 0.50% of loan amount, Max. Rs 15000
*SBI charges 0.40 per cent plus GST as processing fees. Minimum Rs 10,000 and Maximum Rs 30,000 plus GST. (Exception builder-tie up projects)
*Indian Bank charges 0.230 per cent on loan amount as processing fees with a maximum amount of Rs 20,470.
*Central Bank of India charges 0.50% processing fee subject to Max Rs 20,000
*Bank of India charges 0.25% of loan; minimum Rs 1,500 and maximum Rs 20,000
*Axis Bank charges up to 1% of the loan amount subject to a minimum of Rs 10,000.
*Bank of Maharashtra charges a processing fee of 0.25% of Loan amount Max Rs.25,000/-
*Canara Bank charges 0.50%; minimum Rs 1,500 and maximum of Rs.10,000/-
*IDBI Bank charges a processing fee of Min Rs.2,500/- Max Rs.15,000/- (Plus GST)
*PNB charges 0.35 per cent as processing fees; minimum Rs 2,500 and maximum Rs 15,000 plus documentation charges 1,350/-
*Indian Overseas Bank charges 0.50% as processing fees; max Rs 25,000
*UCO Bank charges 0.5% of the loan amount, minimum Rs 1500 & maximum Rs 15,000.
*Karur Vysya Bank charges minimum Rs 2,500 and maximum Rs 7,500 plus GST as processing fees
*South Indian Bank charges 0.40 per cent of loan amount
*J&K Bank charges 0.25% plus GST Minimum Rs 5,000; maximum Rs 25,000 (NIL PC for takeover loans)
*Karnataka Bank charges 1 per cent with minimum Rs 500.
*Federal Bank charges 0.50% of the loan amount as processing fees; min Rs 10,000 and max Rs 45,000
*Dhanlaxmi Bank charges 1.25 per cent of loan amount
*DCB Bank charges up to 2% of the loan amount; minimum Rs 5,000
*Yes Bank charges 2% or Rs 10,000 whichever is higherHere are home loan interest rates offered by top banks for self-employed individuals

BANK NAME RLLR Minimum Interest rate(%)** Maximum Interest rate (%)
IDFC First Bank 6.50 6.50 8.00
Kotak Mahindra Bank 6.65 6.75 7.20
Bank of Baroda 6.75 6.75 8.35
Union Bank of India 6.80 6.85 7.40
Central Bank of India 6.85 6.85 7.30
Bank of India 6.85 6.85 8.35
ICICI Bank 6.75 6.90 7.55
SBI Term Loan 6.65 6.95 7.30
Indian Bank 6.80 6.95 8.40
Canara Bank 6.90 6.95 8.90
IDBI Bank 6.90 6.95 10.05
Punjab National Bank 6.80 6.95 7.85
Axis Bank 6.90 7.00 8.55
Indian Overseas Bank 6.85 7.05 7.30
Punjab & Sind Bank 6.85 7.10 7.90
Bank of Maharashtra 6.90 7.15 8.45
UCO Bank 6.90 7.15 7.25
Karur Vysya Bank 7.05 7.15 9.35
SBI Max Gain 6.65 7.30 7.80
J & K Bank 7.20 7.30 7.60
Karnataka Bank 7.50 7.50 8.85
South Indian Bank 7.25 7.60 10.00
Federal Bank 7.65 7.70 7.80
DCB Bank 8.16 8.16 8.16
Dhanlaxmi Bank 7.00 8.35 9.00
Yes Bank 7.60 8.95 11.80

**Sorted on minimum interest rate charged by the bank after adding risk premium
*IDFC First Bank charges up to Rs 10,000 as processing fees (Additional premium is charged based on risk profile)
*Kotak Mahindra Bank charges a processing fee of max 2% + GST and any other statutory charges plus documentation charges up to Rs.10,000/-
*Bank of Baroda processing fees is 0.25% to 0.50% of loan; Min. Rs.8500/- Max. Rs.25000/-
*ICICI Bank charges processing fees in the range of 0.50% and 2% subject to a minimum of Rs 1,500
*Punjab & Sindh Bank offers a full waiver of processing and inspection charges
*Union Bank of India charges a processing fee of 0.50% of loan amount, Max. Rs 15000
*SBI charges 0.40 per cent plus GST as processing fees. Minimum Rs 10,000 and Maximum Rs 30,000 plus GST. (Exception builder-tie up projects)
*Indian Bank charges 0.230 per cent on loan amount as processing fees with a maximum amount of Rs 20,470.
*Central Bank of India charges 0.50% processing fee subject to Max Rs 20,000
*Bank of India charges 0.25% of loan; minimum Rs 1,500 and maximum Rs 20,000
*Axis Bank charges up to 1% of the loan amount subject to a minimum of Rs 10,000.
*Bank of Maharashtra charges a processing fee of 0.25% of Loan amount Max Rs.25,000/-
*Canara Bank charges 0.50%; minimum Rs 1,500 and maximum of Rs.10,000/-
*IDBI Bank charges a processing fee of Min Rs.2,500/- Max Rs.15,000/- (Plus GST)
*PNB charges 0.35 per cent as processing fees; minimum Rs 2,500 and maximum Rs 15,000 plus documentation charges 1,350/-
*Indian Overseas Bank charges 0.50% as processing fees; max Rs 25,000
*UCO Bank charges 0.5% of the loan amount, minimum Rs 1500 & maximum Rs 15,000.
*Karur Vysya Bank charges minimum Rs 2,500 and maximum Rs 7,500 plus GST as processing fees
*South Indian Bank charges 0.40 per cent of loan amount
*J&K Bank charges 0.25% plus GST Minimum Rs 5,000; maximum Rs 25,000 (NIL PC for takeover loans)
*Karnataka Bank charges 1 per cent with minimum Rs 500.
*Federal Bank charges 0.50% of the loan amount as processing fees; min Rs 10,000 and max Rs 45,000
*Dhanlaxmi Bank charges 1.25 per cent of loan amount
*DCB Bank charges up to 2% of the loan amount; minimum Rs 5,000
*Yes Bank charges 2% or Rs 10,000 whichever is higher
All data sourced from Economic Times Intelligence Group (ETIG)
Data as on September 11, 2021

How will your EMI change in the new external benchmark linked lending rate regime?
To categorise the borrower on the basis of credit risk, some banks have internal risk assessment teams while others rely on credit scores to grade the risk of each borrower. As per RBI’s circular, if your credit score undergoes substantial changes, the bank can revise the risk premium charged on the home loan.

Also Read: 5 lesser known things about credit score that can impact your home loan interest rates

As leading interest rates are linked to an external benchmark, banks are required to reset the interest rates at least once in three months. Therefore, any change in the external benchmark rate, will mandatorily have to be passed on to the borrower within three months of the change.

Also Read: How your EMI will be reset under external benchmark lending regime

Why RBI asked banks to link lending interest rates to an external benchmark
Under the previous marginal cost of lending rate (MCLR) regime, home loan borrowers and others often complained that banks did not pass on the benefit of a lower rate whenever RBI cut the key policy rates but often raised the interest rates quickly whenever policy rates were hiked. Linking the interest rates to an external benchmark is supposed to bring in more transparency and faster transmission of changes in key policy rates.

For any queries or changes, please write to us on etigdb@timesgroup.com or call us at 022 – 66353963



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Court rejects bail plea of Ambience group’s promoter in Rs 800-crore fraud case, BFSI News, ET BFSI

Banking & Finance

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NEW DELHI: A Delhi court on Friday dismissed the bail plea of businessman Raj Singh Gehlot, the owner of Ambience Mall who was arrested in a money laundering case related to Rs 800 crore bank loan alleged fraud case.

The Enforcement Directorate arrested Gehlot in July, in an alleged bank loan fraud case worth more than Rs 800 crore. He was arrested under the Prevention of Money Laundering Act, 2002 (PMLA) for committing bank fraud against the Jammu and Kashmir Bank Consortium.

Additional Sessions Judge Dharmender Rana dismissed the bail plea and said, “considering the nature of allegations, intricate nature of the investigation and the possibility of the applicant/accused attempting to influence the course of the investigation, I am of the considered opinion that the instant bail application is bereft of any merits and the same is accordingly dismissed.”

“…the economic offences are required to be treated as a separate class and bail cannot be granted as a matter of routine…”, Court said.

Earlier, Court while granting custody to ED said, “Investigation of an offence under the Prevention of Money Laundering Act, (PMLA) in itself is an intricate exercise of skills and patience. The very nature of the offence requires sustained interrogation and an intensive analysis of the copious material collected during the course of the investigation. Considering its intricate nature, Investigation under PMLA, for obvious reasons, is a time-consuming process.”

Enforcement Directorates through Advocate Atul Sharma and Advocate Naveen Kumar Matta submitted that his custodial interrogation was required to unearth the end-use of some portion of loan funds in order to ascertain the exact quantum of proceeds of crime for determining the role of various other persons and aides who have assisted in the sanction and diversion of loan funds and also to unearth the entire modus operandi involved in the present case.

Senior Advocate Vikas Pahwa appearing for Gehlot forcefully argued that the relevant information about the transactions concerning the loan and its utilization has been mischievously withheld by ED. It was also submitted that even prior to disbursal of the loan amount in question, construction was commenced with the funds of the promoters.

It was submitted that there is no siphoning or misappropriation of loan amount and the amount alleged to be siphoned off was in fact the money that was paid back by AHPL under the instructions of the turnkey contractor to the persons who supplied material and rendered services to AHPL before disbursal of the said loan.

Advocate Tanveer Ahmad Mir also represented businessman RajSingh Gehlot argued that the accused is an old and ailing man with firm roots in the society and he is neither a flight risk nor in a position to tamper with the evidence nor influences the witnesses and he deserves to be admitted on bail.

Last year, the ED had initiated an investigation under PMLA on the basis of an FIR registered by State ACB, Jammu against Aman Hospitality Pvt Ltd (AHPL) and its Directors for money laundering in the construction and development of the 5-star ‘Leela Ambience Convention Hotel’ situated near the Yamuna Sports Complex in Delhi, the investigation agency said.

It stated that investigation under PMLA revealed that a huge part of a loan amount of more than Rs 800 crore, which was sanctioned by a consortium of banks for the hotel project, was siphoned off by AHPL and Raj Singh Gehlot and his associates through a web of companies controlled by them.

A month after Enforcement Directorate arrested Raj Singh Gehlot, owner of Ambience Mall in Gurugram, on money laundering charges, Central Bureau of Investigation has booked him and two other directors of his firm for allegedly siphoning off Rs 289 crore from J&K Bank.

The ED arrested Gehlot last month in an alleged bank loan fraud case worth more than Rs 800 crore. He was arrested under the Prevention of Money Laundering Act, 2002 (PMLA) for committing bank fraud against the Jammu and Kashmir Bank Consortium.

KMC’s Zonal Officer Rajesh Kumar Gupta told PTI that the shopping mall was sealed for not paying the civic body’s dues of Rs 13,36,24,712 that comprises property tax of Rs 10,44,88,848 and the interest of Rs 2,91,35,864.



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RBI extends curbs on UP-based People’s Co-operative Bank, BFSI News, ET BFSI

Banking & Finance

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Mumbai, The Reserve Bank of India (RBI) has extended restrictions on People’s Co-operative Bank Limited, Kanpur, for a further period of three months from September 11 to December 10.

The bank has been under restrictions since June 10, 2020, through the directives issued under Section 35A of the Banking Regulation Act, 1949 (AACS).

“The validity of the directive, which was last extended up to September 10, 2021 has further been extended for a period of three months from September 11, 2021 to December 10, 2021 vide directive DOR.MON.D-35/12.28.059/2021-22 dated September 8, 2021 subject to review,” said an RBI statement on Saturday.

Section 35A of the Banking Regulation Act, 1949 gives the central bank power to give directions to banks and can take action, to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company.

As per the directives, the Kanpur-based co-operative bank has been barred from granting fresh loans and accepting deposits for six months without prior approval of the RBI, due to its weak financial position.

“In particular, no amount of the total balance across all savings bank or current account or any other account of a depositor may be allowed to be withdrawn,” the RBI had said in its statement on June 11, 2020, when it had imposed the restrictions.



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CBIC Extends Due Dates To File These GST Forms: Check Report

Personal Finance

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Taxes

oi-Vipul Das

|

The Central Board of Indirect Taxes and Customs (CBIC) has extended due dates to file several Goods and Services Tax (GST) forms. The government has earlier given taxpayers solace by lowering or eliminating the late penalty for non-filing FORM GSTR-3B for tax periods from July 2017 to April 2021 if the returns were filed between June 1, 2021 and August 31, 2021. The deadline to apply for the late fee amnesty scheme has now been extended from August 31, 2021 to November 30, 2021, according to the statement issued by CBIC.

CBIC Extends Due Dates To File These GST Forms: Check Report

“Based on the multiple representations received, Government has also extended the timelines for filing of application for revocation of cancellation of registration to 30.09.2021, where the due date of filing of application for revocation of cancellation of registration falls between 01.03.2020 to 31.08.2021. The extension would be applicable only in those cases where registrations have been cancelled under clause (b) or clause (c) of sub-section (2) of section 29 of the CGST Act,” reported CBIC.

For the period of 27.04.2021 to 31.08.2021, companies can file FORM GSTR-3B and FORM GSTR-1/ IFF utilising an electronic verification code (EVC) instead of a Digital Signature Certificate (DSC). According to CBIC, the deadline for the same has been extended until October 31, 2021.

The above extension of the late fee amnesty scheme’s deadline and the deadline for submitting an application for the abolishment of registration cancellation will benefit a large number of taxpayers, particularly small taxpayers, who were unable to submit their returns within the deadline due to a variety of factors, most notably the COVID-19 pandemic’s dilemmas, due to which registrations were revoked. As a big relief to them, CBIC has mentioned that “taxpayers are requested to avail the benefit of these extensions at the earliest to avoid last minute rush.”

Story first published: Saturday, September 11, 2021, 14:00 [IST]



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Reserve Bank of India – Tenders

Tenders

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Reserve Bank of India, Kanpur invites e-tender for ‘Providing and applying SRI (Solar Reflective Index) paint coating over the terrace of AOB and old Building at RBI, Kanpur.’ The e-tendering shall be done through the e-tendering portal of MSTC Ltd (https://mstcecommerce.com/eprochome/rbi). All eligible and interested companies / agencies / firms must register themselves with MSTC Ltd through the above-mentioned website to participate in the e-tendering process. The Schedule of e-tender is as follows:

E-Tender No. RBI/Kanpur/Estate/104/21-22/ET/143
a) Estimated cost ₹8,64,000/- (Rupees Eight Lakhs Sixty-Four Thousand only) (Including GST @18%)
b) Mode of e-tender e-Procurement System (Online Bid through www.mstcecommerce.com/eprochome/rbi)
c) Type of e-tender Limited (Only for firms empaneled with RBI, Kanpur under more than Rs. 10 Lakh and up to Rs. 50 Lakh category of Civil Works)
d) Date of NIT available to parties to download September 10, 2021 from 07.00 PM
e) Pre-bid meeting (Offline) October 06, 2021 at 10.30 AM
Venue: Estate Department, 2nd Floor, Reserve Bank of India, Mall Road, Kanpur, Uttar Pradesh-208001
f) EMD through NEFT Only successful bidder shall deposit only 2% of the contract value.
To be paid through NEFT / Net banking to A/c No. 186003001, IFSC RBIS0KNPA01 (where ‘0’ represents zero)
g) E-Tender Fees NIL
h) Date of Starting of e-tender for submission of on-line Bid at http://mstcecommerce.com/eprochome/rbi October 06, 2021 from 02.00 PM
i) Last date of submission of EMD Within 10 working days after intimation provided by the Bank.
j) Date of closing of online e-tender for submission of Bid October 20, 2021 till 10.00 AM
k) Date & time of opening of online Bid October 20, 2021 from 12.00 PM
l) Validity of the e-tender 90 days from the date of opening of online bid
m) Transaction Fee (Non-refundable) (To be paid separately by the tenderers to MSTC vide MSTC E-Payment Gateway for participating in the e-tender) As charged by MSTC Ltd.

2. Applicants intending to apply will have to satisfy the Bank by furnishing documentary evidence in support of their possessing required eligibility and in the event of their failure to do so, the Bank reserves the right to reject their bids.

3. The Bank is not bound to accept the lowest tender and reserves the right to accept either in full or in part any tender. The Bank also reserves the right to reject any or all the tenders, either in whole or in part, without assigning any reason thereof.

4. Any amendments / corrigendum to the tender, if any, issued in future will only be notified on the RBI Website and MSTC Website as given above and will not be published in the newspaper.

Regional Director
Reserve Bank of India
Kanpur

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Reserve Bank of India – Press Releases

Press Releases

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The Reserve Bank of India (RBI) has extended the Directions issued to the People’s Co-operative Bank Limited, Kanpur (Uttar Pradesh) for a further period of three months from September 11, 2021 to December 10, 2021, subject to review. The bank has been under directions since June 10, 2020 vide directive DoS.CO.UCBs-North/D-1/12.28.059/2019-20 dated June 09, 2020 issued under Section 35 A of the Banking Regulation Act, 1949 (AACS).

The validity of the directive, which was last extended up to September 10, 2021 has further been extended for a period of three months from September 11, 2021 to December 10, 2021 vide directive DOR.MON.D-35/12.28.059/2021-22 dated September 08, 2021 subject to review. A copy of the directive dated September 08, 2021 is displayed at the bank’s premises for the perusal of public.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/847

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CBDT, BFSI News, ET BFSI

Banking & Finance

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In order to make disinvestment deals of ailing state-owned firms more attractive for strategic investors, the government on Friday allowed erstwhile public sector companies to carry forward losses to be set off against future profits. The Central Board of Direct Taxes (CBDT) in a clarification said that Section 79 of the Income Tax Act shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment.

“Accordingly, loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company,” the CBDT under the Finance Ministry said in a statement

The relaxation, it added, will cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold 51 per cent of the voting power of the erstwhile company.

Section 79 of the Income Tax Act deals with carry forward and set off of losses in case of companies.

“In order to facilitate the strategic disinvestment, it has been decided that Section 79 of the Income-tax Act, 1961, shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment,” it said.

Necessary legislative amendments for the above decision shall be proposed in due course of time, the statement said.

Commenting on clarification, Nangia Andersen LLP Head (Government and Public Sector Advisory) Suraj Nangia said “the Government has allowed that even after change in shareholding of such ailing PSUs due to transfer of shares in such PSUs by Government to strategic investors, past losses of such PSUs will be allowed to be carried forward for set off against future profits.”

This will make disinvestment deals of ailing PSUs more attractive for strategic investors, he said.

Under normal tax provisions, he said, without this relaxation, past losses of a company are not allowed to be set off, if there is change in majority shareholding of a company (i.e. 51 per cent).

“It may be noted that such relaxation will be available, only till the strategic investor retains at least 51 per cent in the PSU after takeover. In case the strategic investor’s shareholding falls below 51 per cent, such relaxation will be withdrawn,” he added.

The ambitious divestment pipeline also includes loss making national carrier Air India for which the deadline for submission of financial bids is September 15.

The government will be selling budget airline Air India Express and Air India’s 50 per cent stake in Air India SATS Airport Services Private Limited (AISATS) besides offloading its entire stake in loss-making Air India.

The deadline for submission of Expressions of Interest (EoI) or preliminary bids was extended five times earlier before closing it in December last year.

Finance Act, 2021 has amended section 72A of the Income-tax Act, 1961 that deals with amalgamation of a public sector company (PSU) which ceases to be a PSU (erstwhile public sector company), as part of strategic disinvestment, with one or more company or companies and carry forward of losses in case of change in shareholding following sale by the government.

The Centre budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company, in the current fiscal year.

As part of the privatisation strategy, the government aims to complete the strategic sale of Bharat Petroleum Corporation Ltd (BPCL), Shipping Corp, Container Corporation, Neelachal Ispat Nigam Ltd, Pawan Hans, Air India, among others, by March 2022.

So far this financial year, Rs 8,368 crore has been mopped up through minority stake sales in PSUs and the sale of SUUTI (Specified Undertaking of the Unit Trust of India) stake in Axis Bank.



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Things should return to normal with economy back on track: Bajaj Allianz General chief Singhel

Banking & Finance

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Bajaj Allianz General Insurance Company Limited (BAGIC), the country’s largest private general insurer by revenue and profits, sees the company’s overall business operations returning soon to pre-pandemic level with the economy getting back on track, a top official said.

As in previous years, this 20-year old private general insurer is hopeful of outdoing overall industry growth (estimated at 12-15 per cent) even during this fiscal with the recent uptrend in business led by health insurance followed by growth in motor and property insurance, Tapan Singhel, Managing Director & Chief Executive Officer, told BusinessLine in an interview.

“I can comfortably say, with no further waves withstanding, things should return to normal with the economy getting back on track. The growth of the economy and insurance industry is directly proportional to each other. Hence the better the Indian economy does, the better the insurance industry does “, he said when asked if business operations had returned to pre-pandemic level..

As of end August this fiscal, BAGIC recorded gross direct premium of ₹ 6468 crore, up 18 per cent over ₹ 5471 crore in same period last fiscal. The overall industry stands at about 14 per cent growth for all general insurance companies.

Singhel also hoped to see government playing an even bigger role in improving the healthcare system in the coming days and noted that a “holistic” approach that covers aspects like need to reduce GST on health insurance ( from current 18 per cent to say 5 per cent) and putting in place a regulator for hospitals was the need of the hour to solve the current problem of absence of an efficient healthcare system in the country.

Asked how had Covid-19 impacted BAGIC’s business, Singhel said that the impact of Covid on general insurance industry was predominantly on health space. BAGIC too felt the heat with loss ratios going up just as it happened for the industry. “Loss ratio for health has not been very good for us and that is for the entire industry. While Covid created awareness and sales of health policies went up, claims also got created. The good part is that the industry supported Covid 19 claims. You must also understand health reinsurance was not available internationally for Covid. Industry settled nearly ₹ 30,000 crore claims on its own internal resources.

Every industry affected by Covid has asked for government relief. Did you hear insurance industry asking for any such relief from the government inspite of paying so much claims?”, Singhel asked.

Singhel asserted that it would not be right to describe 2021-22 as a “bad year” for BAGIC, noting that settling claims was part of the business.

Medical inflation

Asked about customers anxiety over increase in health insurance premiums in the current pandemic times, Singhel asserted that Covid is not the reason why health insurance premiums will go up. “People are not understanding this. There is no regulator for hospitals. Premium increase on health policies is very natural phenomena because of the dichotomy in the system. The problem is you can’t increase health premium for three years. It’s a kind of lock-in. Every premium increase has to go to regulator and IRDAI allows this only once in three years. With average medical inflation of about 12-15 per cent per annum, price rise in premium translates to cover 45 per cent medical inflation over three years. Insurance premiums is locked for three years, while medical bills are moving up every year. Premium increase will have to happen to match the previous inflation”, he said.

Singhel said that General insurance industry had already approached the insurance regulator seeking yearly adjustments to insurance premiums rather than once in three years.

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