Budget 2012: A new entity for helping Public Sector Banks

Finance Minister Pranab Mukherjee has proposed setting up of a company to hold the government's stake in banks, a move aimed at overcoming the trouble of periodic capital investment in public sector lenders that upsets fiscal calculations. The new holding company may also eliminate the embarrassment of knocking at the doors of Life Insurance Corporation, as it did this year, to bail out the government by investing policy holders' funds in public sector banks. The move also raised questions about governance standards at the state-run insurer. The...

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IDBI Bank prices 100 million Swiss franc bonds at MS+274 bps

India's IDBI Bank priced its three and half year Swiss franc bond issue at mid-swaps plus 274 basis points, becoming the first lender to raise funds in this currency in 2012. The state-run bank launched its at least 100 million Swiss franc bond issue earlier in the day and Deutsche Bank is the sole arranger of the deal. "Against our launch size of 100 mln Swiss Francs we have got an oversubscription on the very first day of the launch," said Melwyn Rego, executive director at the bank. Settlement in Swiss franc issuances take 3 to 4 weeks from...

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Part of your health check just got tax-free

Spending on your health check-ups can also help you save tax in the new financial year. Finance Minister Pranab Mukherjee on Friday introduced a deduction of Rs 5,000 for expenses incurred on preventive health care under section 80D. Under this, citizens can save tax for the monies spent by them on their health check-ups. This will include various medical tests that individuals are asked to undergo at hospitals. The amendments made will be effective from April 1, 2012. In addition, Section 80DDB, that allows deduction for the medical treatment...

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Govt allows lenders to raise Rs 60Kcr via tax-free bonds

To encourage investment in the infrastructure sector, financial institutions have been allowed to raise about Rs 60,000 crore from tax-free bonds in 2012-13. "For the year 2011-12, tax-free bonds for Rs 30,000 crore were announced for financing infrastructure projects. I propose to double it to raise Rs 60,000 crore in 2012-13," Finance Minister Pranab Mukherjee said, while presenting the Union Budget 2012-13 in Parliament. "This includes Rs 10,000 crore for NHAI, Rs 10,000 crore for IRFC, Rs 10,000 crore for IIFCL, Rs 5,000 crore for HUDCO, Rs...

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Budget unveils tax-exempt Rajiv GESS

In order to increase retail participation in the capital market, Finance Minister Pranab Mukherjee today proposed a tax exemption scheme for new investors. The Rajiv Gandhi Equity Savings Scheme will allow 50 per cent tax deduction for those whose annual income is below Rs 10 lakh and who invest up to Rs 50,000 in stocks. The scheme will have a lock-in period of three years, Mukherjee said while announcing the budget proposals for 2012-13. The move is first-ever tax benefit for direct investments in stocks. However, Secretary Department of Economic...

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Budget: Scanner on property, gold buys

Mandatory reporting of assets held by individuals abroad and re-opening of I-T return filings up to 16 years are among the steps being proposed by the government to tackle the menace of black money. "I propose a series of measures to deter the generation and use of unaccounted money," Finance Minister Pranab Mukherjee said while presenting the Budget for 2012-13 today. The government has also proposed slapping a tax of 30 per cent on undisclosed money, credits, investments and expenditures, irrespective of the slab of income. Strengthening its...

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Budget: Gold, daily use items dearer

Almost all the manufactured items used in every day life will become costlier, while luxury cars, gold, eating out at restaurants or hotel accommodation will become even more expensive after a steep hike in tax rates proposed in Budget 2012-13. Cigarettes and bidis will also become dearer as Finance Minister Pranab Mukherjee has proposed to tax these items more in the Budget for 2012-13. With service tax being hiked to 12 per cent from the existing 10 per cent except in a few items, common man will have to pay more while travelling by air or hiring...

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Budget proposes no big ticket reforms

The Budget for 2012-13 hiked excise duty and service tax by 2 per cent across-the-board to raise Rs 45,940 crore and offered marginal relief to individuals in income tax, stoking fears of adding to inflation but contained no big ticket reforms. Prices of all non-oil goods are likely to go up on account of the 2 per cent raise in the effective rate of excise duty of 10 per cent and service tax as well as on account of the widening of tax net to all services, except 17. Quoting from Shakespeare's immortal words in the 'Prince of Denmark' that "I...

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Interest subvention scheme for farmers to continue

To encourage prompt repayment of bank loans, the Government will continue with the additional three per cent interest subvention scheme for farmers, said the Finance Minister, Mr Pranab Mukherjee. Under the existing interest subvention scheme, farmers get short-term crop loans at seven per cent interest. If the loan to the bank is promptly paid then the effective rate of interest to the farmer works out to four per cent a year due to the additional interest subvention. “The Government is giving interest subvention to improve the loan repayment...

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Interest up to Rs 10,000 on savings deposits out of tax net

The plain vanilla savings bank (SB) deposit could turn a tad attractive. The Finance Minister, Mr Pranab Mukherjee, on Friday said individual taxpayers will be allowed a deduction of up to Rs 10,000 on interest from these deposits. In his Budget speech, the Minister justified the move stating that it would help a large number of small taxpayers with salary incomes up to Rs 5 lakh and interest from savings bank accounts up to Rs 10,000 as they would not be required to file income-tax returns. No rush If one weighs the benefit of 4 per cent tax-free...

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PNB distributes free medicines

On the occasion of World Disabled Day, Punjab National Bank distributed medicines to the disabled inmates of St. Antony's Sadan, Ernakulam. Mr S. Ranganathan, General Manager, handed over the medicines to the inmates of the Sadan, a Centre for disabled people. The bank has also sponsored ceiling fans for the new building of the Centre. Speaking on the occasion, he said that PNB is always in the forefront in fulfilling its CSR initiatives. The bank is rendering similar type of services in various parts of the country. Mr K. V. Rajesh, Deputy General...

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Muthoot Finance not interested in acquiring Thomas Cook India

The largest gold loan company by asset portfolio Muthoot Finance today said that it was not looking at buying out the troubled travel and money changer firm Thomas Cook India, which has been put on the block by its British parent. "It is true that we were approached for Thomas Cook. But after due diligence, we decided not to follow it," Muthoot Finance managing director George Alexander Muthoot told PTI from Thiruvanathapuram. Maintaining that the deal would have made perfect business fit for his company, he, however, parried queries on the reason...

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DCB Bank raises Rs 94 crore via QIP; to mop up Rs 99 crore more

Medium-sized private lender DCB Bank said it has raised Rs 94 crore through a qualified institutional placement (QIP) and will get an additional Rs 98.75 crore through preferential allotment of shares to enhance its core capital and reduce promoters' holding. "The capital raised will certainly help us in executing our plans for growth in the near future," DCB Managing Director and Chief Executive Murali M Natrajan said in a statement here. The bank's tier-I capital as of the December quarter stood at 11.15 per cent. The lender has not specified...

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Loan fraud: Youth dupes ICICI bank of Rs 2.5 cr

An ICICI Bank sales executive, arrested for allegedly duping the bank of Rs 2.5 crore by making it disburse loans against fake insurance policies, has been remanded in police custody for three days by a Delhi court. Metropolitan Magistrate Satish Arora handed 29-year-old Prem Prakash over to police for his custodial interrogation, while remanding his two woman accomplices, Vandana and China, to judicial custody till March 29. The trio were arrested on charges of causing a loss of Rs 2.5 crores to bank by making it disburse the loan against fake...

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At a time when most banks have failed to convince the Reserve Bank of India (RBI) in allowing them to set up subsidiary companies, Federal Bank has revived its wholly-owned arm to expand its retail loan business. The Kerala-based private sector lender’s arm, Fedbank Financial Services, has started a gold loan business and plans to offer car loans and loans against property, in addition to its distribution business. It would also enter the wealth management space at a later date, to provide services to high net worth clients. While RBI has not issued...

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Higher govt borrowing may not eat up public credit: RBI

Reserve Bank Deputy Governor KC Chakrabarty today said private credit demand will not be crowded out as a result of higher market borrowing by the government even as the fiscal deficit target for next fiscal is pegged at 5.1%. "The idea of 5.1% fiscal deficit should not deprive credit needs of the society," he told PTI at an HDFC Bank event here. In the FY13 Budget, Finance Minister Pranab Mukherjee has targeted a fiscal deficit of 5.1% and a net market borrowing of Rs 4.79 lakh crore to overcome it. When asked if the higher fiscal deficit, as...

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ICICI Bank to raise Rs 10 bn via bonds

Chanda Kochchar-led ICICI Bank is planning to raise at least 10 billion rupees ($198.47 million) via 6-year bonds at 9.20 percent semi annual coupon, two sources with direct knowledge of the deal said on Friday. The bonds have been placed with the country's largest life insurer, the state-run Life Insurance Corp of India (LIC), said the sources. ($1 = 50.3850 Indian rupees) Source: Financial Expr...

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SBI may cut rates on select loans

Your wait for a reduction in lending rates may soon be over, if the country’s largest commercial bank has its way. State Bank of India (SBI) is weighing options to pare interest rates on certain sector-specific loans, despite the Reserve Bank of India (RBI) keeping the repo rate unchanged at its mid-quarter policy review. The bank’s asset-liability committee (ALCO) is scheduled to meet tomorrow to review lending rates. I see some room for cutting lending rates following the cut in the cash reserve ratio (CRR) last week. It is not right for me to...

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ICICI fined Rs 50K for no cashless service

ICICI Lombard General Insurance Company has been directed by a Delhi consumer forum to pay Rs 50,000 as compensation to one of its policy holders for harassing him by not providing cashless medical facility. The District Consumer Disputes Redressal Forum held the company "deficient in service" for not providing cashless facility and remaining silent on the request of the consumer who provided all necessary information. "The deficiency in service on the part of the insurance company is its non-action on the request of the complainant to provide...

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Axis Bank working on multi-currency services on travel card

Encouraged by the success of its travel cards, Axis Bank is looking to offer them in multiple currencies and with valued added services. The private sector bank is also working on other specialised products in the travel cards segment. These include a bundled product that can be used for public transport in Singapore. Another one is a special card for students going abroad, jointly with ISEC (International Student Exchange Card) so that they can avail themselves of discounts at merchant outlets. The bank, which is the biggest issuer of travel cards...

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