Don't cancel partial withdrawal from EPF

New Delhi: The Labour Ministry today favoured the provision allowing subscribers partial withdrawal of money from Employees Provident Fund(EPF) to continue and also said there is no move to impose a lock-in period.

The Labour Ministry stand on partial withdrawal came in response to a suggestion by the Finance Ministry that liberal advances and withdrawal from EPF account should be shunned to help achieve old-age income security for employees.

"Ministry of Labour and Employment has replied to the Ministry of Finance mentioning the need for continuation of the provision for partial withdrawal from provident fund account of the subscribers," Labour and Employment Minister Mallikarjun Kharge said in the Lok Sabha.

The Finance Ministry is of the view that by not adhering to "one instrument, one policy objective" most employees retired with as less as Rs. 35,000 in their account.

In a written reply, he also said there was no move to impose a lock-in period for EPF withdrawal.

However, he said as per a notification issued January 15 this year, interest will not be paid on inoperative account from April 1.

He said the total number of inoperative accounts was estimated to be around three crore, with an amount of Rs. 8,318 crore lying in such accounts as of March 31, 2010.

Source: Financial Express

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Sebi clears JSW-Ispat deal

New Delhi: Market regulator Sebi has cleared the acquisition of Ispat Industries by JSW Steel, paving the way for the acquirer to make a fresh offer for buying up to 20 per cent stake from public shareholders.

Sebi has issued its final observations on the Rs. 1,329 crore open offer for acquisition of 20 per cent stake in Ispat from public shareholders by the acquirer JSW Steel.

The open offer was earlier scheduled to begin on February 12, but got delayed due to lack of Sebi approval.

The revised schedule for the open offer is likely to be announced soon, as the market regulator has now cleared it.

In December 2010, Sajjan Jindal-led JSW Steel had entered into a Rs. 2,157 crore deal to acquire a 41.29 per cent stake in Ispat through preferential issue of fresh shares at a price of Rs. 19.85 apiece.

The deal has an enterprise value of about Rs. 12,000 crore after paying all the debts and a working capital loan of Ispat Industries, estimated to be about Rs. 9,500-9,700 crore.

As part of the deal, JSW Steel had offered to acquire an additional 20 per cent stake from public shareholders at a price of Rs. 20.54 per share in Ispat, aggregating to Rs. 1,329.43 crore.

Any company buying more than 15 per cent in a listed company needs to mandatorily make an offer to buy 20 per cent additional stake from public shareholders and a Sebi approval is required for this offer.

JSW Steel had sought Sebi approval in December 2010 itself, but the approval got delayed as regulator had sought some clarifications on the deal.

Source: Financial Express

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Taxman to spare those earning < Rs. 10L

New Delhi: The Income Tax Department today said that tax returns filed by senior citizens above 60 years and small taxpayers with gross total income of less than Rs. 10 lakh will not be scrutinised in a routine manner.

"It has been decided that during the financial year 2011-12, cases of senior citizens and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be subjected to scrutiny only where the Income Tax department is in possession of credible information," Central Board of Direct Taxes said in a statement.

Appreciating the concerns of these taxpayers and with a view to mitigate their hardships, it said, Central Board of Direct Taxes has reviewed its scrutiny selection procedure.

Senior citizens for this purpose would be individual taxpayers who are 60 years of age or more. Small taxpayers would be individual and HUF taxpayers whose gross total income, before availing deductions does not exceed Rs. 10 lakh, it said.

Scrutiny of income tax returns is an important mechanism for ensuring taxpayer compliance and to counter tax-evasion, it said.

Source: Financial Express

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Union Bank to outsource work for 1,000 ATMs

Public sector lender Union Bank of India plans to outsource work for the installation and upkeep of 1,000 ATMs as part of its plans to scale up alternative channels for business operations.

Through outsourcing, the lender would set up ATMs in nine zones, including Mumbai, Delhi, Lucknow and Bhopal, according to the Request for Proposal (RFP) floated for the rollout plan.

As of December 2010, the bank’s total outlets, including branches, stood at 5,017. Its ATM network stood at 2,516 units.

Private sector Axis Bank has entered into an agreement with two third-party service providers to increase its ATM count to more than 9,000 within the next 18 months. It has inked contracts with Prizm Payment Services and AGS Infotech to set up and manage 5,000 ATMs on a purely variable model. The bank said it might install second and third ATMs at same site. Union Bank has retained the option to buy back the ATM and site infrastructure after three years. The buyback value would be linked to the years of operation. The initial investment for an ATM will be assumed at Rs 8.3 lakh.

The public sector lender has firmed up plans to use alternative delivery channels like ATMs, online banking, phone banking, mobile banking and banking correspondents. The bank has set up a separate department to oversee the transactions recorded in alternative channels.

These alternative channels, which until a couple of years back, contributed barely eight per cent of the bank’s transactions, are poised to account for 50 per cent of its transactions by the end of 2010-11. In 2009, the alternative delivery channels accounted for 31.71 per cent of the overall transactions. The share of the electronic mode rose to 45.49 per cent by December 2010.

Union Bank would use alternative channels for financial inclusion to cover around 3,500 unbanked villages across the country by March 2012.

Source: Business Standard

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HDFC Bank raises its base rate by 50 bps, BPLR by 75

HDFC Bank, the second largest private one, has raised its minimum lending rate, or base rate, by 50 basis points and the benchmark prime lending rate (BPLR) by 75 basis points. The new base rate is 8.7 per cent and its BPLR has been revised to 17.25 per cent.

The new base rate is 8.7 per cent and the BPLR has been revised to 17.25%.

This is the second time in less than a month that it has increased its minimum lending rate. It had raised the base rate by 45 basis points in the last week of February.

With this latest rise, HDFC has increased its base rate by 145 basis points since it was introduced on July 1. The BPLR rose by 150 basis points during this period.

HDFC also raised interest rates on select term deposits by 25-100 basis points. The bank now offers a maximum 9.25 per cent rate on deposits of two years and 16 days tenure.

RATE CARD
Bank	Base Rate (%)	Benchmark Prime  Lending Rate (%)	Effective
SBI	8.25	13.00	14-Feb
PNB	9.50	13.00	1-Feb
Bank of Baroda	9.50	13.75	4-Feb
ICICI Bank	8.75	17.50	24-Feb
HDFC Bank	8.70	17.25	14-Mar
Axis Bank	8.75	16.50	19-Feb

The latest round of rate rises from domestic lenders began when the country’s largest commercial bank, State Bank of India (SBI), raised its lending rates by 25 basis points in mid-February. SBI’s minimum lending rate is currently 8.25 per cent and its BPLR is 13 per cent.

On an average, banks have raised their lending rates at least four times in the second half of the current financial year. Deposit rates have also hardened by up to 200 basis points during this period.

Top private lenders, including ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank, have raised their lending and deposit rates since February.

Source: Business Standard

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