UCO Bank moves HC against IT order levying fine on it

NEW DELHI: The United Commercial Bank has moved the Delhi High Court challenging an Income Tax notice that slapped a penalty of over Rs 54 lakh on its branch for not making tax deduction at source on a fixed deposit account worth Rs 7.7 crore opened by the HC.

A bench of Chief Justice Dipak Misra and Justice Sanjiv Khanna, before whom the bank's plea came up for hearing recently, has referred the matter to a larger bench and fixed July 15 for further hearing.

The bank approached the court following the I-T department's March 29 order that the high court branch of UCO Bank was liable to pay more than Rs 54 lakh for violation of Income Tax act for not deducting TDS amount on the interests generated on a Fixed Deposit Receipt of more than Rs 7.7 crore.

The department has issued notice to the bank for its failure to deduct tax on the interest received by the court's Registrar General (RG).

Filing a petition through its standing Counsel Sarfaraz Khan, the bank submitted that the RG is only the custodian of the deposited amount but not the beneficiary and the act would not apply on it.

While hearing various litigations, the court had directed the litigants to deposit the disputed amount with the RG till the final disposal of the case and the RG had deposited them in the bank in the form of FDRs.

In the petition, UCO's counsel sought the court's intervention as the bank has got thousands of FDRs from the court and the department could issue large number of similar notices.

In September 2004, the court had passed an interim order in the case of Union of India versus Oriental Building Furnishing Company Ltd. and directed the government to deposit Rs 7,07,45,550 by way of an FDR in the name of Registrar General, the Delhi High Court.

Urging the court to quash the March 29 order of the I-T department to pay the penalty, the bank said, "Declare that the non-deduction of tax at source from the deposits made by the bank in the name of RG, Delhi High Court under the interim directions is not violative of Income Tax act".

Source: EconomicTimes

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RBI asks Tamilnad Mercantile Bank to list shares through an IPO

TUTICORIN, TAMIL NADU: The Reserve Bank of India has asked the Tamilnad Mercantile Bank (TMB) to list its shares through an IPO, a top official of the bank said on Friday. "We are one of few unlisted banks in the country and the Reserve Bank of India wants us to get listed as soon as possible .... We would be considering this proposal provided a couple of pending cases are resolved," A K Jagannathan, managing director and chief executive officer of the Nadar-dominated , Tuticorin, Tamil Nadu-based bank, said. He was speaking after the release of the bank's results.

The RBI suggestion is important as a few weeks ago the banking regulator had declined to acknowledge the sale of a 33.54% stake by well-known serial entrepreneur C Sivasankaran to a group of investors. The group's members included Rajat Gupta, former McKinsey chief, and Ramesh Vangal, the former Asia Pacific president for PepsiCo Foods. The investors were acting as a group, the banking regulator said and asked them to cut their stake to about 5%.

Source: EconomicTimes

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Lakshmi Vilas Bank revises term deposit interest rates

CHENNAI: Private sector Lakshmi Vilas Bank has revised its interest rates for term deposits that will be effective from May 9.

The existing interest rates for 15-29 and 30-45 days period has not been raised from the present 3.25 and 3.75 per cent, respectively for both regular and senior citizens.

However, for term deposits with maturity period of 46-90 days, the interest rates have been revised from 4.25 per cent to six per cent, Lakshmi Vilas Bank said in a statement.

Source: EconomicTimes

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UCO Bank to open 37 SMEs across India in FY'12

MUMBAI: To tap the high-growth potential in the small and medium enterprises (SME) sector, public sector lender UCO Bank plans to open 37 SME hubs pan-India in FY'12 to facilitate single window clearance for loans.

"SMEs have been accepted as the engine of economic growth. We want to focus on this sector and so have planned to set up 37 hubs that will cater to the loan requirements of SMEs," UCO Bank Chairman and Managing Director Arun Kaul told PTI here.

The bank has already set up two hubs -- in Delhi and Mumbai -- for disbursing loans to SMEs.

By 2011-end, the bank plans to open 26 hubs in various cities, including Delhi, Coimbatore, Pune, Bangalore, Chennai, Chandigarh, Hyderabad, Ahmedabad, Ludhiana, Jaipur, Vellore, Surat, Ernakulam and Mumbai.

"We have formulated a plan to set up 16 hubs by June this year and 10 by September-end. We want to ensure the availability of adequate and timely credit to this sector," he said.

The bank wants to double its credit flow to SMEs in the next 1-2 years. "Of the total disbursals currently, around 10 per cent goes toward SME loans. We now want to double the flow of credit to the sector in the next 1-2- years," he said.

The process for disbursal of loans would be completed in 21 days from the date of application, he said.

The bank provides working capital and term loans to SMEs engaged in the manufacturing process with an investment in plant and machinery/equipment of above Rs 25 lakh up to Rs 10 crore.

It also provides loans to enterprises engaged in the services sector with a minimum investment of above Rs 10 lakh and below Rs 5 crore.

Source: EconomicTimes

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Indian Bank FPO to hit market by August

Public sector Indian Bank said it will raise over Rs 61 crore by way of further share sale offer, which is likely to hit the market by August.

"Indian Bank has received the approval of government of India to raise an additional equity capital of Rs 61.4 crore through FPO. We plan to hit the market in July or August 2011," Indian Bank Chairman & Managing Director TM Bhasin said.

The bank will sell 6.14 crore shares with a face value of Rs 10 through the follow-on public offer (FPO).

The present size of equity capital of Indian Bank is Rs 429.77 crore, of which 80% is held by the government.

"With the raising of Rs 61.4 crore additional equity, the government of India stake will go down to 70%," Bhasin said.

The bank is in the process of filing the draft prospectus for the FPO and would soon appoint merchant bankers for the issue.

Source: Business Standard

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