Raising liquidity ratios “or other liquidity buffers could pose a drag on their earnings” said AM. Karthik, head of financial sector ratings at ICRA. Lenders will also have to manage their treasuries more effectively, which would entail additional operating costs, he said. … [Read more...] about RBI likely to propose stricter rules for shadow banks: sources
What lies ahead?“IL&FS will not be allowed to collapse” — that was the statement of LIC chairman V.K. Sharma after a meeting with Finance Ministry officials last week. The banking regulator has also avoided any knee-jerk reaction so far and the strategy of the central bank is to be non-disruptive. The banking regulator also met the large shareholders of IL&FS, though the RBI has refrained from commenting on the matter. The IL&FS has initiated a three-way strategy to tide over the crisis: offer a rights issue, sell assets to repay debt and address liquidity issues till the asset sale starts. It is planning to raise ₹4,500 crore through a rights issue in which it will be issuing 30 crore equity shares at ₹150 per share. Its board has also approved the recapitalisation of group companies of ₹5,000 crore in IL&FS Financial Services, IL&FS Transportation, IL&FS Energy, IL&FS Environment and IL&FS Education. … [Read more...] about What is the IL&FS cash crunch all about?
The Delhi High Court on Monday directed the administrators of Punjab and Maharashtra Co-operation (PMC) Bank to decide afresh about the applications of depositors seeking money for medical and educational emergencies. The court also directed the petitioner to submit the list of depositors before administrators, which included medical and educational emergencies within three weeks. The Bench of Justice DN Patel and Justice Jyoti Singh said, "We direct the depositors to approach the administrators of PMC Bank giving the need in detail, for which they would require the money. Administrator to decide within two weeks. They would inform the decision through an affidavit." "We have something in our mind while petition sought the issuance of direction to RBI to make a mechanism in this regards," the Bench said. The direction of the High Court came on Monday during the hearing of an interim application in an ongoing Public Interest Litigation (PIL) by activist Bejon Kumar Mishra through … [Read more...] about Delhi HC directs PMC Bank to consider afresh applications of depositors seeking money for emergencies
Farmers face hardship on account of levy of tax on capital gains, and accrued interest on enhanced compensation, when their agricultural land is acquired by the Government. The Government believes that capital gains on such acquisition should be exempt from tax. There should also be no deduction of tax at source on the interest earned on enhanced compensation for acquisition of such land. … [Read more...] about Finance minister’s Budget Speech
NEW DELHI: The finance ministry is looking at other avenues for affordable capital infusion, including setting up of a Bank Investment Company (BIC), as the RBI has raised concern over the issuance of zero coupon bonds for recapitalisation of public sector banks (PSBs), sources said.Setting up BIC as a holding company or a core investment company was suggested by the P J Nayak Committee in its report on 'Governance of Boards of Banks in India'.The report recommended transferring shares of the government in the banks to the BIC which would become the parent holding company of all these banks, as a result of this, all the PSBs would become 'limited' banks. BIC will be autonomous and it will have the power to appoint the board of directors and make other policy decisions about subsidiaries.The idea of BIC, which will serve as a super holding company, was also discussed at the first Gyan Sangam bankers' retreat organised in 2014, the sources said. They added that it was proposed that the … [Read more...] about Finance ministry looks at holding company for PSB recap