Sebi likely to come out with a policy paper soon.
Promoters or issuers of foreign currency convertible bonds may be allowed to buy back the bonds if they go in for prepayment.
Interest charged by government lower than bank rates.
While ECBs are pure loans, FCCBs have an in-built option for the lender to convert them into equity of the companies on maturity. Both in ECB and FCCB, till maturity, the borrower is expected to make interest payments on the amount borrowed. Incidentally, the AAR ruling of October 10 had been sought by a non-banking finance company. Till October 31, NBFCs were not allowed to borrow funds from overseas in foreign currency.
A department committee, set up to look at ways to expand the TDS net, is scheduled to meet in Hyderabad to discuss the proposal. hile some services like contracts, construction and rentals are under the TDS net, a large number of services like beauty treatment, connectivity between mobile operators, event management, credit rating agencies, market research firms and authorised automobile service stations are not.
With the global financial crisis hurting more companies in developed countries, Indian insurance firms have hiked premium rates by 25-30 per cent for export credit insurance covers and have imposed a host of restrictions such as maximum liability and credit limit in case of single buyers.
ECBs may be allowed to put loans upto $ 500 million for rupee expenditure by Indian infrastructure companies under the automatic approval route. At present, such loans need RBI approval. The government may also raise the limit for dollar borrowings for rupee expenditure, which would need RBI approval. So, if a company is borrowing say $ 750 million, it can immediately access foreign funds up to $500 million without prior permission, but will need approval for the rest.
The screening of data is more intense in the case of foreign and some private banks which act as custodians for foreign institutional investors, according to sources close to the development. Indian banks, both public and private, send capital to their foreign offices for everyday requirements in the inter-bank market and for client commitments.
The government has sought data from the Reserve Bank of India to consider a proposal to enhance the investment limit for bank exposure to equity markets. This will be part of several measures to boost domestic institutional participation in the markets at a time when foreign institutional investors are exiting.
In a move to boost liquidity, the government and the Reserve Bank of India are considering a special window to enable banks with farm loan relief scheme arrears, a major factor impacting liquidity, to raise funds. The move will help inject liquidity into the system till Parliament approves the Rs 25,000-crore reimbursement.
With the government and the Reserve Bank of India taking steps to ease the liquidity crunch, home borrowers and small enterprises may get 25-50 basis points relief from high interest rates in the short term.
The finance ministry is likely to float a discussion paper next month on the proposed new income tax law, which aims to simplify the existing law and phase out tax exemptions.
'There has been an enormous amount of attention paid to issues like capital account convertibility, bank privatisation and bank priority sector norms. There are many other areas where reforms are less controversial, but perhaps as important,' the report of the high-level Committee on Financial Sector Reforms headed by Raghuram Rajan, a professor at Graduate School of Business, University of Chicago, said.
The Reserve Bank of India has initiated a review of the benchmarking system for pricing floating rate loans, a move that could impact 70 to 75 per cent of banks' loan portfolios.
Guidelines may be relaxed with strict quality checks.
The move comes at a time when four foreign banks - Standard Chartered, Hongkong and Shanghai Banking Corporation, American Express and Citibank -- have moved the Supreme Court with a special leave petition and the hearing for admission of SPL is on September 8. The committee is, however, expected to wait till the Supreme Court decides on the issue before finalising its recommendations. The committee is, however, expected to wait till the Supreme Court decides on the issue.
The Income Tax Department has put real estate firms, who developed housing projects for low- and medium-income groups, under the scrutiny for wrongful tax exemption claims.
The Central Board of Direct Taxes is considering a proposal to widen the ambit of the Annual Information Return to cover cash cards issued by non-banking financing companies in the country, official sources said. The AIR currently covers seven kinds of transactions, including cash deposits in savings bank accounts of over Rs 10 lakh in a year, credit card billing of over Rs 200,000 a year and purchase of property over Rs 30 lakhs (Rs 3 million).
A separate law for faster enforcement of high-value business contracts is on the anvil. The aim is to boost the business and investment climate in India, a country that many perceive is bedevilled by difficulties in doing business.
Decision on additional Rs 2 lakh debt at 7% rate shortly.
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