The Reserve Bank of India (RBI) may opt for a 25 per cent cut in the repo rate, to prop sagging demand in the interest rate-sensitive durables sector in the mid-term review of its 2007-08 monetary policy on October 30.The likely reduction in the repo rate would take place despite concerns about inflation, which suggest that interest rates can be left unchanged, banking sources said.
The Reserve Bank of India (RBI) has suggested stringent conditions for participatory notes (P-notes) that are issued even by registered foreign institutional investors (FIIs). In a note sent to the finance ministry on the eve of the Securities and Exchange Board of India's (Sebi's) board meeting to decide on restrictions for P-notes, the central bank has reiterated its earlier stance of a complete ban on P-notes.
The Securities and Exchange Board of India will increase overseas participation in the Indian stock markets and is planning two specific measures in this regard, Sebi Chairman M Damodaran told Business Standard in an exclusive interview.
In a meeting between the central bank and market participants last week, it was also decided that futures would be introduced both as an exchange-traded product and over the counter. The RBI will also be reviving interest rate futures that were introduced in 2003, but failed to take off due to the lack of a well-developed pricing curve in the market across maturiites.
Overseas markets are already hit by an acute dollar crunch, which is why major central banks, the US Federal Reserve, the European Central Bank and the Bank of England, had to infuse funds into the market. These lines of credit are over and above the stand-by credit, which is usually maintained by foreign banks with the Indian banks.
Tax compliance in India is improving steadily. Four years ago, 76 per cent of the 28.8 million tax-payers (assessees) filed annual income tax returns. Since then, the number of tax-payers has been increasing and so is the compliance level. In 2004-05, the compliance rose to 78.2 per cent on a tax-payer base of 29.21 million. In 2005-06, this rose to 82.1 per cent on a base of 29.63 million. In 2006-07, this has risen to a new high of 85.3 per cent on a base of 29.79 mn.
Among its suggestions to the finance ministry, RBI has also said the government should classify private equity under a separate category of foreign investment, or create sub-limits within foreign direct investment or investments by foreign institutional investors.
The finance ministry is of the view that all interests -- direct and indirect -- should be taken into account and that there should not be any threshold for calculating total effective foreign shareholding in a company.
ICICI Lombard has bagged a contract from the railways to provide personal accident cover at a premium of just 4.75 paise per passenger. The personal accident cover is for a year starting from September 20, 2007.
TDS collections stood at around Rs 37,500 crore (Rs 375 billion) during April-August, about 50 per cent of the gross direct tax collections of Rs 75,244 crore (Rs 752.44 billion).
Individuals may soon get to invest in overseas commodity and equity derivatives.
The move would retain the public sector character of these banks, as the holding company will be wholly owned by the government, finance ministry officials said. This company, in turn, will own a majority stake in the banks.
The Reserve Bank of India is in favour of a cautious and gradual approach to financial sector reforms rather than a big-bang approach, as advocated by the Percy Mistry Committee report on making Mumbai an international financial centre.
If the valuation norms are not announced by then, the due date for paying advance fringe benefit tax (FBT) on ESOPs is likely to be extended beyond September 15.
At a high-level coordinate committee meeting to be held by the month-end, the government and the Reserve Bank of India will take stock of the situation.
The central bank's objective is to align the regulations for such loans with the tenure and end-use norms for external commercial borrowings in a bid to check foreign currency inflows.
The guidelines on the valuation of employees' stock option plans (ESOPs) for calculating fringe benefit tax (FBT) will be issued by September 8.
A survey by market research firm IIMS Dataworks shows that Indian consumers rarely distinguish between banks in their decisions to opt for the one over the other. They go for the bank that comes their way, for one reason or the other.
Insurer divides country into three zones with varying premiums.
Bonds/papers of Tata Motors, Reliance, SBI, ICICI and others turn illiquid in international markets.
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