WEEKLY FINANCIAL SNIPPETS- 27/08/2016

1. MASALA BONDS IN FOREIGN MARKETS: Masala Bonds is a way for Indian Companies to raise funds from abroad without incurring the risk of depreciating exchange rates. They borrow not from a bank but by selling bonds to investors. These bonds are denominated in Indian rupees and are to be repaid in Indian rupees only. So there is no currency risk to the borrower. That risk isto be borne by the foreign investor. The Reserve Bank of India has formally approved of such bonds and HDFC was the first company to avail this facility last month. It sold Masala bonds at 8.37%, still cheaper than 9 or 10% which they might have paid in India. These bonds are free to trade in London stock exchange.

 2.LARGE FIRMS HAVE TO PAY MORE FOR BANK LOANS: RBI has proposed a major overhaul in the way large companies borrow from banks. Starting next financial year, large Indian companies will have to pay more for borrowing from banks, a part of an effort by the Central Bank to curb lenders’exposureto stressed corporate entities. The Central Bank is also taking steps to increase liquidity and participation in the corporate bond market.

3.PRADHAN MANTRI FASAL BIMA YOZANA: The Hon’ble Prime Minister of India has announced a brand new crop Insurance scheme on 13th January 2016 and this scheme is called Pradhan Mantri Fasal Bima Yozana( PMFBY). This will be implemented in every state. The main motto of this crop insurance is to provide efficient and low cost insurance support to the farmers which will give financial supportto thousands of farmers so that they can sustain even if the yield is damaged. Every Bank Branch in India has been now provided with a portal and details of farmers have to be made in that portal. RBI has directed Banks for strict compliance for implementation of this Fasal Bima Yozana.

4.TRANSFER FUNDS WITHOUT AN ACCOUNT NUMBER VIA UNIFIED PAYMENT SYSTEM( UPI): Reserve Bank of India has cleared the Unified Payment Interface ( UPI), a platform which links bank account numbers to virtual payment addresses. So you can now transfer funds to anyone without even knowing the recipient’s account number through a mobile banking app. The UPI enabled app in effect turns your smartphone into a bank. This has come as a boost to a cashless economy. This mode is even better than RTGS and NEFT as it allows access to more than one bank account, does not need 16 digit bank account, and 11 digit IFSC code. Presently up to Rs 1.00 lakh can be transferred and no charges on money transfer as of now.

5.RBI CURBS LARGE LOANS TO SINGLE BORROWER: The Reserve Bank of India on Thursday announced series of measures to prevent banks from giving large exposure to a few big corporates. The measures come after a handful of distressed borrowers wiped out profits of several banks due to large loans going bad. As a first step the RBI proposed to cap the exposure limit of banks to a single borrower group to 25% of the bank’s equity capital. At present the banks can go up to 55% of their Tier I capital in case of Infra loans. In case of individual entities, the limit has been raised from 15% to 20%. At the same time RBI has paved the way for the corporates to move towards bond market.

6.DOMESTIC SYSTEMATICALLY IMPORTANT BANKS (D-SIB): SBI and ICICI Bank have been given the status of Domestic systematically Important Banks ( D-SIBs) by Reserve Bank of India for a second consecutive year. As these banks are named as D-SIBs it imposes additional capital requirement. RBI follows the Systematic Importance Score (SISs) for selecting a bank .The selection is also based on the Bank’s size as a percentage of annual GDP.

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WEEKLY FINANCIAL SNIPPETS- 20/08/2016

1.CUSTOMERS ARE NOT LIABLE FOR E-FRAUDS, IF REPORTED IN TIME: The Reserve Bank of India has introduced a policy of “zero liability”for customers in third party frauds if reported within 3 days. This means banks will have   to make good the losses suffered by customers in E-frauds if reported in time. In cases where the customer reports the fraud between 4 and 7 days after coming to know about it, his liability will be capped at Rs.5,000/-.It is further notified that if the bank employee is responsible for the fraud, the customer must get his money back irrespective of whether it is reported well within time or not.

2.BANKS CAN CONFISCATE SECURITY IN CASE OF LOAN DEFAULT: The Enforcementof Security Interest and Recoveryof Debts Law and Miscellaneous Provisions (Amendment) Act 2016, has received a GO AHEAD from the President of India and it has been notified. The Act amends four laws—the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest( Sarfaesi) Act, 2002, The Recovery of Debts due to banks and FinancialInstitutions (RDDBIT) Act, 1993, The Indian Stamp Act, 1899 and the Depositories Act, 1996. This amendment simplifies the procedure to ensure quick disposal of pending cases of banks and financial institutions by the Debt Recovery Tribunal ( DRT). The new legislation is not applicable to agricultural loans as well as student loans.

3.INSURERS WILL HAVE TO DEAL WITH MORE TAXES IN GST REGIME: Insurance companies will potentially have to deal with more taxes once the GST is implemented with the emergence of the Centre and state as dual stakeholders, as per the report. The number of taxes will increase as the calculation of input-output tax credits will be done separately for each individual state in which they are earned.

4.INCOME DECLARATION SCHEME-2016 (IDS), INCOME TAX DEPARTMENT ALLAYS CAPITAL GAINS WORRIES: Under the present Income Declaration Scheme the potential declarants would require to sell their assets to meet IDS tax liability. Here the declarant has to pay   45% tax ( on the fresh market value  of the asset as on date)   while declaring undisclosed assets and an additional capital gains tax if the said property is  to be sold. The Central Board of Direct taxes has clarified that the period of holding the immovable property will be taken on the basis of the actual acquisition date of the property and not from June 2016, thereby capital gains tax burden will not be there. Also the Department further clarified that either the department or the Financial Intelligence Unit will not take any adverse action solely on the basisof cash deposits made in banks from the sale of proceeds for IDS declaration.

5.FIVE THINGS YOU SHOULD KNOW ABOUT CREDIT CARDS: If you miss a payment in a month, the interest amount is calculated from the date of purchase. 2. Do not think the “minimum due amount”is a good reason for delaying your payments as the company still charges you interest for the period. It however does not impact your credit score as you are not termed as a defaulter. 3. Trailing interest is something not understood by many. If you had not made full payment as per previous balance on your card, the interest is calculated from the day of your purchase. Grace period ceases to exist for fresh payments if the payment is not made on your card. 4. Interest is calculated on the full amount even after making a partial payment. 5. Know the date when your credit card bill is generated. By making a purchase on the date of the bill, you can increase the interest free period by almost two months.

6.SBI LAUNCHES NEW HOME LOAN SCHEM TO ATTARCT NEWGEN CUSTOMERS:To woo young customers, SBI has launched a new home loan scheme offering higher amount and up to 5 years of interest moratorium, which looks like a controversial teaser loan. This is SBI’s “FlexiPay Home Loan”, offering its customers an interest moratorium for an initial period of 3 to 5 years and then start paying EMIs. To lower the impact of higher EMI after 3 to 5 years as the interest gets added to the principal amount, the customer is also offered the option of paying only interest during the moratorium (pre-EMI) period of 3 to 5 years.

7.RBI CAUTIONS BANKS ON MIS-SELLING THIRD PARTY PRODUCTS: RBI Governor Mr. Raghuram Rajan said that as per the study undertaken by some academicians/consumer activists, it is found that Banks are mis-selling third party products, especially insurance products. The Reserve Bank of India has asked the Indian Banks Association (IBA) to come out with an appropriate industry practice in regard of sale of third party products.

WEEKLY FINANCIAL SNIPPETS – 13/08/2016

1. MCLR REVISION ON CARDS, SAYS RBI GOVERNOR Mr. RAJAN: Reserve bank of India(RBI) governor Mr. Raghuram Rajan said that the central Bank will soon revise the marginal cost of fund –based lending rate ( MCLR) mechanism. This MCLR concept was implemented from April 1 st 2016 , replacing base rate mechanism. Mr.Rajan says it is disappointing that banks had not passed on the benefits of lower interest rates to customers despite ample liquidity. Now banks are sighting the reasons of FCNR(B) redemptions as the reasons for not lowering the interest rates. But most banks have ruled out any immediate transmission of rates despite RBI chief Raghuram Rajan blaming them of not passing the benefits to the customer. They say that the rates will fall once the credit growth picks up.

2. ON TAP BANK LICENCING TO BENEFIT NBFCs: Reserve Bank of India’s decision to herald ‘’ on tap ‘’ universal banking licence regime will benefit non- banking finance companies(NBFC). This is as per the report of Moody’s Investor Service. However it cautioned that more bank licences will be ‘’ credit negative’’ for existing banks as it will increase competition.

3. RELAXATION OF NORMS IN CHEQUE DISHONOURCASES OF Rs 1 CRORE AND ABOVE: As per the existing norms, presently banks are not allowed to issue fresh cheque books in the event of cheque dishonour valuing Rs.1 crore and above on four occasions in a financial year for want of sufficient funds. Relaxing this existing norm, RBI now has left it to Bank’s discretion on whether to issue fresh cheque books or not. Each Bank can now take its own stance in this issue.

4. RBI LAUNCHES WEBSITE “ SACHET” TO TACKLE FRAUD: The Reserve Bank of India has launched a website “SACHET” from which anyone can obtain information regarding entities that are allowed to accept deposits, lodge complaints and share information regarding illegal acceptance of deposits by unscrupulous entities. This will help in curbing unscrupulous money raising activities.

5. RECENT ISSUE OF MASALA BONDS PAVES WAY FOR OPENING UP OF MARKETS: The recent issuance of the first off shore masala bonds ( rupee- denominated bonds in overseas market) by Indian companies could pave the way for a broader opening and development of the market, according to Fitch ratings. This will help in taking advantage of offshore markets to diversify their funding resources without assuming currency risk.

6. 25 YEARS OF REFORM PERIOD: Twenty five years have been completed since economic reforms were set in motion by the then Narasimha Rao government. These far reaching reforms have transformed the economy in a positive way and set it on a growth path. The stock Market which is the barometer of the economy has also gone a sea change during this quarter.

GOODS AND SERVICES TAX(GST) in Nutshell

Goods and Services Tax (GST) is an indirect tax that brings most of the taxes imposed on goods, services, manufacture, sales and consumption of goods under its ambit in to a single domain at the national level.  It will change the taxation pattern that is levied separately on goods and services and will introduce a consolidated tax, based on a uniform rate of tax fixed by the government  for both goods and services and it is payable at the final point of consumption.

GST has two components, CGST (Central Goods & Service Tax) and SGST(State Goods & Service Tax). Both Centre and State will simultaneously levy tax across the value chain. Under GST since the taxes will be integrated hence it will bring transparency as the burden will be shared between manufacturing and services. It will promote growth, create more employment opportunities and boost the economy as a whole.No tax reform has generated such enormous interest among business and general public as GST. It has in some ways has become a barometer for government’s success. And for the first time the Centre and State have come together on a common platform for GST implementation.

GST makes India a common unified market. There will be just one tax on the supply of goods and services right from sourcing to customer. The new tax regime may be effective from April 01st 2017. Some companies will gain as the GST rate will be lower than the tax now it is paying and some companies will lose as the GST will be more than the tax now they are paying.

BENEFITS OF GST TO BUSINESS & INDUSTRY: 1. Easy Compliance. 2. Common tax rates.3. Removal of cascading effect of taxes. 4. Improved competitiveness.

BENEFITS OF GST FOR THE GOVERNMENT: 1. Easy to administer. 2. Better control of tax leakage. 3. Higher revenue.

BENEFITS OF GST TO THE CUSTOMER: 1. Single and transparent tax. 2. Relief from overall tax burden.

THE BIGGEST BENEFIT WILL BE THAT THE MULTIPLE TAXES LIKE OCTROI, CENTRAL SALES TAX, STATE SALES TAX, ENTRY TAX, TURNOVER TAX ETC WILL NOT BE THERE AND ALL THAT WILL BE BROUGHT UNDER GST. DOING BUSINESS WILL BE MORE EASIER AND COMFORTABLE AS VARIOUS HIDDEN TAXATION WILL NOT BE THERE.

 SOME OF THE SECTORS WHICH WILL BE BENEFITED BY GST: Textiles, Auto and Auto dealers, Engineering & capital goods, Power equipment industry, Pharmaceuticals FMCG, Cement.

SOME OF THE SECTORS WHICH WILL HAVE NEGATIVE IMPACT BY GST: IT Sector, Airlines, Mutual Funds, Real estate.

CONCLUSION:The present taxation of goods and services in India is misallocation of resources resulting in to lower productivity and thus lower economic growth. But with the implementation of GST the problems will be effectively addressed as the tax burden is equally distributed from Production/Trade to final consumption. Under GST all different stages of production/distribution and consumption will be covered and taxed.

WEEKLY FINANCIAL SNIPPETS – 06/08/2016

1. RBI RELEASES GUIDELINES FOR “ON TAP”LICENSING OF PRIVATE SECTOR BANKS: Reserve Bank of India has released guidelines for licensing of universal private sector Banks. Underthis, applicants can apply for a banking license anytime. Indian residents with a 10 years senior level experience are eligible topromote a bank but large industry houses have been excluded as eligible entities, although they can invest up to 10%.

2. DHFL BECOMES THE 1stINSTITUTION TO FLOAT BONDS LINKED TO INFLATION: Dewan Housing Finance Ltd is the 1St to raise funds which are inflation linked. It was decided to raise Rs.4,000crores through a retail bonds sale, which for the first time will also offer interest rates linked to consumer price-based inflation. Here investors can earn interest income in the range of 8.90 – 9.50% irrespective of any wild swings in CPI (consumer price index). This issue has already got record Rs.19,000crore subscription.

3. YOU TURN A YEAR OLDER A DAY BEFORE YOUR BIRTHDAY- AS PER CBDT: Central Board of Direct taxes (CBDT) has decided that, for tax purpose, a person will be deemed to have attained a certain age on the day preceding his birthday, rather than on the birthday itself. This will benefit mostly the senior citizen, turning 60 or 80 years of age on April 1St, since these two ages bring with them income tax enhanced limit exemptions.

4. RETAIL INVESTORS CAN ACCESS G-SEC MARKET FROM AUGUST 2016: As per Reserve Bank of India latest guidelines, Retail investors can now access Government securities (G-sec) market. Presently it is being used only by large institutional players.

5. ALL STARTUPS ARE NOW ELIGIBLE FOR EXEMPTION FROM ANY PRIOR EXPERIENCE IN PUBLIC PROCUREMENT: All startups have now been made eligible to get exemption from the prior experience criteria in public procurement, a benefit that was till now enjoyed only by micro and small enterprises. Now as per the new criteria all startups are eligible to participate in public tendering process.

6. RAJYA SABHA PASSES THE MUCH AWAITED GST BILL: After a long wait India finally gets the tax regime that is globally competitive and  economically gainful. The much awaited GST (Goods and Service Tax) bill was passed by Rajya Sabha on 3rd The rate and scope of GST, a single tax which replaces the multiple indirect taxes, are yet to be defined. LokSabha has already passed the GST bill last year. Now it will need the President’s assent and approval of 15 Indian states, half of India’s 29.

7. SBI LAUNCHES NEW INNOVATIVE HOUSING LOAN SCHEMES FOR GOVERNMENT EMPLOYEES: State Bank of India has launched cheaper home loans to attract the beneficiaries of 7th pay commission hike, for the Government and Defence personnel. The Bank will offer new Housing loan products—SBI Privilege Home Loan for government employees and SBI Shaurya Home loans for Defence personnel without any processing fees.

WEEKLY FINANCIAL SNIPPETS – 23/07/2016

1. FREE CIBIL REPORTS ONCE A YEAR FOR ALL: Reserve Bank of India has said that Credit Information Bureau of India ( CIBIL) will soon provide one free credit report to those applying, free of cost once a year. Currently the said report, used by financial institutions to approve loans to individuals costs Rs 500/- per report to individuals. The new provision will come in to effect soon where in each individual desiring to check his/her credit score can do so once in every year.

2. GOVERNEMNT PLANS TO EASE THE PROBLEMS RELATED TO TDS: A lot of tax payers every year complain that often their tax is deducted by their vendors/employers but not transferred to government account, resulting in lot of harassment to the public. To address this issue the Finance Secretary has instructed Officials of Central Board of direct taxes(CBDT) to find a solution for this at the earliest. Some of the problems may be sorted out by upgrading the relevant software.

3. ICICI PRUDENTIAL FILES FOR FIRST IPO BY AN INDIAN INSURANCE COMPANY: ICICI Prudential Insurance Company plans to raise an estimated Rs.4500-5000 crore through IPO. This is the largest Public Offering since 2010.The IPO is exclusively the sale by ICICI Bank,which will offload 18.3 crore shares or 10% in the ICICI Prudential. The pricing would be between Rs 248- 276.

4. SBI- BROOKFIELD TIEUP FOR STRESSED ASSET FUND: State Bank of India has tied up with Brookfield Asset Management to set up a stressed asset fund. An MOU has been signed to this affect, wherein Brookfield will invest Rs 7000/- crores and SBI will invest 5% of total investment. The JV will evaluate and invest in various stressed assets and this will enable banks in general and SBI in particular, to find alternative solution for resolution of stressed assets. Such an approach will be more acceptable to both lenders and borrowers as well.

5. PUBLIC SECTOR BANKS GET Rs 22915 CRORE CAPITAL INFUSION: In line with the announcements made in the union Budget, the government has released over 22000 crores for recapitalization of public sector banks. 13 PSU banks have been benefitted from this, highest being SBI.

6. COMPANIES ACT TO BE AMMENDED FOR GIFT IFSC VENTURES: The government will soon amend the Companies Act to relax provisions for Gujarat Gift City’s international finance centre. The amendments will relax certain company norms. Companies operating in Gift IFSC set up by Indians will not be considered as foreign companies and will be provided with several operational freedoms. These companies will have flexibility in formation of their boards and on independent directors.

7. ROTATION OF AUDITORS BY INDIAN COMPANIES: As per the New Companies Act , every Indian company having a paid-up capital of Rs 20 crores or more needs to change its auditors once in 10 years if it has kept the same auditor for 10 years in a row. As per the recent survey only 18% of the companies are ready for the said rotation.

WEEKLY FINANCIAL SNIPPETS- 16/07/2016

1. GROSS NPA LEVEL OF BANKS TO INCREASE, AS PER ICRA: Domestic rating agency ICRA has said that with banks recognizing large NPAs following RBI’s asset quality review, gross NPA level of Indian banks is set to increase. As most banks are yet to fully recognize NPAs, it is likely that NPA addition will remain high in Q4 of FY 16 as well. The report says that around 15-16% of total bank credit is under stress, involving NPAs, restructured advances or other exposures to entities which are facing credit issues.

2. SIT ON BLACK MONEY ISSUE , RECOMMENDS BAN ON CASH TRANSACTIONS ABOVE Rs 3 LAKH: The Special Investigation Team ( SIT) on Black Money has recommended a total ban on cash transactions above Rs 3.00 lakh and a separate law to declare such transactions as illegal and punishable. SIT has also suggested an upper limit of Rs 15.00 lakh on cash holding.

3. NPCI TO AUDIT FINANCIAL INCLUSION TECH PLATFORMS: National Payments Corporation of India( NPCI) will audit the financial Inclusion technology platform of all banks after it was found that 80% of interbank transactions failed for accounts opened under government’s Jan Dhan Scheme. During a review it was found that the Financial Inclusion switch of some banks was not working leading to such transaction failures. The government has asked NPCI to look into the issue as it looks to push various social sector schemes through the Jan Dhan.

4. BANKS’ STATE GOVT DEBT PILE AT STAKE : The Reserve Bank of India is bracing for the major changes on the proposed global regulatory framework as per Basel norms.It would hit the Indian Banks with higher capital charges for the already piled up government debt in their books. Tighter rules in this front will bite Indian Banks, already struggling with surging bad loan scenario and provisions thereon. With nearly 30% of their total advances in state debt, these Indian banks will take a hit if the Basel Committee on banking supervision raises capital requirements on sovereign Bonds.

5. RBI ASKS BANKS TO EXCHANGE UPTO 20 SOILED NOTES FREE OF CHARGE: Reserve Bank of India has instructed Indian Banks to exchange up to 20 pieces of soiled currency notes per day free of charge with a maximum value of Rs 5000/- across the counter. If the number of currency notes exceeds 20 then the bank may charge appropriate service charges. This is an effort to improve customer service.

HDFC RAISES Rs 3000/- CRORE IN 1St EVER “MASALA BONDS” ISSUE: HDFC has raised Rs 3000/- crores in its first ever “Masala Bond” issue. This Rupee–denominated bonds got over- subscribed by 4.3 times. These Masala Bonds are Indian currency bonds and bear a fixed semi-annual coupon rate of 7.875% per annum and has tenure of 3 years and 1 month.

6. FINANCE MINISTRY TO SOON CLEAR 1st INSTALLMENT OF CAPITAL INFUSION IN PUBLIC SECTOR BANKS: The Finance Ministry is likely to clear its 1st instalment of capital infusion in public sector banks. The government has made Budget provision of Rs.25,000/- crores capital infusion in PSBs for the current fiscal. Each bank has made a detailed request for fresh fund infusion taking into account issues pertaining to NPAs and growth projections. However the Finance Ministry has said the 1st instalment would be less than Rs.20,000/- crores.

WEEKLY FINANCIAL SNIPPETS – 09/07/2016

1. “FITCH”DOWNGRADES INDIAN BANKING OUTLOOK TO NEGATIVE: Rating agency “FITCH”has downgraded its outlook on Indian Banking Sector to “Negative”, from “Stable”, due to more downside risks arising out of stressed loans and weak corporate earnings which may further rock Indian Banks. The agency has affirmed long term ratings of nine (9) large Indian Banks including SBI to “BBB-“. According to the agency the asset quality will further deteriorate unless they are counterbalanced by sizable capital infusions.

2. RBI MAY SOON ALLOW INTEROPERTABILITY OF INDIA POST’S PAYMENT BANK ATMs: India Posts which had last year won a licence to start and operate a payment bank, has not been able to make much headway on starting the operations. But of late, India Posts, world’s largest mail delivery network, is carving out a separate vertical to manage its banking services. And soon it may get the nod from RBI forinteroperability of its ATMs with those of PSU banks.

3. RESERVE BANK OF INDIA ALLOWS BANKS TO ASSIGN HIGHER VALUE TO HIDDEN ASSETS IN BALANCE SHEET: RBI has revised norms allowing lenders to assign higher values to “Hidden Assets” in their respective balance sheets. The“Hidden Assets” include undervalued real estate, taxes paid but not reckoned and foreign  currency reserves.  Until now Banks could re-value real estate assets  and recognize half of the gains as reserves but these reserved were considered part of Tier II capital  and this did not help as the main shortfall is in Tier I capital, which until now could be improved through equity infusion or ploughing back profits.  Now banks can recognize 45% of the valuation gains of hidden assets in Tier I capital even as they continue to use the premises. This new norm will reduce Rs 35000/- crores worth of capital requirement burden for public sector banks.

4. NEW DIVIDEND TAX MAY NOT HIT PROMOTERS MUCH: The additional 10% tax on dividend income announced in the recent Budget would not affect many wealthy promoter groups. The additional 10% tax on dividend income is applicable for the equity shares held in individual capacity, through HUF and partnership firms. Trusts and holding companies would not attract the proposed additional tax on dividend. Since most of the holdings in blue chip companies are held by the promoters through their trusts and holding companies, the dividend thus received by the said trust and holding company would still remain tax free.

5. BANK OF BARODA PLANS RATING BASED RETAIL LENDING: Bank of Baroda will be the first Bank in India to offer rating based lending to its retail mortgage loan seekers. This means the Bank will offer loan to retails customers based on their credit scores and not as a uniform rate irrespective of the credit rate till now.

6. GOVERNMENT OF INDIA MAY CHANGE THE EXISTING FINANCIAL YEAR : The government has set up a committee to deliberate whether india needs a new financial year and the implications of such a shift. India currently follows April-March as the financial year.

WEEKLY FINANCIAL SNIPPETS = 02/07/2016

1. NBFCs PERFORM MUCH BETTER THAN BANKS: As per RBIs latest Financial Stability Report (FSR) NBFCs (Non-Banking finance Corporation)financial performance is unchanged for the last two years. Net profit as percentage to total income remained at 15.3%and return on assets (ROA) stood at 22% between March 2015 to March 2016. Loans and advances during the fiscal increased by 16.6% while total borrowings of NBFC’s went up by 15%. Bank credit on the other hand grew at only 10%.The NBFC sector is growing at the cost of Banks, which is saddled by bad loans and poor profits.

2. HIGHER TDS SCRAPPED FOR NON RESIDENT INVESTORS:Non-residentinvestors without PAN details are currently subjected to higher rate of TDS (20%). It is proposed to amend the relevant provision to provide that on furnishing of alternative documents like the residential address proof, tax residency certificate from the government of their home country, tax identification number or any unique identification number provided by their country of residence, tax will be deducted at normal rate.

3. BANKS BAD LOANS MAY RISE TO 8.5% OF ASSETS: As per RBI latest report Gross non-performing assets (Gross NPAs) of public sector banks may rise to 8.5% of the total assets by March 2017, from the present level of 7.6% in March 2016. This is  as per the latest “Stress Tests” conducted by Reserve Bank of India.

4. MERGING PSBs HAS MORE RISKS THAN BENEFITS: As per global rating agency- Moodys’, the government’s plan to consolidate Public Sector Banks ( PSBs) has more risks than benefits. This is because banks have weak financial metrics to execute mergers and also could face lot of opposition from employee unions demanding parity in pension. The Indian government aims to consolidate the number of public sector banks from the present 27 to around 10 strong banks.

5. MOBILE BASED STARTUPS TO GET OVER $ 8 BILLION FUNDING IN NEXT 5 YEARS: With mobile phones contributing 40% of all E-commerce sales in India, startups in M-commerce, video gaming, streaming, and m-payments segment will get majority of funding in the next five years as well. This is as per the latest Annual Indian Mobile Ecosystem Report.

6. ALIBABA RAKUTEN EYES INDIAN E-COMMERCE BUSINESS: The AlibabaRakuten Japan, the biggest E-commerce player in Japan which earns over 40% of its revenue in Japan may soon start its e-commerce operations in India in less than two months from now. It will probably work with two business models—the conventional B2C e-commerce and cash back set up in India.

7. TAXMEN TOLD TO STEP UP EFFORTS FOR BLACK MONEY WINDOW SUCCESS: The Income Tax Department has asked its officers to make “all out efforts” to attract potential declarants under domestic black money window by assuring them of confidential and hassle free disclosures.

WEEKLY FINANCIAL SNIPPETS – 25/06/2016

1. SOME OF INDIAN STARTUPS SHAKEN BY NIKESH ARORA’S RESIGNATION: Some of the Indian startups like OLA, HOUSING, SNAPDEALetc are taken aback by the resignation of Mr.NikeshArora from the post of President-Indian Operations in Soft Bank. After taking over as President-Indian Operations of Soft Bank since 2014, NikeshArora managed to get substantial funding to the Indian Startups. Since then many a startups have got financial assistance to the tune of around   $ 1.00 Billion ( App Rs 6700 Crores). Soft Bank paid around 1500 Crores to Mr.NikeshArora as salary in these two years. Moreover all these Indian Startups are yet to make a breakeven in their respective business with accumulated losses.

2. HDFC BANK LAUNCHES SME e-bank: The country’s second largest private sector Bank has launched a digital banking for its small and medium enterprises ( SME) customers. SME customers can do away with the hassle ofphysical availability and  personal contacts with the relationship Manager and makes the process faster. According to the Bank it will save costs and man power. It hopes to make service to take off the said e- banking facility in tier -2 cities in a much better way.

3. GOVERNMENT “frees” STARTUPS IN INDIAOF “ANGEL TAX”: The Government Of India has removed the ANGEL TAX on Startups. Till now any new firm had to pay a tax if investments made by an Indian resident exceed the fair value of the firm’sshares. The Central Board of Direst Taxes ( CBDT) via its fresh notification has made thenecessary changes where by Angel Tax will not be levied in future.

4. NON PERFORMING ASSETS( NPAs) IS THE MAIN REASON FOR LOW CREDIT GROWTH: Reserve bank GovernorMr.RaghuramRajan has blamed the slow growth of credit in public sector banks due to the stress of NPAs. According to Mr.Rajan the slowdown in credit growth in public sector banks has been largely due to the NPA stress in these banks and not due to high interest rates.

5. GOVERNMENT IS PLANNING FOR THE LARGEST E-MARKETPLACE : The Finance Ministry has given clearance for creation of “Government e-Marketplace”for online purchase of goods and services to various government ministries and departments. The Government’s central purchase arm has conceptualised an online portal called GeMor Governement e-marketplace. It will allow Govt Officials to make routine office purchases like cutlery, office equipment, etc. It is estimated that the purchases through the portal could touch a whopping 1.4 to 1.8 lakh crores, much higher than the rough figure of 80000/- crores sales that of Flipkart is targeting for June 2016.

6. UNITED KINGDOM VOTES TO LEAVE EU INA HISTORIC REFERANDUM: UK has voted to leave the European Union in a historic referendum (with a majority margin of 52% to 48%). As a result the Pound plummeted to a 31 year low as market responded to the news. The Indian stock market responding to the news, the Sensex slumped around 650 points and Rupee plunged over 1.4% to 68.21 per dollar mark. British Prime Minister Mr.David Cameron resigns over the BREXIT issue.