WEEKLY FINANCIAL SNIPPETS- 31/03/2018

  1. BUSINESSES WITH “NIL” TAX LIABILITY MAY GET TO FILE GST RETURNS BI-ANNUALLY: Business entities having zero tax liability for 6 consecutive months under GST may get relief of filing “NIL” GST returns twice a year. The said proposal is being sanctioned by GST council and the same will be implemented soon. According to a recent data, nearly 40% of GST return files have “NIL” tax liability and henceforth these entities need not file monthly tax returns.

 

  1. GUARANTEES OFFERED BY BANKS OUTSIDE INDIA TOUCH 1.95 LAKH CRORE: The Non-Fund exposure (Guarantees, LOUs, and Foreign Exchange Contracts) of banks which fall under the category of Contingent liability has drawn ample attention after the Nirav Modi LOU Scam in PNB. As per the RBI data, out of the total contingent liabilities, Guarantees outside India by all scheduled commercial banks have grown at an annual growth rate of 21% since 2004-05. The total guarantees outside India stood at 1.95 lakh crore in 2016-17.

 

  1. IBC PANEL EASES INSOLVENCY RULES FOR MSMEs: The Insolvency & Bankruptcy Code (IBC) review panel has called for sweeping changes in the law aimed at easing insolvency rules for Micro Small and Medium Enterprises (MSMEs). The committee has proposed that the promoters of MSMEs who are not termed as wilful defaulters should be allowed to bid for the assets of their companies during insolvency process.

 

  1. WORRIED BY IDBI BANK’S POOR HEALTH, RBI WRITES TO FINANCE MINISTRY: The Reserve Bank of India has written to the Finance Ministry expressing concerns over the poor financial position of IDBI Bank and has called on the government to take remedial steps. The letter points out several shortcomings, including the recognition of non-performing assets. RBI says that it has found out during their inspection that the bank’s mechanism for identifying bad loans is also deficient. And having said that, RBI also adds that the Bank’s Non-performing assets could be higher than what has been reported so far.

 

  1. PNB APPROVES PAYMENT TO 7 BANKS OVER FRAUDULENT LOUs: Punjab National bank has announced that it will make payments of around Rs. 6,500 crore to 7 banks against the Letter of Undertaking (LOUs), and Foreign Letters of Credit (FLCs) it issued in the fraud allegedly committed by jewellers Nirav Modi and Mehul Choksi and their companies. Around 350 such LOUs and FLCs are maturing on 31ST March 2018.

 

  1. ARUNDHATI BHATTACHARYA AMONG THE NAMES WHO COULD LEAD BBB: The government has initiated the process of selecting the next Chairman for the Banks Board Bureau (BBB). State Bank of India’s former Chairperson Mrs. Arundhati Bhattacharya, is considered to be one of the frontrunners for the post. But the government officials said they are open to get someone from the private sector also to head the advisory body. The government is not inclined to expand the role of the BBB and is of the opinion that the advisory body should continue to make holistic recommendations.

 

  1. IDBI BANK DISCLOSES Rs. 770 CRORE FRAUD: IDBI Bank has said that it has identified fraudulent loans of Rs.770 crore disbursed from 5 of its branches in Andhra Pradesh and Telangana. The loans were sanctioned and disbursed during fiscal years 2009-2013 for fish farming businesses. These loans were obtained against non-existent fish ponds and by inflating the value of collaterals. It has found major lapses in processing and disbursing the loans by two of its officials. The case has been handed over to CBI.
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