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Charges of money laundering
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Vijay Mallya, UB Holdings lose Rs 225-cr Kingfisher commission
Investor Guidance
Govt hikes import tariff value of gold
Buying gold amid price fluctuation? Think again!
Cabinet to consider Vodafone tax dispute next week
What are Options & Futures*
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Taxmen to file court cases against bankers, depositors
New Delhi, June 2 The department will prosecute individuals and banking authorities under section 276C of the Income Tax Act which deals with the offence of 'wilful attempt to evade tax' and the Central Board of Direct Taxes (CBDT) has issued directions to all its chief commissioners in the country to speed up investigation in their respective jurisdictions with regard to this expose. The department's action, according to sources, is based on a RBI report which was obtained in the case of three banks which had featured in the first edition of the online portal's expose. The RBI report explicitly mentions that in a number of cases neither PAN nor Form-60 was obtained by the banks and in another set of cases 'dummy' PAN card numbers were quoted for facilitation of huge cash and deposits. A Form-60 is a declaration that has to be filed by a person who does not have a Permanent Account Number (PAN). The department, after going through the RBI report, recently initiated the action of summoning the evidence from banks (under section 131 of the I-T Act) and various tax collection ranges of the department will then launch prosecution in the competent courts, the sources said. The department has recently issued notices, summoning for documents, to three private banks — Axis, ICICI and HDFC — in this regard and it is now in the process of initiating similar action against 23 other public and private sector banks and insurance companies which figured in the later editions of online news portal Cobrapost. The department has also begun action in those cases where Form-60 was quoted despite possessing a PAN, which is seen by investigators as an attempt to evade the tax scanner. The final case papers will be prepared and sent for prosecution after collecting data and evidence from the RBI reports, documents submitted by the banks and internal enquiry reports which were conducted by the individual banks, they said. Following the exposes by Cobrapost in March, the RBI had initiated an investigation into the working of banks. The investigation by RBI reportedly showed some bankers giving suggestions to customers on ways to bypass regulatory norms and the sting operation alleged violation of money laundering and tax laws in this process. — PTI Wilful evasion of taxes
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Emkor aims big in cloud computing, targets mid-sized companies
Emkor is among the few companies having focus in cloud offerings and has pioneered the concept of 'Business Function as a Service (BFaaS)'. With rich experience and success stories, Emkor Solutions has built capabilities of envisioning, emerging and future business trends and incorporating best solutions in business processes to bring a complete transformation in the way enterprises operate, maintain competitive advantage and sustainable profits. While talking to Girja Shankar Kaura, Vikram Dham, CEO and Co-Founder of Emkor Solutions Limited, talks about future plans of the firm.
With the fast paced adoption of cloud taking place, we have seen over 5,000 large enterprises and over 10 million SMBs ready to consume IT. In fact, the $30Bn+ domestic IT market is expected to grow between 15-18% in 2013 as per a Zinnov report. The cloud market is also maturing quickly with many new entrants and has registered a growth at 70 per cent in 2012. It has also been forecast by the IDC report on India Cloud Market Overview, 2011-2016 that there is going to be 50 per cent growth in this segment for the next three years. Q: The Business Function as a Service (BFaaS) being a new category, could you explain a bit on that front? Today, businesses around the globe focus more on their core competencies to remain competitive in the market. They look to leverage standardised business processes and best in class technology, reducing capital outlay in either resources or technology. To cater to these requirements the service 'Business Function as a Service' offers a subscriber pay as you go, on demand service delivery model that businesses can leverage to outsource their end-to-end critical but non-core business functions such as F&A, HR, payroll, taxation and IT. Working closely with clients across various verticals, Emkor Solutions leverages best practices and methodologies to re-engineer, design, plan, and implement innovative technology based solutions. The team at Emkor inspires change in customers' business environment and empowers them to be more innovative to increase their growth and to reduce costs. Q: How are the SMEs going to benefit from it? We are targeting the emerging and mid-sized companies which have an annual turnover of Rs 50 crore to Rs 1,500 crore. Emkor has introduced services to provide them with the best of breed technology through our disruptive cloud offering Business Function as a Service. As we look at the worldwide trend in cloud adoption, fast growing SMEs in developed and developing countries will be the first to move their business critical applications and business processes to the cloud. These SMEs are more open to significant transformational changes than their larger counterparts, as typically these critical non-core business functions are challenging to manage. This is due to rapid growth, and the challenges associated with the change management of technology, process and people. Our service offering promotes mobility of workforce, which can empower such businesses in attracting and retaining employees, increasing nimbleness in order to meet deadlines and reducing occupancy costs. Q: What percentage of the market is currently tapped? The SMEs make up 22 per cent of the IT market, and are one of the fastest growing segments in the country. Although, the SMEs provide employment to about 75 per cent of workforce, these enterprises make up for only 30 per cent of the country's IT spending. Today, around 12 per cent of Indian SMEs use computers and 90 per cent of them use it just for document processing. A major change in this attitude will help the the SMEs to a huge extent in competing globally. Q: Tell us about your future plans. The idea is to ensure that we achieve 70,000 end users and touch 1,400 companies in the next five years. With continuous improvement and reinvention of our services, we want to achieve a model where a multi-tenant application literally supports hundreds of thousands of simultaneous customers who all receive the benefit of a lower cost, shared infrastructure and related services. As we develop better and newer services to support business critical information, data generation, management and retention, we also aim to soon bring a time when SMBs who've adopted cloud to meet their IT demands, will never know what it is like to rely on any form of an internal IT department.
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Vijay Mallya, UB Holdings lose Rs 225-cr Kingfisher commission
New Delhi, June 2 These commissions pertain to the aggregate payments for a period from January 1, 2011 to March 31, 2013 and include an amount of little over Rs 100 crore for the last fiscal 2012-13, the grounded airline has said. The disclosure has been made by the grounded airline itself as part of the 'notes to the accounts' of the company's fourth quarter financial results for the period ended March 31, 2013. “The consortium bankers pursuant to the RBI's guidelines directed the company (Kingfisher) not to make payment of commission and reverse all entries relating to commission to the guarantors for issuing guarantees at the request of the company to its bankers with effect from January 1, 2011,” Kingfisher said. “The company communicated the matter to the guarantors concerned, United Breweries Holdings Ltd (UBHL) and Vijay Mallya respectively, who have together with Kingfisher Finvest India Ltd filed a suit in the Bombay High Court, against the consortium of bankers...” it added. The relief sought by the company from the courts includes declaring as void the corporate guarantees given by UBHL and the personal guarantee of Mallya. Besides, they have also claimed damages worth about Rs 3,200 crore. "The suit is pending in the Bombay High Court. In view of the aforesaid facts, no provision for the period from January 1, 2011 to March 31, 2013 to the extent indicated earlier has been made in the books of account of the company for commission in respect of the guarantees, which are sought to be declared void ab-initio and non-est in the suit. “The commission for the period from January 1, 2011 to March 31, 2013 would have aggregated to Rs 224.83 crore,” Kingfisher has said, while pegging the commission for the quarter ended March 31, 2013 at Rs 24.8 crore and for the year ended March 31, 2013 at Rs 1,000.7 crore. Earlier in the financial year 2010-11, Kingfisher had paid its chairman and key promoter, Vijay Mallya, little over Rs 50 crore as commission for providing guarantees worth more than Rs 6,100 crore for the airline's loans and other liabilities during the fiscal.
— PTI 3 senior Kingfisher Airline executives quit Three more senior executives of Kingfisher Airlines, including its chief information officer, have quit the grounded carrier even as a section of its pilots are set to revive their agitation over non-payment of salaries. “The airlines' chief information officer Saurav Sinha, flight operations head Capt Ronald Nagar and cabin crew head Ajit Bagchi have put in their papers recently," Kingfisher Airlines sources said. “Our July 2012 salary was paid in March and since then we have not received any payment. The management is keeping quiet on when it will pay our dues. We have called an internal meeting on Monday to chart out our course of action,” an airline pilot said. — PTI
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Deposit Rs 500 yearly to keep PPF a/c active
by AN Shanbhag Q: How and where can I start a Public Provident Fund (PPF) account? What is the procedure to start the account? Explain about lock-in period and how to close the account? — Chittal You can start a PPF account either with a post office or with any nationalised bank such as SBI, BOB etc. Normal account opening formalities are needed in terms of photograph, PAN photocopy, address proof etc. The minimum contribution is Rs 500 per year and the maximum Rs 100,000 (increased from Rs 70,000). The lock-in period is of six years. After that you can withdraw 50% of the balance to your credit four years back. One can nominate anyone to receive the proceeds in the event of the account holder passing away. This should be done at the time of opening the account. The account cannot be closed prematurely per se. It is a 15-year scheme and one needs to contribute the minimum Rs 500 per year to keep the account active. Q: I am working in a PSU and having a house loan liability of Rs 10 lakh from my company and another Rs 5 Lakh from LICHFL. Also Rs 85,000 liability from a cooperative society. (Total EMI of Rs 18,000 per month) Should I liquidate the above as and when any extra amount is received such as LIC maturity or an annual bonus from the company or should I keep the extra amount as I don't have any emergency fund with me? — Sam Abraham It is not clear from your query whether the interest rate on the housing loan is fixed or variable. In case it is not fixed, there is a risk that you are taking of the rate being raised in the future. Even if it is fixed, we would advocate retiring part of the debt and investing the balance of the extra funds whenever you get the same. The proportion would be say 60 -65% of the funds to be used to retire debt and the balance to be invested.
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Deadline for banks to allot unique ID to customers extended
New Delhi, June 2 Banks, however, will have to allot the Unique Customer Identification Code (UCIC) to all customers while entering into new relationships. The RBI said some banks had expressed difficulties in implementing the UCIC due to various reasons, and have sought more time to allot the UCIC to their existing account holders. “Keeping in view the constraints, the time for completing the process of allotting UCIC to existing customers is extended up to March 31, 2014. We, however, reiterate that the UCIC should be allotted to all customers while entering into new relationships,” the RBI said in a notification. The RBI had last asked banks to allot the UCIC to all their customers while entering into any new relationships.
— PTI |
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Govt hikes import tariff value of gold
New Delhi, June 2 Tariff value is the base price on which the customs duty is determined to prevent under-invoicing. Last month, the tariff value of gold was at $440 per 10 grams. The notification in this regard has been issued by the Central Board of Excise and Customs. The government has raised the import tariff value of gold as global prices have steadily been going up. On May 31, gold prices in Singapore rose to a two-week high of $1,421 per ounce but the metal prices fell later to close at $1,388.30. Gold in the national capital is costing around Rs 27,700 per 10 grams.
— PTI |
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With intense competition prevailing in the housing finance market, lenders are improving and innovating their offers to ensure tailor-made products and service differentiators The housing finance market in India has evolved over the years from a conformist market to a progressive credit proposition. The belief that self-occupied residences should be free from lien and mortgage has now made way for a more forward looking approach. The growth in the housing industry in India has mainly been fueled by rising income levels, availability of ample credit by financing institutions over the last decade. With the increase in credit awareness and the influx of the Gen “Y” with dual income households thereby carrying an aggressive risk appetite, home loan companies have been on their toes trying to live up to customer expectations and create and maintain an edge over their competitors. While the market has been price sensitive, the customers have often chosen flexibility and customsability over an offering with merely a rate differential. A home loan being a long tenure obligation, backed by an appreciating set of assets and the customer’s never ending urge for more to stay in, the market has seen home loan products being brought in highly flexible and customisable packages. With intense competition prevailing in the market, and the barriers to switching being made fairly easy, more and more home loan providers are improving and innovating their offers to ensure tailor-made products and service differentiators. Some ways in which home loans can be customised, and the benefits accruing to customers are as follows Tenor restructuring
Tenor restructuring is alignment of the repayment tenure and/or the equated monthly instalment (EMI) in the course of loan servicing depending on individual circumstances and obligations at that juncture. It is one of the popular tools of home loan customization and can happen for two reasons –
Leverage value appreciation through a Top-Up Loan
The last decade has seen an exponential rise in the real estate valuations owing to a demand-supply gap in the middle and lower income groups. The home loan over a period of time serves as one of the cost effective tools for fund raising so as to meet requirements like personal exigencies, higher education and home improvement, acquisition of another asset or working capital in the case of self-employed individuals through top-up loans on the existing asset without any additional security. Home loan balance transfer
facility to ride the declining interest rate scenario
The current trend of applications for home loans has shown a considerable share of balance transfer applications from other lenders. This trend is attributed to the sizeable asset value appreciation and the interest rate gaps caused by rate fluctuations over the period of the loan tenure. Such options also serve as an effective debt consolidation tool. The abolishment of the pre-closure charge on prepayment of home loans has catalysed this cause. Thus, it is now possible for home loan customers to adjust their loan, and their debt burden, depending upon their age, lifestyle and capacity. This phenomenon will only benefit both the housing industry and home loan industry in the long run. In the times to come, customisation and innovation in affordable and rural housing will be a space to watch out for. All this flexibility and customisation is offered to facilitate the customer to avail and service his loan obligations satisfactorily. However being a long-term credit facility, the aspirant should be realistic about his cash flow projections, future family liabilities and other aspirations. And in the interest of the family that resides within the dwelling, home loan exposures should be aptly backed with a credit insurance facility. The author is Managing
Director, Tata Capital Housing Finance. The views expressed in this article are his own |
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Buying gold amid price fluctuation? Think again!
Gold is the only asset class, which is bought in both scenarios - fall and rise in prices. When the prices go up significantly, people rush to buy gold in anticipation of further price rise, which also happens in case of equity. However, the behaviour is just the opposite when the gold prices come down. People rush to buy it as is evident from the media reports on recent rush on buying gold jewellery, though this is not the case when equity market goes down. The recent correction has forced people to rethink - whether to buy gold now or defer the purchase till further correction. So what should you do now? The answer to this is linked to the purpose of purchase like if it is for the marriage of your daughter or son or just for investment. If the purpose is marriage of your child, which is just a few months away, you should take benefit of the recent fall in prices and buy the required quantity of gold immediately as it is difficult for you to predict the prices in the next six months. The prices may come down or may go up as well. Hence, it is not advisable to take risk. Avail benefits of the recent correction. However in case the marriage of your child is a few years away, say five years hence, you should not rush to buy gold, but stagger the purchase over the accumulation period so that you are able to average out your purchases. This way, you will not carry the risk of sudden rise or correction in gold prices. Should you buy gold for investment purpose in the current scenario? You can’t anticipate the future but you can take a leaf from the past. As goes the saying, history repeats itself so why should the historical prices of gold not be relevant for arriving at the future prices? What comparative study suggests? Let’s explore history of gold prices internationally. We have undertaken a comparative study on the returns provided by sensex and international prices of gold (domestic and international) over the past 30 years (a fairly long term) to judge the stability and trend of returns. We have calculated 10 years moving average of both these asset classes namely, equity and gold. What are the results? The maximum returns provided during any 10 years periods by equity is 34.69 per cent and that was during 1982 to 1992. Likewise, the maximum returns provided by gold are 17.36 per cent during 2001-2011. So as far as the maximum returns generated during any 10 years period is concerned, equity has given double of the returns as provided by gold in any 10 years period. Likewise, the minimum returns provided by equity is negative (–2.09 per cent) during 1992-2002. However, gold has never given a negative period during any period of 10 years. The minimum return provided by the yellow metal during these pairs of 10 years was 1.46 per cent during 1992-2002. We also observed that during 23 pairs of 10 years, gold has provided returns in double digit only seven times. However, equity as surrogated by sensex has given double-digit returns 19 times out of 23 pairs of 10 years moving averages. An interesting fact from the data of international gold prices of 200 years reveals that international gold prices have given an average annual return of 2.19 per cent during the same period – just been able to beat the inflation. Based on the above we can draw some conclusions. For the purpose of wealth creation - gold is certainly not the asset class where you should invest majorly however, it is recommended for portfolio diversification purpose as it will be able to take care of your gold needs for your social obligations. The author is CFO, Apna Paisa. The views expressed in this article are his own |
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The housing finance market in India has evolved over the years from a conformist market to a progressive credit proposition. The belief that self-occupied residences should be free from lien and mortgage has now made way for a more forward looking approach. The growth in the housing industry in India has mainly been fueled by rising income levels, availability of ample credit by financing institutions over the last decade. With the increase in credit awareness and the influx of the Gen “Y” with dual income households thereby carrying an aggressive risk appetite, home loan companies have been on their toes trying to live up to customer expectations and create and maintain an edge over their competitors.
The department will prosecute individuals and banking authorities under section 276C of the Income Tax Act which deals with the offence of 'wilful attempt to evade tax'.
Q: How big is the market opportunity for Emkor? How many SMEs in India have the potential to use your platform? 
Historically, gold has provided hedge against inflation generally over the long period. We Indians buy gold on all conceivable occasion, which is evident from India’s share in global gold. Of the global trade of around 4,000 tonnes of gold, India contributes around 25 per cent.
