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SBI awaits nod to buy Tata Motors Finance stake
NTPC, Gujarat Power ink pact
HC jolt to
Toyota on ‘PRIUS’
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Airtel board discusses Zain deal progress
Gold falls on selling pressure
Aviation Notes
Investor Guidance
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SBI awaits nod to buy Tata Motors Finance stake
Mumbai, March 20 "We have written to the Reserve Bank. We are awaiting a response," SBI chairman O P Bhatt told reporters on the sidelines of an event here. The SBI is eyeing around 30 per cent stake in the financing arm of Tata Motors. Acquiring stake beyond this level will require approval from the government. "So, we will take somewhere between 20 and 30 per cent. That means we need the approval only from the Reserve Bank of India," Bhatt said. On part financing the Bharti-Zain deal, he said the bank had not made any commitment on advancing loan to Bharti, although it had been discussing the issue with the telecom major. "We have not committed (ourselves to) anything," he said. Last month, he had said the acquisition of Tata Finance would enable the SBI to strengthen its presence in the commercial vehicle segment and particularly to gain synergies in bus and trucks business. The SBI had acquired a majority 91 per cent stake in factoring services firm Global Trade Finance (GTFL) two years back. It is the largest bank in the country, with a total branch strength of 12,448. — PTI
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Bhatt: No plan to up lending rates
Mumbai: The SBI today said it had no plans to hike lending rates immediately, and would wait for further signals from the Reserve Bank to arrive at any decision.
"There is no plan to hike our lending rates immediately. We will wait till the April policy (of the RBI) to take a call (on hiking lending rates)," O P Bhatt told reporters here today. He noted that there was sufficient liquidity in the banking system currently. Bhatt said the Reserve Bank was expected to tighten its monetary stance further in the 2010-11 annual policy next month. — PTI |
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Ahmedabad, March 20 "The MoU inked between the Gujarat Power Corporation and the NTPC envisages power projects in the renewable energy sector with capacity of 500 MW which will require investment of around Rs 4,000 crore," Minister of State for Power Bharatsinh Solanki, who was present at the signing of the MoU, said. The NTPC had also shown interest in setting up a 1,000 MW coal-based power project near Khambhat in Gujarat and the state government had responded positively to the offer, Solanki said. On the MoU, Solanki said this was an attempt to encourage the renewable energy sector in the state. As per the agreement, the NTPC will fund the projects while GPCL will assist in identifying suitable location, clearances from the state government agencies and power evacuation. Of 500 MW projects, a 50 MW solar power project will be set up by the NTPC in the state in either Kutch or Banaskantha district where Rs 500 crore investment will be made while a 250 MW wind far project will be put up in Kutch. — PTI
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HC jolt to
Toyota on ‘PRIUS’
New Delhi, March 20 Dismissing the car company’s petition, Justice Indermeet Kaur allowed yesterday the use of the PRIUS trademark by an Indian company, Prius Auto Industries (PAI) which manufactures auto accessories. Appearing for PAI, advocate Deepak Jain had contended that the use of PRIUS trademark by his client was legal as it had registered it in 2002 when it started the accessory business. Toyota Motors had neither objected to this nor had sought registration for the name. Pointing out that Toyota had not explained why it took over six years to approach the judiciary, the court vacated the ex parte injunction granted in favour of the car company on December 22, 2009. Besides India, Toyota had plans to sell the PRIUS model in 40 countries. The car company had contended that if the stay in its favour was vacated, it would lose heavily.
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Airtel board discusses Zain deal progress
New Delhi, March 20 The funding arrangements needed for the acquisition were discussed at the board meeting, sources said. Company officials, however, declined to comment on the matter. Representatives of Singtel, which holds 31 per cent in Bharti Airtel, were also present at the board meeting. Bharti Airtel has made a $10.7-billion bid for Zain's African operations in Morocco and Sudan. Standard Chartered Bank has been appointed as one of the bankers for the transaction as it has a great deal of exposures in the African region. Barclays Bank and StanChart are Bharti's advisers for the acquisition. The State Bank of India is learnt to be part of the loan syndicate. The company last month had said it would pay about $9 billion (nearly Rs 44,000 crore) to buy African assets of Zain. On the $10.7-billion valuation Bharti had announced, the company officials said this was an enterprise value that included debt and equity. "The total agreed enterprise valuation of $10.7 billion is likely to result in a total payout of around $9 billion based on the estimated net debt of approximately $1.7 billion as on December 31, 2009," Bharti had said. Of the $9 billion payout, Bharti would be paying $8.3 billion immediately after the deal was closed and the remaining $700 million one year later. Bharti Airtel and Zain are in exclusive talks until March 25. If successful, this will enable Airtel to enter the fast-growing overseas market. — PTI |
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Gold falls on selling pressure
New Delhi, March 20 Standard gold and ornaments weakened by Rs 280 each to Rs 16,660 and Rs 16,510 per 10 grams, respectively, while sovereign shed Rs 25 to trade at Rs 14,000 per eight-gram piece. Selling pressure gathered momentum as gold prices fell the most in six weeks in New York last evening on dollar rally, which eroded the appeal of the metal as an alternative investment. Continued uncertainty about Greece's economy helped the greenback rise against the euro. — PTI |
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Aviation Notes The Parliamentary Committee on PSUs has passed serious strictures against the functioning and health of National Aviation Company of India Limited (NACIL). On the merger of IA and A-I, it has recommended that two managing directors -one for international operations and another for domestic routes - should be appointed even if one holding company continues to stay in place. Analysts are of the belief that no amount of equity will help NACIL breath free unless far-reaching changes on the political level are brought about and demerger again are planned for the two national carriers to function independently. The woes of passengers and other users will increase as the main runway 10/28 at IGIA will stay closed from April 2 for the next six months until. The new runway cannot bear the burden of the increased operations as it is not partially usable owing to a “Shiv Murti” around. Worldwide, runways are repaired in phases leaving these operational for some hours everyday. It is not understood why the private developers, Delhi International Airport Limited (DIAL), delayed repairs until the runway became unsuitable for operations. Civil Aviation Secretary M. Nambiar had a detailed survey of the runway recently and he, in consultation with engineers and technicians, decided for repairs on war-footing so that all three runways are fully operations before the Commonwealth Games in October this year. The Ministry of Civil Aviation has decided to use full-body scanners at IGIA from May on trial basis. The deployment of the scanner draws a mixed reaction. Many Muslim bodies have already lodged protests, screaming that these are anti-Islamic. Some fundamentalists denounce the scanner as 'a gunaah to be seen through such device'. Ministry officials say: "We are very sensitive to concerns related to the privacy of women. We will deploy only women to scan women." There have been some analysts who suggest that the full body scans may in place at IGIA, but they should be pressed into service selectively only if there is a lurking suspicion about a particular passenger. The analysts also scream as to what is the meaning of using scan on trial basis? Can they be done away with after spending crores in obtaining them?
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Investor Guidance Q: I am an Indian resident. I want to send some money to my son who is a single father in the US to help him with the education and other needs of my grandson. How much money can I send him and how? — Jhaveri A: You can send up to $3,00,000 per financial year (April-March) without taking any permission from any authority. The RBI rules allow an Indian resident to gift up to $2,00,000 and send up to $1,00,000 to any relative for family maintenance. The funds may be transferred through normal banking channels by way of a wire transfer. You will need the US bank details of your son. You can approach your bank and they will help you with the necessary paperwork involved. Withdrawal from PPF
Q: In The Tribune dated February 21, it has been suggested that for post-maturity extension of the PPF account (without contribution), withdrawals can be effected in one or more instalments not exceeding one in a year and the balance will continue to earn the interest till it is completely withdrawn. On my enquiry from the SBI, Panchkula, where I have my PPF account, I have been told that there is no such provision. One can extend the account with minimum contribution of Rs 500 p.a. and in that case, the investor can withdraw maximum up to 60 per cent of the maturity amount in the extended block of 5 years with one instalment in a year or otherwise he will have to withdraw the full amount at any time after maturity. However, the maturity amount will continue to earn the interest till finally withdrawn. Will you kindly clarify as to under which rule or amendment the PPF could be extended without contribution and withdrawn as per one's requirement? — S.C.Mittal A: Sec. 9(3) of the PPF Scheme deals with “Closure of account or continuation of account without deposits after maturity. The last para states ---” provided that a subscriber may, if he so desires, make withdrawal of the amount standing to his credit, from time to time, in instalments not exceeding one in a year. It is indeed unfortunate that officers managing the scheme are ignorant about its various provisions. If the bank officer still persists in his stand, kindly indicate the above reference of the law. If that does not help, you may write to the RBI. Housing loan
Q: I am a salaried individual and my query is about deduction on account of interest on housing loan and HRA. I live in a rented apartment. I also own an apartment in Mumbai, which is lying vacant and I have not been able to rent it out. While there is no doubt that I can claim the interest on housing loan and HRA simultaneously. However, my company is keen to cap my interest on housing loan deduction to Rs. 1,50,000 u/s 24. In my view, this is incorrect since my property is not self-occupied and it is deemed let out, since I am not staying in it and this is not due to my professional obligations but due to my own choice. Can you please give me your view on this case? Can I claim interest on housing loan in excess of Rs 1.5 lakh? Also if you agree to my view, it would be great if you can provide some reference of case law. (Since the CA appointed by my company is adamant that his view is correct and interest will be capped at Rs 1.5 lakh) — Preetam Gugale A : Your CA is right in his opinion. Since you own only one house, the same can be treated as self-occupied and its annual value will be treated as nil. In this situation, the interest on housing loan will be limited to Rs. 1,50,000. Please note that if you desire to treat your only house as deemed let out, the gross annual value will have to be added to your income (even though you have not earned any rent) and the entire interest on the housing loan will be deductible. This your employer will not process. You will have to file your return to claim the same. Even if you do so, it is doubtful that your claim will be accepted by the ITO. Under the circumstances, we strongly feel that you are an occupant of the property though not residing in it. You should rightfully claim the house as self-occupied and claim deduction of interest on housing loan of Rs. 1,50,000. Indexation benefit
Q: I recently read somewhere that the double indexation benefit that is being promoted by mutual funds nowadays may not actually be applicable. I am confused about this as recently a distributor was trying to sell me an FMP quoting the double indexation benefit. Can you throw some light on this? — Kamal A: Double indexation refers to a situation where you hold a mutual fund scheme (mostly FMPs or more recently close ended non equity funds) for a little more than one year but get the benefit of the index multiple of two years. The scheme is structured in such a manner that the term overlaps two financial years thereby affording the investor the tax advantageous double indexation benefit. In cases, where the scheme overlaps three financial years instead of two, even triple indexation is being offered. However, in all such cases, though at the time of investing, it is the current Income Tax Act (ITA) that is applicable, at the time of maturity, the proposed new Direct Tax Code (DTC) will apply. And this will change the tax impact. Now though the DTC too offers the indexation facility, there is a significant departure from the ITA. Under the ITA, the ratio of the Cost Inflation Index (CII) of the year of sale to the CII of the year of purchase is to be taken for cost inflation purposes. However, under the DTC, it is the ratio of the CII of the year of sale to the CII for the financial year immediately following the financial year in which the asset was acquired that has to be adopted! In other words, in the denominator, instead of the CII pertaining to the year of purchase, the CII pertaining to the year after the year of purchase has to be taken. This small but significant modification basically makes the entire double indexation concept redundant. In other words, under the DTC, double indexation turns into single indexation whereas cases of triple indexation will get converted to double indexation. At all times, the extra year’s indexation benefit will remain unavailable. Of course it must be noted that as yet the DTC is only in a draft stage and when it becomes operational, some of the currently existing provisions therein (including the above discussed one) may or may not be applicable in their entirety. However, as investors, one must be careful and make any investment with full knowledge of the facts. The authors may be contacted at
wonderlandconsultants@yahoo.com |
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The State Bank of India today said it was awaiting the Reserve Bank's clearance to acquire up to 30 per cent stake in Tata Motors Finance.
"We have written to the Reserve Bank. 
Ahmedabad, March 20
The Delhi High Court has rejected Toyota Motors claim to exclusive trademark right over the name “PRIUS” for launching a new car in India. The company had showcased the PRIUS model in the Auto Expo 2010.
