Wednesday, March 24, 2010

Fake currency threat to economy: foundation stone for a Rs 1,500-crore currency paper manufacturing unitFM

Source:fe:Agencies: Mar 22, 2010 at 1937 hrs IST





Mysore: The government today said a high- level review committee has been constituted to suggest a roadmap for total indigenisation of currency production as fake currency poses a threat to the nation’s economy.

Laying the foundation stone for a Rs 1,500-crore currency paper manufacturing unit at the Bharatiya Bank Note Mudrana premises here, Finance Minister Pranab Mukherjee said the ministry would pursue the review committee’s recommendations to its logical end.

Referring to the menace of counterfeit currency notes, the Minister said it posed a threat to the nation’s economy “albeit of a miniscule nature” and added that the government was vigilant in relation to all security aspects of currency.

With India’s achievements in the field of science and technology, the issue of indigenisation as such would not pose a problem, he said.

Stressing the importance of self-reliance in all aspects of currency inputs, he said 75 per cent of high-quality currency paper for printing is now being imported, putting a burden on the exchequer.

RBI Governor D Subbarao said, “Producing our own paper is decidedly cheaper, and importantly a check against counterfeiting.” He said though the circulation of counterfeit notes in the country is not alarming as per the international standards, it is a matter of serious concern.

“By an international metric, the incidence of counterfeit notes in India is not alarming. Nevertheless, counterfeiting per se is a matter of serious concern for the government and the Reserve Bank,” Subbarao said.

The banknote paper market is a strong oligarchy (sellers market). India’s demand for banknote paper - 18,000 tonnes per year - is huge in international terms, and on the supply side there are just 3-4 large producers, he said.

“This situation exposes us to vulnerabilities of a suppliers market in terms of price, quantity and timeliness, something that we should avoid or at any rate minimize,” he said.

RBI’s efforts at checking counterfeiting will be effective only if there are equally effective efforts by banks, he said adding that banks should ensure counterfeit notes are promptly detected once they enter the banking system, and that there is prompt and accurate reporting.

The Mysore unit would take care of bulk of the paper needed for making currency with a production of 12,000 tonnes of high quality paper against the need for 15,000 tonnes.

The first phase of production is expected to be completed by 2012, accounting for 6,000 tonnes and optimum production is expected around 2013.




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Final GST draft could be out by May,2010


Source:Tanu Pandeyfe::March 23, 2010 at 2036 hrs IST


New Delhi: The final draft for the goods and services tax (GST), the much-awaited indirect tax reform, could be out by May this year, after the empowered committee of state finance ministers meet next month. The draft’s release, an important step for introducing GST by April next year as scheduled, has to be carried out by May. This is because the 2011 elections in West Bengal will decide if the chairman of the empowered committee of state finance ministers, Asim Dasgupta, will continue in his capacity. Dagupta is expected to play a crucial role in steering states to a consensus on the rates and the tax base—the contentious issue among states and the Centre.

The final GST draft, which will sketch out the contours for the tax structure, has to be completed by May if the Centre wants to meet the 2011 deadline prescribed by finance minister Pranab Mukherjee, a senior finance ministry official told FE. “May seems to be the appropriate time for the presentation of the final draft. If the draft is not presented in May, bringing in GST by the next year would be extremely difficult,” the official added.

Moreover, there are fears that after the elections in West Bengal, Dasgupta, who is known to have immense persuasive powers, may not remain in the position to iron out differences among states and arrive at a consensus regarding the rate and tax base, a few ministry officials pointed out.

Amid all this, the April meeting of the empowered committee assumes significance since it is slated to give the final touches to the GST’s structure. Though the rates would be somewhere around 15% — considering both states and the Centre — there were reports that the Thirteenth Finance Commission had recommended a 12% GST rate—5% for the Centre and 7% for the states.

The goods and services tax would subsume most of the indirect taxes at the central and the states level, including excise duty, service tax and state VAT. The tax structure proposed earlier was scheduled to be implemented by April, 2010 but the deadline had to be postponed owing to the lack of a single voice among the states regarding the tax rates and the base.

The empowered committee has already come out with a discussion paper on GST saying it would have a dual structure—a central levy and a state levy— an issue not disputed by any stake holder till now. The...

More from Economy.finance ministry has also come out with its comments on the GST discussion paper....
 



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Goldman seeks nod to set up bank in India



Source: fe BureauMar 24, 2010 at 2335 hrs IST


New Delhi: Global investment bank Goldman Sachs on Tuesday said it has approached the Reserve Bank of India (RBI) for a banking licence in India. “We have applied for a commercial bank licence. Our file is in but the process for this is a long one,” Brooks Entwistle, Goldman Sachs CEO and managing director (India) said on the sidelines of a conference organised by OP Jindal Global University.

Regarding plans to launch their own asset management company in the next 12 months, Brooks said that Goldman Sachs already has a licence for asset management business. “We had this plan of launching an asset management company for a long time but were not able to execute it. We intend to launch our management business in the next 12 months and we have already obtained the licence for it,” Brooks said.

About its India investment plans, Brooks said, “In terms of investment, we have invested $2 billion in India till now. We have invested in 44 companies since we have arrived and are much focused on the Indian consumers. We are also trying to get more companies to invest in India.”

Sharing his plans for recruitment, Brooks said, “We look for talent everywhere and we plan to recruit more people this year. Goldman Sachs as a firm is a big investor and we expect this to become more dynamic with each passing month.”




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UCO Bank trims issue size to 6 cr shares


Posted:FE: Agencies: Mar 23, 2010 at 1456 hrs IST



New Delhi: State-owned public sector lender UCO Bank said it has cut down the issue size to 6 crore shares of its proposed follow-on offer (FPO), expected to hit markets in May.

"We have cut down the shares size now and are going in for only six crore shares issue against the earlier proposed size of 13.5 crore equity," UCO Bank Chairman and Managing Director S K Goel said in New Delhi.

At the current market price, the bank would be able to raise about Rs 400 crore from the public offer.

The board, in its meeting on January 30, decided to issue 6 crore equity shares with a face value of 10 rupees each at a suitable premium for raising funds.

The bank intends to come out with the public offer in May. Post FPO, the government holding will come down to 58.6 per cent from the existing 70 per cent.

Shares of the bank were trading at Rs 56.80, up 1.88 per cent during the afternoon trade on the Bombay Stock Exchange.

Asked about capital infusion, he said, during the month the bank expects to get Rs 500 crore from the government.

This would help the bank in raising its capital to risk-weighted asset ratio (CRAR) over 12 per cent, he said, adding that the government would infuse capital in the next fiscal as well.

However, as per the supplementary demands of grant tabled in Parliament recently, UCO Bank would get Rs 450 crore during 2009-10.

According to the supplementary demands of grant the government would make a capital infusion of over Rs 1,200 crore in three public sector banks including, UCO Bank, United Bank of India and Central Bank of India.

Of the total, UCO Bank and Central Bank of India would get Rs 450 crore each while United Bank of India, which recently went for an initial public offer, would get financial assistance of Rs 300 crore.

Last fiscal (2008-09), the government infused Rs 1,900 crore as Tier-I capital in four public sector banks namely Central Bank of India, UCO Bank, Vijaya Bank and United Bank of India to maintain a comfortable level of capital to Risk Weighted Asset Ratio.

Cheque drop boxes unsafe

 

Source:  Fe:Agencies,Mar 23, 2010 at 1903 hrs IST


New Delhi: Two men were arrested in the capital for allegedly siphoning off Rs 1.5 crore by stealing cheques from drop boxes and encashing them by opening bank accounts using forged documents, police said today.

The arrested men have been identified as Shailesh Choudhary (37), a resident of Dwarka, and Sakishan Pal (56), hailing from Meerut.

Bulk of the money they collected through fraud was spent on horse racing, Deputy Commissioner of Police (South) H G S Dhaliwal said.

"They used to steal cheques from drop boxes installed at petrol pumps and encashed them by opening bank accounts in different banks in Delhi and other states.

They were arrested in 2004 by Meerut Police and in 2007 by South Delhi police for committing the same offence, he said.

The arrests came following investigations into complaints filed by South Indian Bank, Indian Bank, HDFC Bank, Standard Chartered Bank and Citi Bank.

In October 2009, they allegedly committed a fraud in Jaipur and this month, they stole a cheque of Rs three lakh of a leading eye surgeon of South Delhi and encashed the same in HDFC Bank by opening a fake account, Dhaliwal said.

So far, 30 such incidents have come to notice.

During investigations, it came to light that all bank accounts were opened by producing fake driving licenses having the same pattern. In several accounts, same photographs were used.

Police zeroed in on Chaudhary as he was previously arrested in a bank fraud case by adopting same modus-operandi.

"Chaudhury got involved in theft of credit cards and purchased articles with the stolen credit cards. In 2004, he was arrested in Meerut in credit card theft. After his release from jail, he shifted to Dwarka," Dhaliwal said.

They used to steal cheques in the afternoon hours as usually drop boxes were full in such hours. Two cars and five expensive mobile phones were recovered from them.
 
Source:  fe Bureaus , Mar 24, 2010 at 2341 hrs IST



Chennai: Cash-strapped fertiliser major Southern Petrochemical Industries Corporation (Spic) has sold its entire 52.17% stake in Indo-Jordan Chemicals Company Ltd to Jordan Phosphate Mines Company Ltd (JPMC).

JPMC, which is a partner in the Indo-Jordan Chemicals Company joint venture, has bought the stake for a consideration of $50.6 million (nearly Rs 230 crore).

Indo-Jordan Chemicals Company is a three-way joint venture between Spic, JPMC and Asia Investment Company SAA.

The company has entered into an agreement for the sale of its 2,31,63,000 equity shares of Jordan dinar 1 each aggregating 52.17% in the joint venture firm Indo-Jordan Chemicals Company with Jordan Phosphate Mines, Spic said in a regulatory filing on Tuesday.

Spic is believed to have pumped around Rs 170 crore into the Indo-Jordan Chemicals Company joint venture in early 1990s. However, company sources were not available for comment.

Spic is expected to utilise the fund incurred via stake sale to restart its Tuticorin plant, which has been almost defunct for close to three years for want of working capital funds and supply of key feedstock---naphtha from IOC. IOC stopped supply to Spic since the company owes the oil behemoth over Rs 370 crore in arrears.

The Jordan JV was set up mainly to source phosphoric acid and sulphuric acid to Spic's plants in India but had to stop the production few years ago owing to mounting payment dues from Spic.

Saddled with a debt of around Rs 3,000 crore, Spic has been struggling to restart its operations at Tuticorin as the banks and financial institutions moved the Debt Recovery Tribunal (DRT) to recover their dues which later took a legal turn hitting the production at its Tuticorin plant. Meanwhile, most of the banks and financial institutions sold their non-performing assets of Spic to Asset Reconstruction Company of India Ltd (Arcil). Arcil currently manages close to 85% of Spic's bad debts.

Recently, Arcil converted its Rs 30-crore loan to Spic into equity for a little over 13% stake in Spic. Arcil also sold some of the assets of Spic to raise funds in a bid to meet the working capital requirements of the company and also asked the promoters to bring in Rs 50 crore initially to start the Tuticorin plant, which has a capacity to produce 7 lakh tonne of urea and 5 lakh tonne of DAP. The company at least needs a minimum of Rs 500 crore to meet the working capital expenditures...

Karnataka Co-op bank announces novel scheme-

 


Source:Madikeri, Mar 19, DHNS:

Madikeri taluk Primary Co-operative Agriculture and 
Rural Development Bank has decided to
give 2 per cent concession on interest on the
loan to those who repay the loan before March 31.
 Addressing a press meet on Friday, Bank President
Appachattolanda and Muthappa said that in 2008-09, 288
members have availed the facility of concession on interest.   
In 2009-10, Rs 157.21 lakh has been lent as loan.
However, Rs 697.92 lakh has to be recovered.

Owing to the delay in announcing coffee package,
the payment of loan is also delayed by the growers.
The bank has been fetching profits since 2005-06. In 2008-09,
it has posted Rs 14.74 lakh profit.

Bank fetches Rs 3 lakh per month from rent from its buildings.
We are planning to increase it to Rs 5 lakh. In 2006-07 and 2008-09,
the members were paid 10 per cent dividend.
He said the Centre has set June 30 as deadline to repay the loan.

“Those who repay 75 per cent under loan waiver scheme of 2008,
a concession of 25 per cent will be given.
“However, it will not be applicable to all types of loans,” he clarified.