The Power Of Failure: We Get To Decide What It Means

We all dream to reach a certain success someday. Because of this we all are afraid of the very same thing failure. But we should understand that we all have to experience some sort of failure in our lives. It is part of growing up and it is part of life itself. Failure does not have to always be seen as something negative. You can decide if a bad situation is really bad or if you see it as part of a work in progress. When you get to see failure in a different perspective, you will see that it has the power to help you to your goal.

Everyone Makes Mistakes

Do not be so hard on yourself whenever you make a mistake or fail at a task. Everyone makes mistakes. Nobody is perfect, remember?  Whenever you face one failure, accept your fault and do something to make things right. Whenver you fail at something, you just have to get up and keep trying. You will get to your goal eventually.

One Day You Will Laugh at This

Some things that bother you now may not seem all that bad after a couple of years. Try to remember some failures you have had in the past that you were so upset about and see if they still have that effect on you now. You may be surprised that the problems you cried about years ago are some things you can laugh about now.

Learn From Your Mistakes

I am not saying that you can brush off every failure and laugh at them.Every mistake is a lesson you have to learn from. As the saying goes, the first time you do wrong is a mistake. If it happens again, then it becomes a choice. Your mistakes and failures make you wiser,.You should be smart enough to know and avoid the reasons that led you to them.

Everything Happens For A Reason

I believe that everything happens for a reason. I used to ask why some bad things have happened in my life. Later on, I find out that one bad event in my life has led me to much greater things that never would have happened if not for some of my failures in the past. Trust that there is a good reason for your failures  and things will turn out fine.

Rome Was Not Built In A Day

No dream or goal is ever easy.  Rome was not built in a day, you know? And with every great success, there have been some failures along the way that led to something great. Your failure now may just be part of a work in progress. Do not give up and do not be afraid to make mistakes. It is all part of the game of life.

No Pain, No Gain

I always say that life is not a bed of roses, but its true. If you really want to succeed or achieve a certain goal, you have to be willing to work hard and sacrifice to get it. The journey to success will have its ups and downs. It will have its share of joy and suffering. And yes, you will encounter failure once in a while. But pain is part of the learning process. Failures and mistakes are experiences that will make you wiser and stronger as you climb the ladder of success.

Blackmoney: Modi govt appoints outgoing CBDT chief KV Chowdary as SIT advisor

PTI : 8 mts ago ; 31 Oct 2014 :18:41 IST

New Delhi: Senior IRS officer and outgoing CBDT Chairman K V Chowdary was today appointed by the Government as an Advisor to the Special Investigation Team (SIT) that is probing black money cases.

An expert on tax issues and financial investigations, Chowdary will take charge of the new post from tomorrow on his retirement after serving over three decades in the Income Tax cadre of the Indian Revenue Service (IRS). The 1978-batch officer retired today as the Chairman of the Central Board of Direct Taxes (CBDT).

"Both the SIT and government wanted the officer to continue as he has been dealing with blackmoney cases for a long time and has been a part of all the deliberations that have taken place on this subject in the last three years," a senior Finance Ministry official said.

The SIT is headed by retired Supreme Court Judge M B Shah with Vice-Chairman Justice (retd) Arijit Pasayat and heads of 11 different organisations or departments as members on the high-powered panel.

SIT sources said Chowdary would be carrying out all important works of coordination between the agencies on this apex panel and he would also be meeting various national and international stakeholders in furtherance of the government's

aim to curb the menace of black money.

"However, the terms of his mandate will be announced later by the Finance Ministry," they said. An official order issued today evening by the Finance Ministry said Chowdary will keep drawing the same salary, allowances and facilities, except pension benefits during this new tenure, as allowed to him as the CBDT chief.

His tenure, according to the order, will be for a period of six months and it could be extended further if need arises.

Chowdary has had one of the longest stints in CBDT, the apex policy making authority of the Income Tax department, having held the charge of Member (Audit and Judicial) in the board before taking over charge of investigations. He has earlier worked as the Director General of I-T (Investigations) in the national capital where he headed a number of high-profile tax probes, including those relating to the 2G spectrum allocation case and the HSBC Geneva taxpayers list along with a number of cases dealing with black money and tax evasion.

The officer is also credited with initiating a host of new steps to enhance and fine-tune the snooping capabilities
and investigations of the Income Tax department. A number of high profile searches and raids were carried out by Delhi investigations unit of the department during his tenure.

He has earlier served as the Chief Commissioner of I-T in Vishakhapatnam and Director (Investigations) in Nagpur. He was part of the Revenue Secretary-led delegation which recently met Swiss authorities in Berne in order to take bilateral talks forward on these issues and probe into the suspect illegal funds stashed abroad by Indians in the banks of the Alpine nation.

Chowdary's batchmate and CBDT Member Anita Kapur is slated to take over as the new CBDT Chairperson and sources said order for her appointment to the top post are expected to be out very soon.

CBDT has six members apart from the Chairman and is the apex body for framing policy and administrative issues related to direct taxes and the Income Tax department.

Mayaram :Finance ministry to tourism to minority affairs: Arvind Mayaram shifted once again

:PTI :Oct 31, 2014 07:40 IST

New Delhi: Arvind Mayaram, who was shunted from finance ministry to tourism only a fortnight back, has now been transferred as secretary in minority affairs ministry even before he took charge of his new post.

The Appointments Committee of Cabinet (ACC) has approved cancellation of order of appointment of Mayaram, a 1978 batch IAS officer of Rajasthan cadre, as Secretary, Ministry of Tourism, a statement issued today by the Department of Personnel and Training (DoPT) said.

Mayaram had been replaced by Rajiv Mehrishi, who was Rajasthan Chief Secretary, as the Finance Secretary on October 15.

Also the ACC has approved that Ratan Ratan P Watal, Secretary, Department of Expenditure, Finance Ministry, will hold additional charge of Finance Secretary for a period of one month with immediate effect or until the assumption of charge by Mehrishi or until further orders, whichever is earlier, it said.

Watal is a 1978 batch IAS officer of Andhra Pradesh cadre. Mayaram has now been appointed as Secretary, Ministry of Minority Affairs in place of Lalit K Panwar, the DoPT said.

Panwar, a 1979 batch IAS officer of Rajasthan cadre, has been appointed as new Secretary in Ministry of Tourism, it said.

PTI

Home loans : YES Bank enters home loan business

B S  :Nupur Anand  |  Mumbai  

October 30, 2014 Last Updated at 00:28 IST

Move follows RBI's decision to allow banks to raise long-term resources to finance affordable housing

YES Bank has entered the burgeoning housing loan market, with a focus on the affordable housing segment.

The move by the private lender, which started operations 10 years ago, comes in the wake of the Reserve Bank of India’s decision to allow banks to raise long-term resources to finance affordable housing. The money raised via bonds will not attract the cash reserve ratio and statutory liquidity rationorms. As a result, this will reduce the cost of funds for banks.

“Home loan is a strategic product for us. The product has reached our branches and we are in the process of rolling it out,” said Pralay Mondal, senior group president (retail and business banking).  The average size for mortgage loans will be about Rs 35 lakh, he added.

According to a report by rating agency Icra, the home finance market in India stood at Rs 9-lakh crore at the end of March. Of this, banks finance 63 per cent.

Till now, the bank had been offering loans in collaboration with Dewan Housing Finance and Indiabulls Housing Finance.

“With the new infrastructure bonds, one can effectively work like a housing finance company. Even if you give the loan at the base rate, you still have a margin to play as 30 per cent of it will qualify for priority-sector lending. It is a strategic product for us and it makes immense sense to get into it right now,” explained Mondal. He, however, did not divulge the interest rate.

Till now, the bank had been offering loans in collaboration with Dewan Housing Finance and Indiabulls Housing Finance.

According to RBI norms, loans of up to Rs 50 lakh for a property valued up to Rs 65 lakh in six cities - Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad - and up to Rs 40 lakh in other centres, will now qualify for affordable housing.

This comes at a time when the bank is working at driving the share of the retail banking business. Currently, retail contributes to 43 per cent of the total business. Mondal believes it is likely that the retail mix can increase to 50 per cent in two years.

Uday Kotak: Now, wait for the next Big Thing

  BS :Uday Kotak  

October 27, 2014 Last Updated at 21:37 IST

India is a great motion picture rather than a static photograph, as the evolution of

 the fi

nancial sector over the past four decades has shown

The Indian financial sector has undergone a metamorphic shift over the past four decades. Encapsulating this journey awakens several nostalgic events of my own life - a cricket ball that hit me, an academic year lost, lessons learnt at our family business and a frank chat with my father to make a pivotal choice between a job with a multinational or a leap into entrepreneurship. 

Soon enough, I was on a path that traversed a 300-square-foot workspace to a head office in the heart of India's financial hub, the Bandra-Kurla Complex, better known as BKC.

Looking back, the transformation of banking from a purely social project to a more sustainable socio-commercial business dramatically unlocked India's economic potential. However, in the earlier socialist era, profitability and governance were relegated to the immediacy of providing institutional credit, leading to structural inconsistencies. Administered rates and operational inflexibility choked the competitiveness of banks. One such gap sparked what I saw as an opportunity: bill discounting!

In the early eighties, banks lent to companies at 17 per cent and paid six per cent to depositors, a surreal 11 per cent spread.

  I built a small business borrowing from friends and family at 12 per cent - double what they would earn from their deposits with a bank - and buying receivables of Nelco, a Tata company, at 16 per cent. This four per cent spread paved the way for Kotak Mahindra Finance Ltd in 1985.

Over the years, we developed our business model with a vision of "Concentrated India, Diversified Financial Services". In 1987, we ventured into the lease-and-hire-purchase market. 

Shortly after, we were financing passenger cars. Incredibly, automobile financing was non-existent in that era. A customer wanting to buy a car would have to wait a long time for delivery. We developed a model that tackled both the time and finance challenges simultaneously, buying cars directly from dealers and selling them to customers who wished to buy a car, requesting that they take financing from us.

As we chugged along, India was rocked by an economic crisis. The country was left with forex reserves of only $1.1 billion, amounting to 15 days of import coverage. In May 1991, the government pledged 67 tonnes of gold to the Bank of England and a Swiss bank to secure an emergency loan.

 The financial sector reforms in the early nineties sought to correct these imbalances. Reforms concentrated on building institutional strength and infusing accountability. In a decision with far-reaching implications, Manmohan Singh, then finance minister, took the bold step of devaluing the Indian currency in two tranches by 20 per cent, giving a big boost to Indian exports and opening the gates for foreign direct investment (FDI) and foreign institutional investors (FIIs).

The economic landscape transformed rapidly thereafter. The capital markets surged, and a positive business environment started blossoming. The early nineties also saw the draconian Controller of Capital Issues (CCI) being dismantled, and replaced by the Securities and Exchange Board of India (Sebi).

 However, this period exposed structural distortions that were exploited by certain parties. The capital markets scam in 1992 eroded market confidence. Around this time, we made our first acquisition, taking over FICOM - one of India's largest financial retail marketing companies at that point of time.

As markets recovered, the banking industry opened up further. The emergence of private banks, including ICICI Bank, HDFC Bank, IDBI Bank, UTI Bank (now Axis Bank), in 1993, added a new dimension to the financial sector. Interestingly, within a few years three banks - Times Bank, Centurion Bank and Global Trust Bank - lost their identities through acquisition. During this period, we added a new chapter to our story with the Goldman Sachs Joint Venture (JV), foraying into investment banking. Shortly thereafter, we also entered the asset management business.

The nineties saw non-banking finance companies (NBFCs) mushrooming across the country. However, the Southeast Asian crisis of 1997-98 became a major testing point. Before the crisis, there were 4,000 NBFCs in India. Within the next couple of years, 99 per cent went under. We were one among the two dozen-odd that survived, learning valuable lessons along the way.

2003 was our major turning point. As the economy blossomed, the Reserve Bank of India awarded us a banking licence, making us the first NBFC to become a bank. This was an exceptional period for us as we forayed into insurance, partnering with Old Mutual when the insurance market opened up to private players.

 We also realigned our joint venture with Ford Credit, taking 100 per cent ownership. In 2004, we launched a private equity fund and in the subsequent year, a real estate fund. Further down, we bought out Goldman Sachs' equity stake in our investment banking and brokerage arms.

The good run of the financial markets was hit by the subprime lending crisis in 2008. The collapse of Lehman Brothers was a big blow to markets globally. As economies were struggling to recover, the 2011 meltdown hit. Our lessons through these agni parikshas, or trials by fire, defined three important values - prudence, humility and simplicity - that are now ingrained in the way we do business.

What lies beyond? The macroenvironment has become more fluid and interactions have changed both in terms of content and context. Increasing internet usage, mobile penetration and fast-changing technology are creating a disruptive impact. I anticipate a significant proportion of business will shift to new media platforms over time and in a decade or so they will become the way of life.

On a more immediate note, the change of guard at the Centre has led to incredible optimism in the market. I believe we are closer to achche din (good days). Markets are back in swing and retail investors are steadily participating, something that was missing over the last few years. As an organisation, we are building capacity for a bigger, bolder and better Kotak.

India is a great motion picture, not a good photograph. There is never a dull moment, reflecting a rich heritage and culture.

 And the depth of its liveliness can be traced in its financial and economic realities, marked by unique twists and turns.

 From a closed economy dominated by nationalised banks and excessive government control to an era where private players are setting new benchmarks, the Indian financial sector is perhaps on the cusp of its next great transformation.

---

The writer is Executive Vice-chairman and Managing Director, Kotak Mahindra Bank. Kotak Mahindra and associates are significant shareholders in Business Standard Ltd

What's so special in officers of govt-run Dena Bank?

  BS  |N Sundaresha Subramanian  Oct 31, 2014

Many from this small lender have made it to other bank boards over the past 5 years



Dena Bank is among the smallest of public sector banks (PSBs). Its staff of 11,093 people is next to last among the state-run lenders. Only Punjab and Sind Bank has fewer employees, at 8,870. In most banking parameters such as deposits, advances, interest earned and net interest income, the Mumbai-based bank occupies the last but one position. Its name has often come up as a candidate for merger with a larger banks, whenever such debate surfaces.

To make it further clear, compare Dena’s vital statistics to those of Punjab National Bank (PNB). The second largest PSB had 63,292 employees. It had four times the deposit base of Dena at Rs 4.51 lakh-crore. PNB had, at the latest year's data, 4.5 times Dena’s advances at Rs 3.49 lakh crore and made a six-fold net profit of Rs 3,339 crore.

GOOD THINGS COME IN SMALL PACKETS?

The curious case of Dena Bank officials who were ahead of their peers in bigger banks, in making it to coveted positions... 11,093 No of employees at Dena Bank (Only Punjab & Sind Bank has lesser no of staff at 8,870) 63,292 No of employees at PNB, the second largest state-run bank 8 No of Dena Bank GMs who made it to executive director (ED) positions (While PNB, a Goliath in comparison, saw only 6 of its GMs rising to the positions of of ED) 13 Bank of Baroda GMs who became EDs in the past five years 9 Allahabad Bank GMs who became EDs in the past five years S K Jain Now-jailed CMD of Syndicate Bank, arrested by CBI in a bribery case, was earlier with Dena Bank

In one critical parameter, though, Dena Bank beat the Goliath. In the past five years, eight Dena general managers (GMs) made it to executive director (ED) positions, whereas only six from PNB managed it.

And, not only PNB — Dena officers did better than their counterparts in most other banks. An analysis of 76 board appointments over five years shows Dena emerged as the third largest source of board members for PSBs. Only Bank of Baroda (13) and Allahabad Bank (9) saw more of their GMs becoming EDs in the past five years. Four -- Indian Bank, UCO Bank, United Bank of India and Punjab & Sind -- did not have even one appointment of this 76. Bank of India equaled Dena’s tally at eight; others managed between one and seven board seats. But none punched above their weight like Dena’s officers did.

Dena GMs not only beat their peers from much larger banks but went on to take up the top position in much larger lenders on a couple of occasions. One of these was the now-jailed chairman and managing director of Syndicate Bank, S K Jain. CBI arrested Jain early last month while allegedly taking a bribe from a corporate houses. He was among the most rewarded GMs from Dena. From the second smallest bank, he took a board seat in the much bigger Bank of Baroda and then became CMD of Syndicate Bank in 2013.

An email seeking comments on the extraordinary performance of Dena officers to the bank's CMD last month did not elicit any response.

Critics of the current system of selecting bank managers for positions on PSB boards say the lack of proper guidelines has made the process controversial and susceptible to favoritism and corruption. The finance minister himself has referred the issue for review to the Reserve Bank of India. Bankers say it is near-impossible for a person from a smaller bank to come up winner in a strictly merit-based selection process. For, in range of products, complexity of issues and quality of work, the larger banks would offer much more exposure to its officers.

So, the fact that Dena Bank officers have managed it on a consistent basis has raised several eyebrows in banking circles. What makes Dena GMs more successful than others in the national selection process? Sources allege an influential Gujarati politician in the earlier United Progressive Alliance regime and his bureaucrat ally in North Block had created a green channel of sorts. Incidentally, Dena Bank leads the SLBC (State Level Bankers’ Committee) for Gujarat. Successive Dena board aspirants are said to have used this channel effectively.

A former CMD of a PSB said the process was not transparent and criteria kept changing. “People are shortlisted by the ministry on seniority and merit, and called for an interaction — they don’t call it an interview,” he said.

Acknowledging that a number of smaller banks have dominated board appointments as ED and CMD in recent times, former Bank of Baroda chief Anil Khandelwal said: “I would only say the selection process and grooming process of board members and CMDs needs reforms. It appears the system has a number of flaws. The selection of a chairman cannot be only a departmental process. A lot of due-diligence has to go into (examining the) experience and leadership qualities of candidates.”

He said it was time the earlier Khandelwal committee recommendations on a system of appointment for CMDs and EDs is implemented. He contended a pool of talented deputy general managers and GMs should be identified and put through a rigorous system of leadership development.

Adding: “The scheme of board nominations dates back to the time of bank nationalisation; it is 45 years old. Board reforms are long overdue and are unpostponable in the current context.” He referred to the PJ Nayak committee report on banks' governance, which highlighted many pitfalls in the nomination of people on the board of PSBs.

The report had said, “It is unclear that the boards of most of these banks have the required sense of purpose, in terms of their focus on business strategy and risk management, in being able to provide oversight to steer the banks through their present difficult position. The boards are dis-empowered and the selection process for directors is increasingly compromised. Board governance is, consequently, weak.”

Black money : List with 627 names given to Supreme Court

IndiaToday.in  New Delhi, October 29, 2014 | 

The Centre on Wednesday named of 627 Indians holding illegal bank accounts abroad in a sealed cover to the Supreme Court, which on Tuesday had rapped the government for not revealing all the information in the case.

Attorney General Mukul Rohatgi submitted three sets of lists with the 627 names of people stashing untaxed or black money to the apex court, which fixed March 31, 2015 as the deadline to conclude the investigation into the case.

Talking to reporters after the hearing, Rohatgi said, "The court after hearing the Centre's arguments did not open the cover but directed that the sealed covers should be given to the Special Investigation Team probing the case today itself."

Rohatgi said more than half of the people in the list are Indian nationals while the rest are Non-Resident Indians. He said that most people named in the list, which was last updated in 2006, have their accounts with the HSBC Bank.

The Supreme Court also directed the government to share the list with the Enforcement Directorate and the Central Bureau of Investigation. The case will be next heard on December 3 after the SIT submits its status report by November 30.

The first list submitted in the Supreme Court contains the details of treaties and agreements India has signed with Swtizerland and other nations where the illegal money is said to be stashed. The second list has all the names while the third list has a status report on the investigation in the case.

Earlier on Wednesday, Home Minister Rajnath Singh said the Centre is not interested in protecting anybody and will follow the court orders. "The government is not interested in protecting anybody. We will obey the court orders," Singh said.

On Tuesday, the Supreme Court had asked for all the names in a sealed cover, a day after the government named eight people being prosecuted for stashing untaxed money in illegal bank accounts in other countries. Sources say there are at least 800 Indians holding such accounts in foreign nations.

"The new regime cannot come and tell us to modify our orders. We will not clarify or modify our 2011 order," the apex court said, adding, "The government's only role is to request for information on black money accounts from foreign banks."

In 2011, the Supreme Court, which has been monitoring the investigations into black money since 2009, had asked for complete disclosure of information on Indians holding black money abroad.

On Monday, the Centre revealed eight names of Indians holding illegal foreign bank accounts, which included consumer products giant Dabur India promoter Pradip Burman, Rajkot-based bullion trader Pankaj Chamanlal Lodhiya, Goa mining company Timblo Private Ltd and five of its directors - Radha Satish Timblo, Chetan S Timblo, Rohan S Timblo, Anna C Timblo and Mallika R Timblo.

Fraught with Challenges : Step by step, a struggle to achieve their dreams

Babu Ezhil Gunalan and Karpavalli were able to move into a home a few 
months ago after a long spell as pavement dwellers. Photo: M. Vedhan

H  :   Aloysius Xavier lopez :October 28, 2014 02:10 IST  

A blind couple on the darker side of the city and their fight against all odds

He hawks popcorn on suburban trains from 10 a.m. to 9 p.m. every day, to try and eke out between Rs. 200 to Rs. 300 to support his wife’s dream of becoming a teacher and also, towards caring for their one-year-old toddler.

Babu Ezhil Gunalan (30) is blind, also to the challenges that life throws at him. He hopes that soon, his wife B. Karpavalli (30), who is also blind and studies at Presidency College, will complete her graduation in English literature and pursue a B. Ed immediately so that she can become a teacher. 

A student of Tamil literature from Tiruchi’s National College, Gunalan says his B.A. degree has not helped him find a job. “That’s why I wanted her to pursue English literature,” he says. “That’s why this train life for me.”

The blind couple, who got here from their home town Tiruchi three years ago after their parents opposed their inter-caste love, have made Chennai their home against all the odds. The last couple of months have been relatively easier as they have rented out a home at Thiruninravur at a monthly rent of Rs. 2,500. 

Their newborn desperately needed shelter from rains. But life has not always been under a roof. They have spent a good deal of their life together in the city as pavement dwellers.

The couple, who met at the voluntary organisation Vizhi Ilanthore Mahalir Maruvaazhvu Maiyam (Home for rehabilitation of blind women) in Tiruchi, arrived in Chennai with just Rs. 3,000 in cash and a few friends to turn to.

City life, Gunalan says, is fraught with as many challenges as it provides hope. While Karpavalli pursues her study with the hope that she would one day be an English teacher at a school, Gunalan toils hard.

 He has turned to usurious money lenders (kandhu vadi) to make ends meet. He has borrowed Rs.10,000 and has to repay at an monthly interest of Rs. 10 per 100 every month. The sheer math of it makes the loan mind-boggling.

“But what option do I have,” he asks. “No bank would give me a loan as I don’t have a regular income to show or some property in my name. Loans at high rates of interest are bothering us. A friend, who is also blind, recently committed suicide because he was unable to repay debts.”

There are some spells during their stay when they find themselves at the mercy of friends or some sheer providence – at times considerate officials have allowed them to stay overnight at railway stations.

The big dream is to one day own a house.

 “I have to find a home of my own. Homelessness is quite painful,” he says.

Get Caught Tax Evaders :The taxman is tracking you

BL 25 Oct 2014

The tax department is using technology to ferret out evaders

Quite a few people have a pathological aversion to paying taxes. To avoid tax, they put through convoluted transactions, enlist the help of spouses, friends and relatives or even open dozens of bank accounts to evade the taxman.

But technology is transforming the way the Indian tax department operates. So, anyone who thinks that such old-fashioned strategies can save them from the taxman is living under a delusion.

Tracked by TIN

As a part of an e-governance initiative of the Government, the Income Tax Department, in 2004-05, flagged off the Tax Information Network (TIN). 

The TIN’s basic purpose is to use technology for computerising the collection, accounting and monitoring all direct taxes down to each individual account, so that leakages are plugged.

Employers, banks and other organisations who deduct tax at source from your salary or income are required to file complete details of it (citing your PAN) with the taxman.

 This is then matched with the actual tax you deposit with the bank to arrive at any discrepancies. And for good measure, the tax department also takes stock of all your high-value transactions for the year, and can investigate if you own disproportionate assets, a la Jayalalithaa.

AIRing out high value deals

If you thought the taxman picks only on the salaried and lets the real fat cats go tax-free, you will be happy to learn about the Annual Information return or AIR. From financial year 2004-05, the Income Tax Department has been collecting details of all the individuals who make ‘high value transactions’ during the year from the organisations which facilitate them.

Banks, credit card issuers, mutual fund houses, companies, registrars and the RBI are legally bound to file the AIR with the tax department.

 This filing not only consolidates your transactions through the year, it also cites your PAN number. The intent behind this filing is to track down all those who lead the lifestyles of the rich and the famous, and yet get by with skimpy payments to the taxman.

But it is not just the wealthy tax evaders that the tax department is after. It is quite interested in the small fish too. One tool it employs effectively is the ubiquitous Tax Deducted at Source (TDS). 

Today, TDS is applicable on practically every source of income you can think of. Salaries are always paid after a TDS deduction by the employer. Other non-salary incomes are subject to TDS too — interest from investments, rent received from entities, commission, professional fees, even lottery earnings.

In most cases, the TDS payments don’t actually represent your entire tax liability for the year. They are only a token deduction and you still have to calculate and pay taxes at your income tax slab rate. 

Here the taxman will know immediately if you skip the residual payment because he already has all the details of the payment you received, thanks to the TIN.

In recent years, finance ministers have applied TDS to several new transactions where evasion was pervasive. In 2013, it was made compulsory for all buyers of property valued at over ₹50 lakh to deduct TDS at 1 per cent before paying the seller.

 From October 1 this year, a TDS of 2 per cent applies to all insurance proceeds that you receive from insurance plans where the premium is more than 10 per cent of the life cover. Opening dozens of bank accounts and submitting form 15G or 15H to avoid TDS is no longer foolproof. 

The tax department requires all banks to specifically flag depositors who claim such exemptions. So, given all the effort the tax department is taking to stay two steps ahead of evaders, why go to so much trouble to evade taxes? Just pay up and rest easy.

Gold Rush :₹70,000-cr worth Swiss gold has headed to India

  

PTI  :NEW DELHI/BERNE, OCTOBER 26:2014

As banks in Switzerland come under greater scrutiny, the quantum of gold having left Swiss shores for India so far this year has reached a record high of over 11 billion Swiss francs (about ₹70,000 crore). 

The gold exports from Switzerland to India stood at over 2.2 billion Swiss francs (about ₹15,000 crore) in September alone, which is double the figure for the previous month, show latest data released by Swiss Customs Administration.

As a result, the total Swiss gold exports to India since January this year has grown to 11.4 billion Swiss francs, show data compiled by the Swiss government’s cross-border trade monitoring agency.

While industry watchers attribute the surge during September partly to the increased demand for the yellow metal ahead of Diwali and other festivals in India, the sudden spike is also being seen suspiciously in the backdrop of gold being used for ‘layering’ purposes to move funds from Swiss banks amid growing scrutiny for suspected black money.

 According to banking industry sources, banks operating in Switzerland, including those headquartered in the Alpine nation and the Swiss units of other European banks, have turned wary about dealing with their Indian clients in the wake of a growing scrutiny of such accounts.

A number of Swiss banks, including three with significant global presence, have begun telling their Indian clients to sign undertakings that are aimed at ‘derisking’ the banking institutions from potential risks arising out of regulatory actions against the bank customers by foreign governments.

Some banks are also telling their clients to close their accounts if they are not ready to take such risks, or if they have apprehensions about such accounts not being compliant with regulatory requirements in their home countries. 

Through these ‘derisking’ undertakings, the customer agrees to take responsibility for any possible regulatory or administrative compliance with international norms.

TOP Less Banks :One in every four public sector banks is head-less

BL :HYDERABAD, OCTOBER 26:2014

Corporate loan recovery, business hit

:  

Even as the buzz about the rising bad loans of public sector banks gets louder, about one-fourth of these banks remain head-less.

Of the 20 public sector banks (PSBs) excluding the SBI group, six are functioning without a Chairman and Managing Director. They are Bank of Baroda, Canara Bank, Indian Overseas Bank, Oriental Bank of Commerce, Syndicate Bank and United Bank of India.

Further, many Executive Director positions, second in the bank management hierarchy, are also vacant in several banks.

One of the key reasons for the delay in filling up the top slot is the delay caused by the long-drawn general elections before formation of the new government, according to sources in the Ministry of Finance. The Government has a say in the appointment of the chiefs of PSBs.

A panel led by the RBI Governor Raghuram Rajan interviewed 19 Executive Directors of public sector banks in October last year for six CMD positions that would fall vacant between August 2014 and March 2015.

However, the appointment of the new chiefs is likely to be delayed further as the Centre is yet to receive vigilance clearance on the names shortlisted for the posts. CVC clearance takes a couple of months and new appointees will take a month to settle down in their jobs.

Business hit

An Executive Director at a leading public sector bank said the banking industry “cannot afford any delay in appointment of top guns in the context of increasing non-performing assets (NPAs), especially from the corporate sector”.

“I understand that many recovery decisions, including attachment and auctioning of properties of corporates under the Sarfaesi Act, are pending due to political pressure. Nobody wants to take any risk and all are waiting for the Number One to take a call,” he said.

The Bank Employees Federation of India (BEFI) had recently released a list of 1,129 ‘wilful’ corporate defaulters whose loan dues aggregate to about ₹54,000 crore. Companies in the list had defaulted on loans of over ₹10 crore. During the year ended 2013-14, provisioning for non-performing assets accounted for ₹63,591 crore, of a total operating profit of ₹1,27,965 crore.

According to BEFI, most of these defaulting companies were being run by politicians, while bureaucrats and other influential persons were blocking the recovery.

CBI fear

The reported talk of CBI keeping a watch on the movements of CMDs of PSU banks is also having an impact on the decision making process at the top level, feel top bankers.

It may be recalled that SK Jain, the CMD of Syndicate Bank, was arrested by the CBI on graft charges a couple of months ago.

Another quarter of slow decision making at the top will have an adverse effect on the performance of the banks.

This, in turn, can impact the growth of the banking industry in particular and economic growth in general, say industry watchers.

New-look RBI : New challenges

Last week, the Reserve Bank of India announced reshuffling of portfolios of its four deputy governors, close on the heels of creation of two new positions for executive directors, and appointment of three (one against an existing vacancy). Photo: Pradeep Gaur/Mint

The Reserve Bank of India is restructuring itself without the distracting noise of newspaper headlines

When a conglomerate embarks on a restructuring exercise, it’s big news for business newspapers. A central bank doing so doesn’t attract much attention as it has no bearing on its fight against inflation or, say, foreign exchange management. Taking advantage of that, the Reserve Bank of India (RBI) is restructuring itself without the distracting noise of newspaper headlines.

Last week, it announced reshuffling of the portfolios of its four deputy governors, close on the heels of creation of two new positions for executive directors, and appointment of three (one against an existing vacancy). The highlight of the latest development is breaking down the silos and merging all critical operations. For instance, different executives currently look after regulation of commercial banks, cooperative banks and non-banking financial companies. Now, a single person will oversee regulation across segments.

A few years back, the interior of RBI central office on Mint Road in Mumbai was overhauled with a glass and leather finish. Now, governor Raghuram Rajan is restructuring the entire organization. Indeed, there have been tweaks in the past. For instance, the financial stability unit was carved out of the monetary policy department. The financial markets department was also created in the same way, but there has been no full scale restructuring. It needs to do that for a couple of reasons

. The RBI—an institution with a bloated bureaucracy—must reposition itself to meet the needs of the changing times. It is about to give licences to new sets of banks like payments banks and small banks and put the licence of full-service banks on tap. Unless it hones its own skills and develops expertise, it will not be easy to manage. If RBI doesn’t change itself, changes will be thrust upon it.

 The report of the Financial Sector Legislative Reforms Commission, or FSLRC, spoke about taking away foreign exchange management, debt management and money market operations from RBI and leaving it with only monetary policy and regulations. It is debatable how a central bank manages its monetary policy without a say on the exchange rate policy. Even for regulations, the FSLRC recommendation is that RBI should deal with only banking regulations and all other things related to non-banks should be separated.

The Indian central bank is reorganizing its 36-odd activities in four clusters or verticals. They are regulation, supervision, financial markets, and monetary policy and research. Deputy governor R. Gandhi will oversee regulation and risk management while S.S. Mundra will look after supervision and inclusion;Urjit Patel will look after monetary policy and research, and H.R. Khanfinancial markets and infrastructure. 

As and when RBI gets the government nod for a chief operating officer, or COO, there will be another round of reshuffle to have five clusters to streamline its operations. These clusters will be looked after by four deputy governors and the COO and 10 executive directors below them. Till recently, RBI had eight executive directors.

Appointments of executive directors are no big deal and done internally but RBI cannot just bring in a fifth deputy governor as the law has a provision for only four such posts. To skirt this, RBI wants to create a new position of COO who will, for all practical purposes, work as the fifth deputy governor. Globally, there are precedents for COOs at central banks. Both Bank of England and South African Reserve Bank have done so as their respective Acts do not have provision for a fifth deputy governor.

As part of the new dispensation, the entire appraisal policy will undergo a change and the focus will be on skill development. The restructuring plan does not envisage any retrenchment but what the employees may face is redeployment—if one is found not suitable for a particular job, one can be shifted to another department. Incidentally, the RBI has 17,334 employees on its payroll but only 3,281 are executives belonging to grade B and above. There are close to 4,500 grade A officers. These and a few treasurers constitute the officers of RBI—some 7,801.

There are 3,738 clerks and rest of them—5,795—are subordinate staff engaged in maintenance and other services. Clearly, the employee roll is skewed in favour of subordinate staff and clerks and this must change. Automation will render some of them redundant. Mumbai apart, Kolkata, New Delhi, Chennai, Bangalore and Ahmedabad—out of the 29 regional offices of RBI—have a sizable number of employees. I wonder what they do. Still, retrenchment is highly unlikely as RBI’s employee strength will come down to around 14,000 in the next three years in the natural course with many employees retiring. If they are smart, the employees should grab this opportunity with both hands to upgrade their skills.

RBI is governed by an Act put in place in March 1934, 13 years before independence, when the world was still under the shadow of the Great Depression. In fact, the preamble of the Act said, “…it is expedient to make temporary provision on the basis of the existing monetary system, and to leave the question of the monetary standard best suited to India to be considered when the international monetary position has become sufficiently clear and stable to make it possible to frame permanent measures.” It also said: “in the present disorganisation of the monetary systems of the world, it is not possible to determine what will be suitable as a permanent basis for the Indian monetary system.”

Eighty years have passed since RBI was created but we haven’t got time to consider a monetary standard suitable for the Indian economy. The government seems to have woken up to this and we may soon have a modern monetary policy framework to meet the challenge of an increasingly complex economy. A restructured organization will complement this.

Tamal Bandyopadhyay, consulting editor of Mint , is adviser to Bandhan Financial Services Pvt. Ltd , India’s newest bank in the making. He is also the author of Sahara: The Untold Story and A Bank for the Buck : Mint :28 Oct 2014