Soon, draw cash from ATMs without a bank account

B L  February 13, 2014

“We have recently approved the in-principle setting up of a payment system which will facilitate the funds transfer from bank accountholders to those without accounts through ATMs. Essentially, the sender can have the money withdrawn from his account through an ATM transaction.

“The intermediary processes the payment, and sends a code to the recipient on his mobile that allows him to withdraw the money from any nearby bank’s ATM,” said Rajan.

The system will put in place necessary safeguards, including customer identification, transaction validation, and velocity checks. Currently, only bank accountholders can withdraw cash from an ATM.

According to the RBI chief, “Cashing out is very important for remittances because we have a large recipient population in the country most of whom do not have formal access to financial services. They do not have a bank account.”

“The point is that this system is efficient, fast and reaches people… We need more such innovative products, some of which mobile companies are providing,” Rajan added.

Payments Bank

The Governor also said the feasibility of a standalone payments bank, one of the banking structures envisaged by the Nachiket Mor committee, will be examined by the RBI. However, at this point, there is no decision (made) to move forward, he added.

Black money will remain untouched

Gautam Nayak  Live Mint 12 Feb 2014

The recent decision of the Reserve Bank of India (RBI) to phase out certain old currency notes seems to have created some fear in the market as to whether this was a method of unearthing black money, according to newspaper reports. Some reports referred to money moving into immovable properties, gold, etc., as a reaction to RBI’s decision. Are these fears justified and what are the provisions of tax laws relating to unexplained cash found in one’s possession?

The tax law provides that if a person is found to be the owner of any money, bullion, jewellery or other valuable article in a particular year, the amount or asset should either be recorded in her books of account, or she should be in a position to explain the nature and source of its acquisition. If it is not recorded in the books of account and the person is not able to explain in a satisfactory manner as to how she acquired the money or asset, the value of the money or asset can be treated as her taxable income.

This would mean that such an amount would get added to her regular income as undisclosed income. However, income tax would have to be paid on such undisclosed income at a flat rate of 30%, irrespective of whether the person has any other taxable income or not. No deduction for any expenditure would be allowable to the person concerned against such undisclosed income, nor can she set off any losses against it. Therefore, in effect, 30.90% of such an amount or the value of such an asset would end up being paid as income tax.

Would the RBI move result in taxation of such undisclosed cash? If one looks at the RBI announcement, it is clear that the old currency notes can be exchanged for new ones at any bank branch from April to June 2014 without any questions being asked as to the name of the person giving the notes, her Permanent Account Number (PAN), address, etc. One can exchange the notes even at branches where one does not have a bank account. It is only after 30 June that one would have to give the name and PAN to exchange high denomination currency notes. Therefore, any person having undisclosed cash in her possession can easily exchange the old currency notes till June 2014 without disclosing her identity. Therefore, there is no risk till then of such amounts being taxed.

It is only after June that such an exchange would not be permitted without disclosure of identity. It is obvious that any person seeking to exchange old high denomination currency notes for new at this stage, runs the risk of such amounts being taxed as her undisclosed income, unless she is in a position to prove either that the cash is recorded in her books of account or prove from where she acquired it.

What could be the possible reason for this cut-off date of June 2014? The obvious answer that comes to mind is the fact that elections are being held in April and May, and it is a well-known fact that elections in India involve utilization of a large component of black money. Obviously, politicians would have been severely handicapped in their election campaigning had the cut-off date been prior to the elections.

Is such withdrawal of currency notes the best way of tackling the problem of black money? One needs to understand that the greater part of black money is not sitting idle in the form of cash, but is often deployed in productive assets. Even a holder of black money would not like to forego the income that she could earn on such an amount. Therefore, a significant part of such undisclosed wealth is in the form of assets. These include undervalued real estate, undisclosed gold or jewellery, undisclosed foreign assets held abroad, assets and businesses held in names of close relatives and others, etc. This component of black money would not get affected by the withdrawal of old currency notes or high denomination currency notes.

One already notices that there is a significant change in approach of most of the younger generation, which prefers to pay its legitimate taxes rather than go through the hassle and risk of black money. Black money flourished during the era of high taxes, which prevailed in the 1970s and 1980s. Old habits die hard, and even with the reduced reasonable income tax rates, some taxpayers continue to avoid disclosing their true incomes.

What is now needed is a carrot and stick approach. There is definitely the need for a multi-pronged effort in the form of intelligence gathering and follow up on various leads in a systematic manner, to unearth such undisclosed income and assets, besides a crack down on corruption, one of the major reasons for generation of black money. Such efforts need to be accompanied by rational and stable tax policies, which make tax payment easier and less onerous than the risk involved in not disclosing income and assets. 

Rajagopal, MP who used pepper spray in LS, is also founder of loss-making Lanco Group

First Biz :13 Feb 2014

Vijayawada MP L Rajagopalan, who used pepper spray on his fellow MPs in Lok Sabha today after the Congress-led UPA government tabled the Telangana Bill in Parliament, is also the founder and former chairman of loss-making Lanco Infratech.

This morning, after Shinde tabled the Telangana Bill in Parliament, L Rajagopal, Congress MP from the Seemandhra region, reportedly whipped out a canister of spray and sprayed it inside the Lok Sabha in order to protest against the creation of a new state.

The spray resulted in many of the MPs coughing and television visuals showed Speaker Meira Kumar coughing before quickly leaving the Lower House of Parliament. Other MPs complained of irritation in their eyes and difficulty in breathing.

Opposition MPs were seen looking on in shock and amusement even as marshals restrained Rajagopal and proceedings were adjourned.

Speaking to CNN-IBN before Parliamentary proceedings, L Rajagopal said he would not allow the bill to be passed and when asked how he would stop the bill he said, "You will have to wait and see."

The Lok Sabha proceedings were adjourned even as medical staff were called into action to treat the affected MPs. Three MPs were taken in an ambulance from Parliament, reported CNN-IBN, adding that the nature of their injuries wasn't known.

High security measures were in place ahead of today's proceedings as some MPs had even suggested they could attempt suicide to protest against the creation of the new state. However, MPs cannot be body searched before they enter Parliament.

Rajagopal was yesterday expelled from the Congress - along with five other MPs - for opposing creation of Telangana and giving notice of no-confidence motion against the government. These MPs from the Seemandhra region, the residuary state after Telangana is carved out of Andhra Pradesh, had been disrupting the House protesting the bill since the second half of the winter session started on 5 February.

The Vijayawada MP had been openly against the formation of Telangana, and has been protesting against it for the past few years. He had criticised the party high command for not heeding the views of Seemandhra leaders on the bifurcation of Andhra Pradesh, but said he had advised Chief Minister N Kiran Kumar Reddy not to quit until the Parliament session ended.

A few years ago, Rajagopal was one of the first leaders to take up the flagship of the anti-Telangana movement. After  P Chidambaram's announcement that the Centre was initiating the process for the formation of Telangana state, Rajagopal was the first MP to send in his resignation.

Here is all you need to know about Rajagopal's Constituency

Vijayawada is the third largest city in Andhra Pradesh  and is located on the banks of the majestic Krishna River, and is surrounded by the lndrakiladri hills on the West and the Budameru river on the North. The city forms a part of the Krishna district, and is spread over an area of 58 sq kms (urban area), with a population of 8,25,436 (2001 census).

Rajagopal calls Vijayawada his 'Dharma bhoomi'. Educated in Siddhartha engineering college in Vijayawada, Rajagopal has strong links to the city. And With the establishment of Lanco Kondapalli power plant in Kondapalli, his association with the city grew even closer.

As chairman of Lanco's charitable trust, LIGHT, Rajagopal undertook several initiatives in and around Vijayawada

Rajagopal founded Lanco Infratech in 1986 and remained its chairman until he joined active politics in 2002. His brother Madhusudhan Rao took over as chairman. The company is engaged in construction, power, real estate, and several other segments.

Its key businesses have been frequently kicked up controversies.

In 2007, Managing Director GV Babu was caught at an airport with a suitcase containing Rs 34 lakh unaccounted cash.

Lanco Infratech also ran ran into financial trouble and filed for corporate debt restructuring in 2013. The company has more than Rs 7,000 crore debt. In October-December, the company's loss widened to Rs 529.68 crore from Rs 465 crore a year ago.

Powerful Quotes of Steve Jobs : What s Your Excuse ?

The Spirit of Warren Buffett :"Things you like to do should be a hobby of yours. But things the world does should Be a business of yours,"

Quotes :

"Things you like to do should be a hobby of yours.
But things the world does should
Be a business of yours,"

The Times of  Warren Buffett :
As a billionaire

Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share. In 1998, in an unusual move, he acquired General Re (Gen Re) for stock.

 In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providingreinsurance. On March 15, 2005, AIG's board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism from Eliot Spitzer, former attorney general of the state of New York.

 On February 9, 2006, AIG and the New York State Attorney General's office agreed to a settlement in which AIG would pay a fine of $1.6 billion.In 2010, the federal government settled with Berkshire Hathaway for $92 million in return for the firm avoiding prosecution in an AIG fraud scheme, and undergoing 'corporate governance concessions'.

In 2002, Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies.

 By April 2006, his total gain on these contracts was over $2 billion. In 2006, Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006.

 The largest contribution would go to the Bill and Melinda Gates Foundation. In 2007, in a letter to shareholders, Buffett announced that he was looking for a younger successor, or perhaps successors, to run his investment business.

 Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

Books on Warren Buffett :

Author :Louann Lofton

Author and former editor-in-chief at The Motley Fool, Louann Lofton remembers her early experiences with money, which left an indelible mark on her life and her choice of a future career.  Those experiences played an integral role in deciding to pen her new book “Warren Buffett Invests Like a Girl, and Why You Should Too.”