Reserve Bank of India (RBI) Deputy Governor S.S. Mundra said the latest April-June earnings from state-owned lenders showed "stability" in terms of non-performing assets (NPAs), but added the central bank would remain "watchful." India's banking sector, dominated by more than two-dozen state-run lenders, has been hobbled by its highest bad-loan ratio in a decade as slower economic expansion hurt companies' abilities to service debt. "I think the results which have come, on the NPA front, there looks like some kind of stability now," Mundra told Reuters on the sidelines of a conference on Wednesday. "It is not back to the absolutely normal position," he added. "It would need a constant watch from us."(PTI)
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Punjab National Bank (PNB), India's fourth-largest state lender by assets, could take control of some of the country's most heavily indebted steel companies and sell them on as part of a restructuring backed by New Delhi, bank officials said. PNB, a quarter of whose nearly $4 billion portfolio of steel loans is stressed, is considering taking charge of some companies over the next two years, changing their management and then selling stakes, Executive Director K.V. Brahmaji Rao said. The bank is also talking to its lending partners about carrying out debt-for-equity swaps, which would dilute the stakes of existing shareholders and give creditors majority ownership, but nothing has been finalised. "We are getting feelers from some local investors who are interested to buy stakes in these companies," Rao told Reuters on Tuesday, declining to name the borrowers or the interested parties. The issue has a broad significance in India, since banks, fearing more loans could go sour, have slowed financing to roads, ports and mining projects, strangling Prime Minister Narendra Modi's efforts to revive the economy. Total bad loans held by all banks are estimated to be at a decade-high of $49 billion. PNB, fellow government-controlled State Bank of India and other lenders are saddled with stressed loans of about $23 billion to the steel industry, which is struggling with weak prices and surging imports from an oversupplied China. Among steel companies, debt-heavy Electrosteel Steels Ltd said on Monday its lenders would restructure its loans, while Bhushan Steel is another big borrower. Nittin Johari, finance head of Bhushan Steel which recently restructured its $5 billion debt, said he was not aware of any plans by lenders to seek control of any company. The finance ministry is considering a rescue package for steel companies, including hiking India's 10 percent import duty and injecting funds into companies deemed viable, a senior ministry source said. A senior steel ministry official said raising the import duty was a priority. (Reuters)
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Three of India's leading state-run lenders reported a drop in their first quarter net profits, weighed down by rise in provision for bad loans and cooling expectations of a turnaround in the country's dominant but ailing government banking sector. India's banking sector, dominated by more than two-dozen state-run lenders, has been hobbled by its highest bad-loan ratio in a decade as slower economic expansion hurt companies' abilities to service debt. While the pace of additions to bad loans has started slowing for most banks, higher provisioning is hurting their profits. State-run lenders also account for a majority of the sector's bad loans. Bank of India Ltd, the nation's third-biggest state-run bank by assets, saw its profit for the three months to June plunge 84 per cent from a year earlier, while its bad loans ratio jumped to a 13-year high of 6.8 per cent. The Mumbai-based lender is stepping up bad loan recovery efforts and aims to keep its bad loan ratio for the full fiscal year to March 2016 at lower levels than 5.39 per cent for the last fiscal year, chief executive B P Sharma told reporters. "We have deployed majority of our resources to focus on recovery and merit-based upgradation of stressed account," he said, adding the bank will be "a little bit stringent on taking exposure on risky accounts". Bank of India's gross bad loan ratio of 6.8 per cent as of end-June was the highest since 2002, he said. The bank's shares ended 5.7 per cent lower to their lowest close since September 2013 in a Mumbai market that fell 0.3 per cent. "A turnaround will take some time. And it will depend on the overall industrial recovery in the country ," said R K Gupta, managing director at Taurus Asset Management. However, he said that he would be a buyer of shares in state lenders, which trade at a steep discount to their private-sector rivals. Punjab National Bank, the fourth-biggest state-run lender by assets, said its quarterly profit almost halved to Rs 721 crore. Its shares rose 5 per cent as its bad loans ratio fell from the previous three months, although it was still higher than a year earlier. Union Bank of India, the sixth-biggest state-run lender by assets, saw its first-quarter net profit falling 22 per cent to Rs 519 crore, which was ahead of analysts' estimate of Rs 499 crore. Its gross bad-loan ratio increased to 5.53 per cent in June quarter. The second-biggest state-run lender, Bank of Baroda, and the biggest private-sector lender, ICICI Bank, are due to report first-quarter earnings this week. The market leader, State Bank of India, reports earnings in August.(Reuters)
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The year ending March, 2015 saw premium collections falling for the industry but the private players held ground, while LIC showed downturn in every department, reports Sunil Dhawan The life insurance sector witnessed a slowdown in every department in 2015. The 31st March figures for 2015 compared with those in the previous year shows a decline in total premium collection in both single and non-single (regular premium) policies under both individual and group insurance categories. Industry figures: While the total first year premium (FYP) collection has fallen by about 6 per cent, it's the regular premium collection that has fallen the most at around 11 per cent for the entire industry. As against clocking nearly Rs 1, 20,000 crore in 2014, the industry saw FYP of nearly Rs 1, 13,000 crore by 31st march, 2015.The picture however is not so bleak for the private sector players as compared to the state-owned, Life Insurance Corporation of India and the India's largest insurer so far in terms of almost all major parameters. Comparative: Private players business saw a growth of nearly 18 per cent by underwriting nearly Rs 35,000 crore as against Rs 29,000 crore near-about in the previous year. LIC's business on the other hand saw a decline and clocked nearly Rs 78, 000 crore as against around Rs 90,000 crore in previous year, a fall of nearly 13 per cent.
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Subhash Lakhotia In the recent past, salaried employees have shown keen interest in taking advantage of the tax provisions by making investment in the residential house property. It is a very well known fact that if salaried employees like other tax payers were to construct a residential house property or were to buy a residential house property by taking loan, then he would enjoy a special deduction in respect of interest on loan to the maximum extent of Rs 2,00,000 per annum. Now comes the next very important question and i.e. how to claim deduction from the employer itself in respect of the interest which is paid or which is payable in respect of self-occupied residential property. Well, under the provisions of the Income-tax Act, 1961, it is possible for the employer to grant deduction to the employee in respect of the loss by way of interest in respect of the property so purchased by the employee. The biggest advantage of this deduction is that the Interest so payable in respect of the housing loan is deducted by the employer from the salary income of the employee. Thus, without going to the tax department the employee is able enjoy tax concession or tax benefit In respect of interest payment on the housing loan direct from the hands of the employer. Well to enjoy this big bonus benefit of gaining the deduction right from the employer in respect of interest on the housing loan there are certain obligations which are cast on the employee. The employee should very carefully understand these obligations and comply with the formalities as are required by the law and thereafter submit necessary papers and details concerning the interest on loan to the employer. It may please be noted that if these formalities are not complied with and if the details pertaining to the interest on housing loan etc. is not provided to the employer In that event the employer will not be under any obligation to grant deduction in respect of the interest on the housing loan for self-occupied property. It is also worthwhile to note that if due to non-submission of the papers from the end of the employee if the employer does not grant deduction in respect of the interest on the housing loan to the employee than the employer will be deducting the income-tax on the gross total salary income without giving any benefit or deduction or rebate in respect of the interest on the housing loan. If the employer does not grant necessary deduction in respect of the housing loan due to non-submission of the papers or details etc. by the employee to the employer, in that event, the employee will have no option except to proceed for claiming the deduction by filing the Income-tax Return. Although it is possible to claim the deduction even at the time of filing the return but that would be not a good investment decision because the tax had already been deducted at source on the salary income by the employer without the deduction being granted in respect of the housing loan interest.Now, let us see very briefly as to how to go about so as to claim a deduction right from the employer in respect of interest on the housing loan on account of capital borrowed tor residential property. To claim this deduction of interest in the first phase please do remember that you take loan for housing after 1“ April, 1999, and this loan can be from any person or organization and that the loan should be for constructing or acquiring the residential house and the construction or acquisition of such residential unit out of such loan amount has to be completed within three years from the end of the financial year in which the capital is borrowed. Further please do remember that the most important point to claim the deduction in respect of the interest on housing loan upto Rs 2,00,000 would be that the employee has to furnish before the DDO a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of principal and interest of the loan so repaid. The author, Subhash Lakhotia, is Tax and Investment Consultant at New Delhi for the last over 45 years. E Mail:lakhotia49@gmail.com
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Bank of Bhutan has selected TCS BaNCS for its Core Banking Solution to power its next generation banking services.TCS has an enviable track record of fail-proof core banking implementations across the globe which in turn, mitigates our core banking transformation risk. Its ability to reduce time to market for new bank offerings and to seamlessly integrate with third-party systems gives us the assurance that we have chosen the right partner, compant said in a press statement.Pema Nadik, Chief Executive Officer of the Bank of Bhutan, said, “TCS BaNCS will help us transform our technology ecosystem in keeping with our plans for quick growth and expansion.”Bank of Bhutan is the largest commercial bank in the Kingdom of Bhutan with a network of 46 branches, including extension branches, 62 ATMs, a state-of-the-art mobile banking solution and a dedicated Contact Center, fulfilling the banking needs of the public, business community and the Royal Government of Bhutan. Bank of Bhutan is at present on the Oracle FLEXCUBE CBS platform, having implemented it in the year 2009. With a focused goal of moving onto a high-growth trajectory, the Bank has embarked on a project of upgrading its core banking system and has selected TCS BaNCS as the solution partner for this engagement and to replace the existing system, after an in-depth evaluation of shortlisted vendors from a broad array of leading IT software providers.(BW Online Bureau)
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Punjab National Bank, India's fourth-biggest state-run lender by assets, reported on Tuesday a 49 percent drop in quarterly profit as provisions nearly doubled. The stock, however, jumped as much 6.7 percent as the bank's bad loan ratio fell marginally in the three months to June, compared with the previous quarter. Net profit fell to 7.21 billion rupees ($112.61 million) for its fiscal first quarter to June 30, from 14.05 billion rupees reported a year earlier, the New Delhi-based lender said. Analysts on average had expected a net profit of 9 billion rupees, according to data compiled by Thomson Reuters. Gross bad loans as a percentage of total loans fell slightly to 6.47 percent in the June quarter from 6.55 percent in the previous three months, but were higher than 5.48 percent a year earlier. Provisions, including for bad loans, nearly doubled from a year earlier to 18.11 billion rupees.
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No matter how much technicalities are involved, filing of income tax returns online has emerged as a better option and has started picking up pace owing to the dawn of numerous e-return filing websites as intermediaries, writes Vikram RamchandAs soon as we head towards the year end, banks, chartered accountants and e-returns intermediaries (ERIs) start reminding us of filing taxes online. All of a sudden, we get to witness an increasing number of taxpayers flocking to file their e-returns because of the convenience it offers. However, it is not just a matter of convenience here.With a motive to ease the taxpayers' compliance norms, the Income Tax department introduced the e-filing of I-T returns, which was gradually made mandatory by the Central Board of Direct Taxes for individuals earning over Rs five lakhs per annum from the assessment year 2013-14 onwards. Additionally, those who e-file get the advantage of receiving their tax refunds earlier than the others. The standardized price for this service, when compared to the different prices charged by chartered accountants, makes it the most preferred way of filing returns. In spite of all these benefits, however, many of us are still skeptical and feel hesitant about e-filing our IT returns fearing it might get rejected. This reluctance usually stems from the fact that the concept is still quite novel in the Indian context.Many taxpayers avoid e-filing solely based on the fear that they may commit a mistake in their tax return for which they might get penalised heavily. The Income Tax department can reject your income tax return for a wide range of reasons, but don't let this intimidate you. It means a taxpayer would need to figure out what went wrong and try again. There are certain guidelines laid down by the income tax department. If a taxpayer abides by these guidelines and follows the tips, they would be able to avoid unnecessary e-file rejections:1. If taxpayers have an outstanding tax liability, make sure they pay it and enter the details of the self-assessment tax in their income tax return before submitting the tax return.2. Printing the ITR V form correctly is an important step. To make sure that the print quality of the paper on which ITR-V acknowledgement is good and clear, avoid using the dot matrix printer if you want your return to be processed faster. This is because the bar code on the ITR V should be clearly visible for quicker processing, and only using the ink jet or laser printers can do this.3. Don't forget to sign the ITR-V before sending it to the CPC in Bangalore. The signature must be clear and legible. Also, if you are taking photocopies, make sure you send out an original one signed in blue ink. As per the guidelines issued by the Income Tax Department, the ITR V should carry the signature in ink and should not be a photocopy of the signature.4. Don't send the ITR-V in any other mode other than Ordinary or Speed post.5. For a taxpayer, it is necessary to make sure that he/she is sending a signed copy of their ITR-V acknowledgement within 120 days from the date of filing the income tax return.6. First, check the Permanent Account Number (PAN) given in the Income Tax Return Verification (ITR-V) form. A wrong PAN number would mean your return shows in someone else's name.7. Reconciliation with Form 26AS is very critical as TDS details are the lifeline of a taxpayer's income tax return. Any mismatch in the details provided in Income Tax Return and Form 26AS may invite notice from the income tax department or lead to the refund getting rejected.8. If taxpayers have a loss under the head "Profits and Gains from Business and Profession", they cannot file income tax returns without getting their books of accounts audited by a practicing Chartered Accountant.No matter how much technicalities are involved, filing of income tax returns online has emerged as a better option and has started picking up pace owing to the dawn of numerous e-return filing websites as intermediaries. Blame it all on the existence of improper planning and ignorance of the guidelines that acts as a hurdle in this otherwise hassle-free and effortless procedure of filing tax returns. Undoubtedly, there is nothing more convenient than filing returns electronically. To be on the safer side, besides adhering to these tips, don't forget to mark the calendar on 31st August to file your Income Tax before this date because as a responsible citizen, paying our taxes & filing Income Tax Return on time must top our priority list during every assessment year.The author is co-founder & CIO, Makemyreturns.com
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