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Fintech committee recommends new legal framework for consumer protection

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The Steering Committee on fintech-related issues has also suggested cash flow-based financing for micro, small and medium enterprises A panel on issues related to financial technology (fintech), in its report submitted to Finance Minister Nirmala Sitharaman on Monday, has recommended a new legal framework for consumer protection. The framework encompasses fintech and digital services, a National Digital Land Records Mission, a unified database (stacks) for small industries and the agriculture sector, removing discriminatory regulatory barriers in digital payments infrastructure, and allowing non-banking financial companies (NBFCs) into agriculture credit. The Steering Committee on fintech-related issues has also suggested cash flow-based financing for micro, small and medium enterprises (MSMEs); using drones and remote sensing to assess risk in agriculture credit and insurance; increasing the use of artificial intelligence among state-owned banks; and regulatory and legislative changes …
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FPIs pulled out Rs 38,930 cr in FY19 due to weak market sentiments: Sebi

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According to Securities and Exchange Board of India annual report, eligibility norms for FPIs were relaxed and data privacy concerns of FPIs were addressed As macroeconomic headwinds weighed on investor sentiments through the year, foreign portfolio investors pulled out Rs 38,930 crore in 2018-19, according to market regulator Sebi's annual report. "In order to further develop the Indian securities market as an avenue for fundraising, eligibility norms for FPIs (Foreign Portfolio Investors) were relaxed and data privacy concerns of FPIs were addressed," the 2018-19 annual report said. Among other steps, the watchdog had withdrawn the minimum residual maturity restriction of three years for investment in government securities and state development loans. Besides, sub-categories under the category of corporate bonds were discontinued resulting in a single limit for FPI investment in all types of corporate bonds, as per the report. The limit for FPI investment in debt was rev…
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RBI board to meet today; likely to take up Bimal Jalan committee report

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The RBI board meeting on Monday to finalise its annual accounts, is also likely to take up the Bimal Jalan committee's recommendations on Economic Capital Framework (ECF) along with the dividend payment to the government, sources said. The committee had submitted its report to the RBI Governor on Friday. The report, which recommends transfer of surplus reserves to the government in a staggered manner over three-five years based on a predetermined formula, may be put on the Reserve Bank of India (RBI) website later for public access. The RBI follows a July-June financial year and the dividend is usually distributed in August after annual accounts are finalised. For FY20, the government has pegged a Rs 9,000 crore dividend from the RBI. Sources had earlier told IANS that the RBI may start transferring the first tranche of the surplus this calendar, based on the Jalan panel report. With economy facing a slowdown in key sectors, the government is looking at RBI dividends and surplus to…
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Trump looking at possible tax cuts, asset sale amid economic recession fear

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President Donald Trump said on Tuesday his administration was considering potential tax cuts on wages as well as profits from asset sales, and sought to play down market anxieties that the world's top economy could be heading for a recession. Speaking to reporters during a White House visit by Romanian President Klaus Iohannis, Trump said "we're looking at various tax reductions," adding that a "payroll tax is something that we think about." Recession fears were stoked last week when bond investors briefly demanded a higher interest rate on 2-year Treasury bonds than for 10-year Treasury bonds, a potential signal of lost faith in near-term economic growth. Trump dismissed fears of a slowdown, extolling low unemployment and a rising stock market over his tenure. "I think the word "recession" is a word that's inappropriate...We're very far from a recession," he said. The Washington Post reported a temporary payroll tax cut was unde…
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Sebi asks mutual funds to shift all investments to listed securities

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With an aim to safeguard mutual fund investors from high-risk assets, regulator Sebi wants fund houses to shift all their investments to listed or to-be-listed equity and debt securities in a phased manner and reduce their exposure to unrated debt instruments from 25 per cent to only 5 per cent. Exposure to risky debt securities has emerged as a major risk for the capital market investors, including those coming through the mutual fund space, and the regulator has been making efforts to enhance its regulatory safety net against such risks. Taking forward certain decisions approved by Sebi's board earlier in June, the regulator has now finalised the draft amendments to the prudential norms for mutual fund schemes for investment in debt and money market instruments. Besides, some further amendments have been proposed for approval of Sebi's board at its next meeting later this month, officials said. A key fresh proposal is to reduce the existing overall limit for investment of mu…
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RBI not done with easing, to cut rates in Oct and early next year: Poll

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The Reserve Bank of India (RBI) will cut interest rates again at its October meeting, making it the fifth in a row, according to economists in a Reuters poll who said the central bank's decision to ease by 35 basis points on Wednesday was right. While a survey taken ahead of August's meeting showed a 25 basis points rate cut was a done deal, the RBI was expected to keep rates unchanged for the rest of this year.  However, a more recent Reuters poll, conducted Aug 7-8, predicted the RBI would ease its benchmark lending rate by 25 basis points to 5.15% in October. If it does cut again as forecast it would be a repeat of a cutting spree last seen in 2000-01 After the expected October cut, the RBI is then forecast to ease by 15 basis points to a near decade low of 5.00% in the first quarter of next year, although much depends on global conditions. "India is amidst an economic and financial slowdown with minimal support from fiscal policy. The responsibility is being borne by …
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Income Tax dept relaxes assessment and scrutiny norms for start-ups

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The income tax (I-T) department has relaxed its assessment and scrutiny norms for start-ups. In a circular it directed its officers not to raise additional tax demands for start-ups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT). This will be done in cases where scrutiny is limited to Section 56 (2) (viib) of the Income Tax Act, or what is called in popular parlance angel tax. Angel tax refers to income tax payable on capital raised by unlisted firms by issuing shares where the share price is considered more than the fair market value. “No verification on such issues will be done by the AOs (assessing officers) during the proceedings and the contention of such recognised start-up companies on the issue will be summarily accepted,” the circular said. In cases where start-ups are recognised by the DPIIT but scrutiny involves wider issues, the I-T Department has asked its field formations not to pursue the issue of the angel tax during the assessment pr…
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