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Tight liquidity situation in the system pushes rates higher raising concerns over impact on growth Short-term borrowing rates have risen despite the Reserve Bank of ndia's sharper-than-expected rate cut in September, thanks to the tight liquidity conditions, raising concerns that this could act as a speed breaker for growth. Short-term rates are about 35-45 basis points higher than the benchmark repo rate of 6.75%. These include the inter-bank call money market, collateralised borrow ng and lending and treasury bills. The dif erential was 15-25 bps just a few weeks ago.A basis point is 0.01 percentage point. “The efficacy of monetary policy transmission is facing a challenge due to sustained tight banking system liquidity ,“ said Soumyajit Niyogi, senior interest rate strategist at SBI DFHI Primary Deal ers. “Continuous elevated short-term rates are driv ing corporate borrowing costs higher and providing downward rigidity to bank ing rate specific instru ments...That would ne...

Exporters are not impressed by the Centres' decision to increase duty drawback rates for merchandise exports of certain products. Terming the move a 'temporary measure', exporters have demanded the government should take more concrete measures to stem the fall in exports. Exports stood at $21.35 billion in October 2015 - a 17.53 per cent fall on a year-on-year basis. On Monday, the government had raised the duty drawback rates by two per cent for many sectors including engineering, marine and textiles. Besides, two weeks ago, the government had announced a revamped merchandise exports from India scheme (MEIS) for 110 additional products. Reacting to these developments, Ajay Sahai, director-general, Federation of Indian Exports Organisation, said more should have been done to lift exports. The drawback rates are reimbursement of certain customs and excise duties, and service tax on imports of input materials, which go into the manufacture of goods that are exported. ...

Taxman sends letters to new-age cos such as Foodpanda, Oyo Rooms and Airbnb to check if they are paying tax Aggregators such as Foodpanda, Oyo Rooms and Airbnb have been asked whether they are paying service tax. “Letters were sent to ascertain if these entities are registered with the department and paying due tax,“ said a department official. This seems to be part of a `friendlier' approach to alert service providers of their potential liability, in line with the Centre's desire for a non-adversarial tax regime that's more welcoming to investors. The official said most entities had registered them selves and some had sought fur ther clarifica tions on proceprocesses as the dures and processes as the provision dealing with this particular area is fairly new. While the rapidly expanding sharing economy offers vast potential for tax revenue, the task can be challenging as in some cases there is no brick-and-mortar presence for these firms. Foodpanda, which aggr...

You may soon not need an automatic teller machine (ATM) to withdraw money using a debit card. A retailer would be able to give you your money. Electronic processing platform Payworld has launched Payworld Cash Point — a service that would help a user withdraw cash from selected retail establishments. An authorised shopkeeper (say, a grocer or a pharmacist) would be able to use a Payworld app on his smartphone to swipe a user’s debit card. Up to Rs 2,000 can be withdrawn from an account using this facility. Payworld has tied up with State Bank of India to operate this. Payworld plans to install these cash-out facilities at all retail outlets under its coverage. It would provide the technology and hardware for the retailers. Payworld is targeting Tier-III & -IV cities and rural areas. Praveen Dhabhai, COO of Payworld, said: “Our initial plan is to launch the scheme with 500 retailers and gradually scale it up to over 5,000 by March 2016.” Business Standard, New Delhi, 18t...