CA Online

 Private bank route for foreign portfolio investors may be non-starter Seems unlikely to elicit significant interest from investors after Sebi's decision to keep NRIs out The Securities and Exchange Board of India’s (Sebi’s) decision to disallow resident Indians, non-resident Indians (NRIs) and those under the Overseas Citizen of India (OCI) category from investing through private banks has put cold water on this route. Sebi, in a recent circular, says private banks may invest on behalf of clients. This was in line with a consultation paper issued last June and a significant departure from the earlier position that banks only be allowed to do proprietary trade. The relaxation was based on two conditions. One, that details of beneficial owners be provided when required by regulators. Two, no secrecy arrangement with the investors and all required legal arrangements that any secrecy law or confidentiality clause not impede disclosure of beneficial owner details, whenever requ...

SEBI plans new framework to check non-compliance of listing rules      The firms may be suspended for six months and subsequently, the process of compulsory delisting would be initiated   SEBI plans to put in place a stronger mechanism to check non-compliance of listing conditions, wherein exchanges will have powers to freeze promoter shareholding and even delist the shares of such defaulting companies. The proposal would be discussed at the board meeting of the Securities and Exchange Board of India (Sebi) this week, senior officials said. Under the proposed framework, exchanges would have the power to freeze the entire shareholding of the promoter and promoter group in non-compliant listed entity also holding in other securities, they added. It has been further proposed that if non-compliance persists, it would lead to suspension, revocation of trading and delisting of the shares of such listed entities. The proposed framework will put in place ...

Govt tries to soothe bond market jitters; to borrow Rs 2.88 trn in H1FY19 Borrowing in first half to be 47.5% of budgeted amount for 2018-19 Bond dealers were in for a surprise as the government on Monday moved to ease pressure on the market considerably by reducing the first-half borrowing programme to 47.5 per cent of the total budgeted borrowing, against the normal practice of borrowing 60-65 per cent. The Centre said it would borrow Rs 2.88 trillion in April-September 2018-19, against market expectation of Rs 3.3-3.6 trillion. The weekly borrowing size would also be Rs 120 billion, against the usual Rs 150-180 billion, a great relief for the markets. Economic Affairs Secretary Subhash Garg told reporters that the government would draw an additional Rs 250 billion from the National Small Savings Fund (NSSF) to finance the fiscal deficit for 2018-19. As against an earlier estimate of Rs 750 billion, now Rs 1 trillion will be drawn from the NSSF to finance the fiscal deficit. ...

High-level panel on IBC review may stick to 270-day resolution deadline A company's assets will be liquidated after 270 days A high-level panel set up to review the Insolvency and Bankruptcy Code (IBC) is likely to have recommended against extending a 270-day moratorium for restructuring a company after its case is admitted by the National Company Law Tribunal (NCLT). The committee submitted its report to the government on Monday There is a demand for relaxing the moratorium since the litigation initiated by various parties comes in the way of restructuring a company and delay the process. According to IBC norms, restructuring a company has to conclude within 180 days after an insolvency case is admitted by the NCLT. This deadline can be extended by 90 days, after which no more extensions are permitted. A company's assets will be liquidated after 270 days. Sources said the committee had recommended this deadline not be relaxed. The relevance of the IBC would cease to ...

 IMF may revise India's fiscal deficit upwards by 0.3% of GDP in WEO report The Union government has maintained that the bank recapitalisation will be cash-neutral on its finances The International Monetary Fund’s (IMF’s) upcoming World Economic Outlook (WEO) report may paint a less rosy picture of the government’s fiscal consolidation plan, with the ambitious public sector banks’ (PSBs’) recapitalisation exercise The Fund has written to the finance ministry that it might revise the fiscal deficit estimate upward by 0.3 percentage points of gross domestic product (GDP) in 2017-18, in the WEO report. The latter is due for issue next month “The India team is in touch with the authorities to gather all details of the recapitalisation bonds and still considering how to account for the operation in line with the IMF Government Finance Statistics Manual,” said Andreas Bauer, the Fund’s senior resident representative in India, in an emailed response. He added that dialogue with ...

 RBI to keep policy rates on hold, maintain neutral stance: Report The Reserve Bank is expected to keep policy rates on hold and maintain its neutral stance at the ensuing policy review meet early next month, says a Morgan Stanley report. According to the global financial services major, although India’s economic growth is on an uptrend, recovery remains in an early stage, and this warrants a neutral stance. “Considering the growth and inflation backdrop relative to the Monetary Policy Committee (MPC’s) assessment, we expect the MPC to remain on hold and maintain its neutral stance,” Morgan Stanley said in a research note. The central bank’s next monetary policy review is scheduled for April 5. It had kept the policy rate unchanged in its February meeting on fears of inflation. Headline CPI inflation print for January-February has averaged 4.8 per cent. This is slightly weaker than the RBI’s projection of 5.1 per cent for the March quarter this year.  The Business St...

Changing the Code: Boost for Home Buyers, MSMEs IBC panel: Allow MSME owners who aren’t wilful defaulters to bid, treat home buyers as creditors The Insolvency and Bankruptcy Code review panel called for sweeping changes in the law aimed at easing insolvency rules for small enterprises and providing relief to home buyers by treating them as financial creditors while deeming the amount raised from them for real estate projects as financial debt. The committee proposed that promoters of micro, small and medium enterprises (MSMEs) who are not wilful defaulters should be allowed to bid during the insolvency process, according to a copy of the report that ET has seen. If adopted, that would vastly improve the prospects of such companies being acquired and revived, thus saving jobs, instead of going into liquidation. In the past few weeks, ET has reported on several of the committee’s suggestions as included in the final report. MSMEs Bedrock of Economy The government plans to ge...

  Niti Aayog Panel Moots Jewellery Parks, Lower Import Duty on Gold A Niti Aayog panel suggested lowering of import duty on gold, setting up of jewellery parks to encourage local manufacturing, making mining viable and “financialisation” of the metal’s holding among steps to transform India’s gold market. The Economic Times, New Delhi, 27th March 2018

Finmin to Review Performances of State-run Insurance Companies The finance ministry will soon hold a performance review meeting of all state-run insurers, including LIC. The review of general insurance companies will also set the pace for consolidation The Economic Times, New Delhi, 27th March 2018

RERA Creates a Rs10k-cr Business for Cover Firms   TITLE INSURANCE for all projects was made compulsory for builders under the Realty Act   The Real Estate Regulatory Act (RERA) has made it compulsory for developers to get title insurance for all projects, opening a new segment of over Rs 10,000 crore for insurance companies.   Insurance companies have so far not covered land transactions and they say the reason for missing cover is unreliable land records, which can be challenged.   After the implementation of Rera, it is mandatory for developers to provide written affidavit to the buyer stating that the legal title to the land contains legitimate documents of ownership. This policy covers buyers of property against loss and settlement costs, litigation funds arising from problems in the land title discovered after purchase. HDFC Ergo and SBI General are working on launching title insurance policy.   “As per Rera, every builder will have t...