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If Bengaluru police intelligence wing has its way, then new recruits of startups and IT firms will need to undergo a compulsory background check from the police.This, police believe, is necessary to keep a check on terrorist activities. Apparently, the Ministry of Home Affairs through the Intelligence Bureau (IB) has told Karnataka Police that some engineers with a terrorism-linked past have infiltrated into Bengaluru's IT industry. “We plan to send a proposal to Police Commissioner and the DGP requesting them to issue a circular to all startups and IT companies in Bengaluru. We'll need to check their recruitment lists to do a background verification for new employees,“ DCP (Intelligence) Maheshwarappa S told ET. As of now, such verification is mandatory only for cab drivers and school staffers. In the calendar year up to Sep 21, the city police received only 13,824 applications for verification from the private sector, and the police are not happy about the number. Cit...

The Securities and Exchange Board of India ( Sebi) on Tuesday exempted the Centre from the takeover code obligations for its investment in Dena Bank, Bank of India and Corporation Bank. The Central government plans to infuse Rs.407 crore in Dena Bank, Rs.2,455 crore in Bank of India and Rs.857 crore in Corporation Bank. The infusion of capital, part of the government’s ‘Indradhanush’ initiative, would have triggered an open offer as the government’s stake in these banks would have increased by more than five per cent. In Dena Bank, the government’s stake is likely to increase 5.25 per cent - from 59.75 per cent to 65 per cent. In Bank of India, the government’s shareholding might raise from 64.43 per cent to 70.13 cent - an increase of 5.7 per cent. For Corporation Bank, the stake increase could be 5.78 per cent to 69.11 per cent. According to Sebi norms, when entities that hold 25 per cent or more equity in a company acquire an additional five per cent or more, they have to ma...

Seek relaxation of order restricting Aadhaar usage in PDS and LPG subsidies The Securities Exchange Board of India ( Sebi) and the Reserve Bank of India ( RBI) on Tuesday moved the Supreme Court for modification of the apex court’s order on Aadhaar, issued in August. The two regulators sought relaxation of the order, which stated the unique identity card should not be insisted upon except for public distribution scheme ( PDS) items such as food and kerosene, and for subsidised liquefied natural gas ( LPG). Considering a large number of similar applications, including that of the Centre and the governments of Gujarat and Jharkhand, the court set the hearing of the matter on October 6. According to Sebi, Aadhaar is useful in various ways for the development of the securities market. It works as a an easy and simplified mode of completion of know- your- client (KYC) requirement, while onboarding a client by any registered intermediary in terms of prevention of money laundering nor...

The Securities and Exchange Board of India, which took charge of regulating the commodities derivatives market on Monday , said it is open to allowing foreign portfolio investors to trade in this segment. The capital market regulator also wants to introduce options trading in commodities. “There is no reason why participants like banks and foreign portfolio investors that are not allowed today should not be allowed,“ said Sebi chairman UK Sinha at an event in Mumbai to mark the merger of Forwards Market Commission(FMC) -India's commodity market regulator-with Sebi that was attended by finance minister Arun Jaitley . “There is no reason why options trading should not be allowed in commodity derivatives market“. Sinha declined to comment on when Sebi planned to allow foreigners to trade in commodities derivatives on local bourses. “I would like to mention that our immediate priority will be to take stock of the and ensure that there is trust in the market about the way regulato...

The government plans to impose heavy penalty on importers dealing in mobile phones, electronic items and garments who are evading valueadded tax (VAT). An analysis of 1,000 importers has shown a mismatch between information provided by the Customs department and VAT returns filed by the traders. A senior official said these importers had a turnover of Rs.2,000-5,000 crore. A number of dealers have been issued notices to furnish details of their returns. The trade and taxes department entered into an agreement with Customs to share details of such traders. “A number of importers in Delhi import goods from a number of countries and to evade tax they don’t file returns. Those who do so don’t mention the volume of goods they have imported in order to evade tax. We have entered into an agreement with the customs department to share information. They provided us details of the top 1,000 importers and we are scrutinising their records,” said a senior Delhi government official. The o...

Round tripping, changing shell company names, becoming NRIs are favourite methods to avoid declaring the cash The promoter of a Delhi-based, mid-sized, listed company has a Rs.700-crore problem. The cash is in various overseas accounts but the businessman has no plans of declare it before the black money deadline of September 30. Instead, he plans to invest it in the Indian capital markets by opening new intermediary or shell companies in the coming year or so. He's not alone. Many promoters of listed companies are working overtime with chartered accountants to devise ways of utilising unaccounted funds. These include shutting old intermediary companies, starting new ones with fresh records, transferring funds to newer safe harbours and round-tripping funds into the Indian capital markets through participatory notes and even applying for non-resident Indian (NRI) status. “Despite government assurances, many promoters of listed firms fear that if they declare their unaccou...

The Insurance Regulatory and Development Authority of India ( Irdai) said for a public issue of shares by health, reinsurance and non- life insurers, they will consider the applicant company’s overall financial position, its regulatory record and its capital structure post issue, prior to giving approval. In its draft guidelines on issue of capital by non- life insurers, reinsurers and standalone health insurers, Irdai said it may direct an Indian insurance company transacting the non- life insurance business or standalone health insurance business or reinsurance business to go for public issue if the circumstance so warranted. The period for which the applicant company has been in the non- life insurance business or in standalone health insurance business or in reinsurance business, will also be taken into consideration. Its record of policyholder protection will also be looked into. Business Standard, New Delhi, 28th Sept. 2015

India must align domestic laws with international treaties A recent ruling of the Punjab & Haryana High Court ( HC) in the Serco BPO case has once again underlined the need for consistency between tax policies and the jurisprudence that evolves around it, thus, leaving little to interpretational hazards. The HC, while confirming the eligibility to capital gains tax exemption under the tax treaty, held that the shareholders (Barclays and Blackstone) were entitled to such a benefit on the basis of the tax residency certificate ( TRC) issued to them. The HC alluded to apex court’s observation in the Azadi Bachao Andolan case, and obitered that negotiation of treaties and composition thereof are sovereign functions, involving important aspects of tax policies, and should be left to executive’s discretion. The ruling should enthuse foreign investors, especially those who have held investments in Indian assets from their Mauritius investment holdings, since it reinforces sanctity o...

According To to the latest data available from the Reserve Bank, which is from May this year, there are 21.5 million credit cards operational in India. The total credit outstanding is Rs.32,400 crore. The average comes to about Rs.15,000 per card. That doesn’t sound like much, but there’s a catch in this data. The average outstanding is per card, not per person. There certainly aren’t 21.5 million distinct individuals in India who have credit cards because anecdotally, one knows that a lot of people who have credit cards have more than one, often more than two. It’s also clear anecdotally that excessive credit card usage is a widespread problem, especially among young people who have started earning recently. Of course, excessive borrowing is hardly a personal issue alone. From individuals to companies to governments, excessive borrowing, interest costs and the fear of how this will ever come under control seems to be the primary source of problems in the world economy. Even the mo...

The Delhi High Court has observed that if the central and state governments were not treating e-commerce sites such as Flipkart and Amazon as retailers for foreign direct investment (FDI), they cannot be treated as retailers for taxation purposes. Justice Rajiv Sahai Endlaw was of the “prima facie” view that if governments were treating transactions by e-commerce sites as retail sale for tax purposes, then how can they say these firms are not retailers for receiving FDI. “Prima facie, the Union of India/state governments cannot, on the one hand, for the purpose of tax, treat such sales as retail and on the other hand, for the purposes of investment, not treat the same as retail sale,” the court said. The observation by the court came while hearing a plea alleging that e-commerce sites are violating FDI policy by retailing goods through Internet. The court has also issued notices to the Centre, Delhi gover nment, Reserve Bank of India and the Enforcement Directorate, seeking t...

All eyes on governor Rajan, falling inflation could be silver lining Reserve Bank of India (RBI) governor Raghuram Rajan is widely expected to cut interest rates on Tuesday, a move thatat will bring down EMIs for home loan borrowers and help companies raise cheaper funds to aid expansion plans. Inflation rates in India are currently at historic lows. While wholesale price index (WPI) –based inflation fell 4.95% in August, compared to a 4.05% decline in the previous month ,h retail inflation rose 3.66%, slower than the 3.69% increase in July. The plunge in inflation rates has triggered hopes that Rajan would likely cut interest rates inn the monetary policy review onn September 29. The government has also made it more than obvious that it wants the RBI to cut rates, given the wider elbow room thee central bank enjoys from the cur-rrently “deflationary” trends inn the economy. Rajan has cut the repo rate— the rate at which banks borrow from the RBI — by 0.75 percent-tage points...