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Bankers look for speedy resolution of 28 accounts Bankers are looking to speed up the resolution of 28 accounts including Videocon Industries BSE -4.90 %, Jaiprakash AssociatesBSE -1.67 % and Uttam Galva Steel as a December 13 deadline looms. These companies are part of the Reserve Bank of India's second list of defaulters to be referred to bankruptcy proceedings for recovery of more than Rs 2 lakh crore. The accounts need to be restructured by December 13 or they'll end up in the National Company Law Tribunal (NCLT) for the next step in the insolvency process. At that point, banks will have to provide for losses of up to 50% of the loan value, hitting their earnings. Bankers said this worry may see the accounts of Jaiprakash Associates, Uttam Galva Steel, BILT and Jai Balaji getting recast by the deadline. Also, in cases such as Ruchi SoyaBSE -1.55 %, Orchid Pharma and Uttam Galva Metaliks, lenders did initiate insolvency proceedings well before the deadline, they said...

Govt may hold plan to ease hire and fire Protests by labour unions, political risk likely reasons The Union government is likely to put its proposal to ease retrenchment norms, by allowing factories with a large workforce to hire and fire without seeking its permission, on the back burner.Several protests staged by central labour unions, including the Rashtriya Swayamsevak Sangh affiliated Bharatiya Mazdoor Sangh (BMS), and the wide spread criticism from Opposition parties because of job losses on account of demonetisation and the goods and services tax (GST) might have put the contentious labour reform proposals in the slow lane, government officials said. “We are likely to maintain the status quo on the controversial labour law proposals, as trade unions are hell bent that the retrenchment norms should not be touched.The government may also not be willing to take a political risk, especially after it has come under attack of the Opposition parties on demonetisation and the GST,...

Fine on discoms for outages The government plans to fine distribution companies (discoms) from April 2019 for power outages deemed avoidable and will push for Direct Benefit Transfer (DBT) of electricity subsidy, as with cooking gas, in the statesDBT would, Power Minister RKSingh said on Thursday, make for a more competitive sector, besides helping to controlarise in supply rates. Centre will move an amendment to the Electricity Act for making power supply and DBT a legal obligation.DBT in power was introduced by Bihar this year, while raising tariffs by 25 per cent across all slabs.DBT introduced subsidy for some poorer sections and farmers. The central government launcheda Rs 16,000crore project in September to provide the rural population with power by the end of 2018.Most of the states, said Singh, have also agreed on 24x7 power for all, 90 per cent prepaid meters, and to make it mandatory for the firms to install prepaid or smart meters to prevent electricity theft. Singh was ...

Government to extend Aadhaar linking deadline to March 31 Apex Court to hear plea next week The Supreme Court will next week hear a plea seeking interim relief in the Aadhaar case while the top court decides the legality of the government's ambitious flagship programme to assign every citizen a unique identity number, after the government said it would only extend a deadline for getting Aadhaar and seeding it to various social security benefits from December 31, 2017, to March 31, 2018. A three-judge bench, led by chief justice of India Dipak Misra, agreed to hear the plea next week, the last working week of the court before it breaks for its winter recess. This despite an assurance held out by Attorney General KK Venugopal that the central government would issue a notification later in the day extending the deadline for 131 services till March 31, 2018. "The government will issue a notification today extending the deadline for 131services," the AG said, without s...

RBI should ensure fair MDR share ePayment companies While the Reserve Bank of India’s latest guidelines on merchant discount rates (MDR) have brought some respite to the digital payments industry, many payment executives ET spoke to feel that the central bank needs to ensure equitable distribution of MDR between the various participants of digital transactions. MDR is the amount paid by a merchant for a digital transaction and it is shared by multiple parties - the bank which issues the card, the acquiring bank which onboards the merchant, the network companies who process the transactions and the players who deploy the payment solution. As of now, the share of MDR is higher for the issuing entity while the acquiring company gets a much smaller share. Further, with the new rates from the regulator, payment companies fear their margins could be under further stress. While the maximum cap on MDR has been decided by theRBI, what needs to be done is that the ratio of split betwee...

Complications in GST anti profiteering rules The official form for making complaints under the antiprofiteering mechanism in the goods and services tax (GST) regime defeats the purpose —to help consumers get the full benefit of tax cuts and input tax credits. The form, APAF1, requires a consumer to file in detail the cost structure of the company against which a complaint is made for profiteering Also, details on sale price, taxes, both preGST and postGST, benefits of input tax credits, etc.Rajeev Dimri, partner with consultancy Deloitte India, asked how consumers could be expected to know all these details, particularly of cost structures, when even many insiders in such a company wouldn´t be aware of these Abhishek Jain, tax partner with EY India, said it also appeared that a separate application might be needed for each good or service in reference to which antiprofiteering is alleged.Pratik Jain of consultancy PwC India agreed the level of information asked for in the antip...

NCLT Bench quashes 75 percent vote requirement In a trend setting order, the bench here of the National Company Law Tribunal (NCLT) has struck down an attempt byagroup of banks to block an insolvency resolution plan by citing the 75 per cent vote share requirement prescribed under Section 30(4) of the Insolvency and Bankruptcy Code (IBC). The bench of judicial member Rajeshwara Rao Vittanala and technical member Ravikumar Duraisamy approved a one time settlement (OTS) as agreed to by Kamineni Steel &Power,a Hyderabad based corporate debtor, as part of a resolution plan cleared by a group of creditors with 66.67 per cent voting power. Speaking to Business Standard on the verdict,VK Sajith, an advocate for Indian Bank that had backed the resolution plan, with four other lenders, said the bench had gone beyond only the interests of corporate debtor and corporate creditors, as the plan involved possible rehabilitation of 450 workers. Indian Overseas Bank, Central Bank of Indi...

RBI holds rate tells banks to shape up Says recap will be front loaded for healthy banks; others have to prove efficiency.The Reserve Bank of India (RBI) kept its policy rate unchanged and stance neutral but its governor, Urjit Patel, set stiff conditions for ailing state owned banks to receive fresh capital from the government. Following the central bank´s fifth bi-monthly monetary policy review, the repo rate, at which the RBI lends to banks, remained at 6 per cent.All 10 economists and bond market dealers polled byBusiness Standard had predicted a pause. Ravindra Dholakia, an external member of the monetary policy committee, voted for a 25 basis point cut in interest rates.But the other five committee members, including Patel, voted for a pause. The policy statement said banks could widen previous interest rate cuts to outstanding loans, but bankers remained noncommittal about this.Among other important policy measures, the RBI said it would rationalise merchant discount rat...

HIGH ON GROWTH, LOW ON CASH While the central bank maintained its neutral stance and held policy rates, it revamped merchant discount inapush foralesscash economy Liquidity to remain comfortable: RBI The Reserve Bank of India (RBI) has permitted overseas branches and subsidiaries of Indian banks to refinance the existing external commercial borrowings (ECBs), giving them a level playing field visàvis their global counterparts.They can refinance ECBs of AAA rated companies as well as Navratna and Maharatna public sector undertakings, by raising fresh ECBs, the RBI said in a statement on developmental and regulatory policie "The decision in allowing subsidiaries of Indian banks abroad to refinance AAArated corporates will provide a fair and just opportunity to Indian banks to book and retain good quality assets," State Bank of India Chairman Rajnish Kumar said.Currently, Indian corporates are permitted to refinance their existing ECBs atalower all in cost. The oversea...

Importers of food cosmetics to get refund on excess GST Unsold inventory of imported chocolates, confectionery and cosmetics, which attracted 28% Integrated Goods & Services Tax (GST) during inbound shipments but are now retailing with an 18% levy, can claim refunds on the excess tax paid. “We have told importers that if they have imported goods at 28% and are selling them at 18%, they can claim a refund,” a senior official at the Central Board of Excise and Customs (CBEC) said. “They will, however, have to submit proof. We understand they have issues related to stickers.” All imports face customs duty and IGST (CGST+SGST), unless specifically exempted. Last month, the GST Council had slashed tax slabs on 178 products, including chocolates, confectionery, deodorants and shampoo, from 28% to 18%. Almost all Indian firms have dropped prices in relevant categories after the cut. “The reduction in GST rates for products imported at a higher rate may have some shortterm workin...

No change in norms RBI defends inspection regim The Reserve Bank of India defended its inspection regime and said that the divergence between the actual numbers reported by the banks and its assessment of bad loans is nothing extraordinary, and it is not moving the goal post. The only difference now, the central bank asserted, is that banks are disclosing these numbers, unlike in the past. Speaking for the first time on the issue of banks reporting huge divergences at the end of the September quarter earnings, the Reserve Bank of India on Wednesday said that the banks had not followed RBI’s asset classifications rules to the tee. “I want to make it very clear that there has been no change in the goal post, the rules haven’t changed,” said NS Vishwanathan, deputy governor, RBI. “We have assessed the banks classification on rules as they are today. We have found that in some cases, they have not applied those criteria.” The RBI’s scrutiny of non-performing assets has raised sever...