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The gold monetisation scheme (GMS), announced by the Reserve Bank of India (RBI) on Thursday, would work only for medium- and long-term gold deposits as banks would find it difficult to recover operational costs and hedging costs for short-term deposits, bankers said. The designated banks are allowed to accept gold deposits as a short-term deposit (one to three years), medium-term (five to seven years) and long-term (12 to 15 years). Medium-term and long-term deposits would be treated as government borrowings and rate of interest on that will be determined by the government in consultation with RBI, while short-term interest rates would be fixed by individual banks. Given the costs and assessment of earnings by lending gold, bankers say they would be able to offer an interest rate between one and two per cent on short-term gold deposits. While all charges like melting and testing in medium- and long-term deposits will be borne by the government, banks will have to shell out the

The finance ministry on Friday said it has moved a Cabinet note on setting up the Monetary Policy Committee (MPC), which will retain dominant role of the Reserve Bank of India ( RBI) in the proposed interest- rate setting panel. “The government has prepared aCabinet note on MPC. RBI is a very credible institution and nothing will be done in MPC composition that undermines the role of RBI,” said a senior finance ministry official. The official did not elaborate on composition or voting rights of the RBI governor in the MPC, which will replace the current practice of the governor d eciding on interest rate on advice of the technical advisory committee. The revised draft of the Indian Financial Code, released by the ministry in July, had suggested doing away with the RBI governor’s veto power and proposed a 7- member MPC to take decisions by a majority vote. Of the seven members, four would be government nominees and the rest from RBI. Under the current system, the RBI governo

Pharma & tech sectors likely to be impacted the most, finds a study Come April 2016, investors may find it less tedious to compare earnings of listed companies with the new Indian accounting standard -Ind-AS -set to be implemented. But, the transparency will come at a cost. Profitability of many companies could be impacted heavily because of the new rules. A study by brokerage Ambit Capital of companies that are part of the Nifty shows that sectors such as pharma and technology along with conglomerates will be most impacted. Among companies, Tata Motors, Wipro and Dr Reddy's could see lower profits under the new accounting standards, said Ambit. More than 500 listed Indian companies (comprising about 75% of the total market capitalisation) will adopt Ind-AS. Several consultants said investors and analysts may need to brace for sharp variations in earnings from what they had estimated. “Next year many companies' results would look very different, as you would have di

The Income-Tax de partment has begun the process of final assessment of those black money declarations that were made to it as part of the one-time compliance window that closed in September. Sources said while a final reconciliation of the total amount and number of declarations had been done few days after the window closed on September 30, the department has now begun analysing and assessing the validity of these declarations. They said a special office created to receive these undisclosed funds is expected to issue final statements to the declarants by November so that they can pay their due taxes by December 31 this year. “Instructions have been issued to the department to check and go through the validity of each and every of the 638 declarations before taking final action.“ The Economic Times, New Delhi, 23rd Oct. 2015

Pushing to fast track reforms, the labour ministry plans to place as many as six bills before Parliament in the Winter Session starting next month. “A lot of work has been done on six legislations under the labour reform process. The ministry is keen to push all of them for passage in the Winter Session of Parliament next month,“ said a source. They include Child Labour (Prohibition & Regulation) Amendment Bill, 2012 and Payment of Bonus (Amendment) Bill, 2015, which have already been approved by the Cabinet, the source added. The ministry has also completed tripartite consultations on the Labour Code on Industrial Relations, 2015; Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014 and Labour Code on Wages. These are with Law Ministry for vetting, the source said.Once approved, these bills will be sent to the Cabinet for approval and then to Parliament. The Economic Times, New Delhi, 23rd Oct. 2015

The proposed GST regime is likely to provide for monthly filing of returns for business to business dealings through a set of eight forms for different categories of transactions. The Joint Committee on Business Process for GST in relation to GST Return has suggested filing of a periodic e-return for Central GST, State GST and Integrated GST. As per the proposal, the returns can be filed on a specific date of a month, like on 10th of next month for outward supplies, 15th for inward supplies and 20th in case of monthly returns. The Committee suggested that in the GST regime there should be eight forms for filing of returns by tax payers. There will also be provision for filing of GST returns by non-resident tax payers in form GSTR-5. Non-resident tax payers could include taxi aggregators like Uber. The report said there will be a defaulters list of those failing to file returns periodically and such details would be forwarded to GST authorities for necessary action. The Join

To cut down on the import bill, the Reserve Bank of India (RBI) on Thursday announced a gold monetisation scheme (GMS) that allows individuals, trusts and mutual funds to deposit gold with banks and earn an interest on it. Prime minister Narendra Modi will launch the scheme on November 5. The RBI said the minimum deposit under the scheme should be raw gold equivalent to 30 grammes of 995 fineness. The central bank has not fixed a maximum limit for deposit. The designated banks will accept gold deposits under the short-term (one to three years) bank deposit as well as medium-term (five to seven years) and long-term government deposit schemes (12 to 15 years). There will be a provision for pre-mature withdrawal, subject to a minimum lock-in period and penalty to be determined by individual banks. The GMS will replace the existing gold deposit scheme, started in 1999. However, the deposits outstanding under the old scheme will be allowed to run till maturity unless the depositor