PSBs may re-approach Sebi for relaxing the rule on promoter equity
A majority of public sector banks (PSBs) with high government shareholding might have to soon re-approach the Securities and Exchange Board of India (Sebi) for relaxing the rule on promoter equity. They had got one such waiver. To bring this down as required, they could go for Qualified Institutional Placement (QIP) or Employee Stock Option Plans (ESOPs). However, in banks with particularly high government holding, even after exercising these two measures, the promoter holding might still be higher than the stipulated level.
Govt, regulators mull challenge-proof definition for shell companies
As multiple agencies and regulators probe suspected use of ‘only-on-paper’ firms for financial irregularities, the government is looking to put in place a proper definition for ‘shell companies’ so that investigations are not hampered and prosecution can withstand scrutiny in courts of law. A number of entities accused of using ‘shell companies’ for money laundering and other financial wrongdoings have challenged the regulatory action against them in recent months and there is a feeling that all regulatory gaps must be filled to avoid delay in bringing the guilty to book, officials said.
House panel to examine ‘bail in’ clause of FRDI Bill, to meet today
The Parliamentary Joint Committee will examine the controversial ‘bail in’ clause of the Financial Resolution and Deposit Insurance (FRDI) Bill, 2017 in the light of concerns being raised over the security of bank deposits and panic withdrawal of cash by depositors over the last few months. Highly placed sources who are privy to the workings of the joint committee told ET that the issue will be examined closely even though the government may have issued a clarification on the same. The committee is set to hold its tenth meeting on Monday.
Public sector banks may seek early recapitalization on new NPA rule
The Reserve Bank of India’s revised framework for resolution of stressed assets may lead to public sector banks calling for an earlier recapitalization by the government. Banks are making huge provisions after asset downgrades in the January-March 2018 quarter, when the new framework was implemented. The resolution framework does not brook even a day’s default in loan repayment. In case of default, banks are required to set in motion a resolution action, which has provisioning implications.
New direct tax code to benefit corporate, income tax payers
Businesses and low-income earners will stand to gain the most from the new direct tax code that the government is working on, two people familiar with the matter said. The proposed direct tax code, the draft of which will be ready by July, will take forward the government’s agenda of lowering corporate tax rate to 25% for all businesses and seek to give further relief to individual income tax payers. The idea is to moderate tax rates for assessee without squandering the recent gains in revenue growth and tax base.
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