Brokers’ interest income from loans to clients faces tax axe
Stock brokers earning interest income by lending to clients for betting on the market will now have to pay goods and services tax, the Central Board of Indirect Taxes and Customs (CBIC) clarified earlier this week. The CBIC said brokers without non-banking financial company (NBFC) subsidiaries will have to pay 18 per cent GST on interest earned from margin funding and delayed settlement payments. The move will add to the cost of transaction for clients and squeeze smaller broking firms that do not own NBFCs. Till now, these firms did not pay GST on such interest income.
Facebook data sharing row: Government seeks explanation by June 20
The government of India has sought explanation from Facebook over reports of data sharing without explicit consent with device manufacturers. The California headquartered social networking company has been given time till June 20 to respond to the fresh letter by the government. This is the third letter which the government has send to Facebook since the controversy over the data breach by British firm Cambridge Analytica came to light. In a statement the ministry of electronics and information technology said that recently there have been media reports claiming that Facebook has agreements which are allowing phone and other device manufacturers’ access to its users’ personal information, including that of their friends without taking their explicit consent.
IBC Ordinance: No ‘relative advantage’ – Bar on promoter kin, related partly spelt out
The latest ordinance on the Insolvency and Bankruptcy Code (IBC) has defined “relatives” and “related party” in relation to individuals who have run a stressed firm and will now be barred from bidding for it. Analysts said the move will make the disqualification of family members of defaulting promoters more explicit and could impact cases like Essar Steel in which Rewant Ruia, son of the company’s co-promoter Ravi Ruia, is alleged to be one of the end beneficiaries and a shareholder of Numetal that has bid for the stressed steel firm.
Companies linked to ICICI Bank controversy comes under MCA lens
The Ministry of Corporate Affairs is looking into companies involved in the ICICI Bank controversy of alleged conflict of interest in bank chief Chanda Kochhar’s dealings with certain borrowers, according to a senior official. The official also said the affairs of ICICI Bank are not being looked into by the ministry as that is completely under the purview of the Reserve Bank of India (RBI). “The ministry is looking at allegations with respect to fraudulent, preferential or under-valued transactions… (related to) those companies which have come into controversy in the light of ICICI Bank issue,” the official said on Wednesday.
Boosting non-interest income: PSBs under PCA tie up with insurers and MF aggregators
With curbs on lending, bond yields shooting up and a limited portfolio of non-core assets to monetize, the smaller public sector banks (PSBs) under the Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework are relying on non-credit products, such as insurance and mutual-fund distribution, to boost their income. Earlier this month, Kolkata-based UCO Bank floated a request for proposal (RFP) for the selection of life insurance companies for a corporate agency tie-up for its banc assurance business.
Auditing regulator NFRA likely by Sept
The NFRA — the proposed auditor oversight body for listed and large unlisted companies — has certainly not gone off the Centre’s radar. It will be up and running before the end of September, a top government official said. “Let me put all doubts to rest. NFRA will come and will come in the most effective manner,” said the official who did not wish to be identified. The proposed National Financial Reporting Authority (NFRA), rules for which were notified in March-end, will hold more powers than its counterparts around the world, the official added.
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