RBI withdraws 25% bank compensation for detecting fake note

The Reserve Bank on Friday said it has withdrawn the instructions on compensation to banks at 25 percent of the notional value of counterfeit notes detected.

“The instructions on compensation to banks at 25 percent of the notional value of counterfeit notes detected and reported and the system of lodging claims for compensation by Forged Note Vigilance Cell of banks stands withdrawn,” RBI said in a communication addressed to all bank chiefs.

Also, penalty at 100 percent of the notional value of counterfeit notes, in addition to the recovery of loss to the extent of the notional value of such notes, will be imposed when counterfeit notes are detected in soiled note remittance of the bank and if counterfeit notes are detected in currency chest balance of a bank during inspection/audit by RBI.

Among others, RBI asked banks to authenticate over the counter banknotes through machines as well as to stamp those fake as “counterfeit note” and impound.

“Banknotes tendered over the counter should be examined for authenticity through machines and such of these determined as a counterfeit one, shall be stamped as “counterfeit note” and impounded. “Each such impounded note shall be recorded under authentication, in a separate register,” it said.

For banknotes received in bulk at back office or currency chest through bulk tenders, the same procedure should be adopted, it added. Also, when a banknote tendered at the counter of a bank branch or treasury is found to be counterfeit, an acknowledgment receipt must be issued to the tenderer, after stamping the note as counterfeit.

Further, the receipt, in running serial numbers, should be authenticated by the cashier and tenderer.

“Notice to this effect should be displayed prominently at the offices/branches for information of the public. The receipt is to be issued even in cases where the tenderer is unwilling to countersign it,” it said. RBI said no credit to customer’s account is to be given for counterfeit notes, if any, in the tender received over the counter or at the back-office/currency chest.

The instructions come into effect immediately.

Expect 11-12% subscription revenue growth in FY16: Sun TV

With resolution on cap on minutes, advertisement revenue will see improvement in the current year, says SL Narayanan, Group Chief Financial Officer (CFO), Sun TV .

The channel’s main business comes from advertisement, subscriptions and its international segment. In an interview with CNBC-TV18, Narayanan says the subscriptions will be muted in FY16.

He expects 11-12 percent subscription growth and core growth of 12 to 15 percent this year. He adds that the digitization phase will begin in January 2016.

Sun TV has all investments in place for its radio business, he says. Radio penetration is limited, which limits revenue realisation, he adds.

In its ongoing case on security clearances, Narayanan says the company hasn’t received any communication from the I&B Ministry so far.

Hindalco seeks shareholders’ nod to raise up to Rs 6,000 cr

Aluminium maker Hindalco  Industries seeks its shareholders’ approval to raise up to Rs 6,000 crore through issuance of non convertible debentures (NCDs) on private placement basis.

“Consent is sought to offer or invite subscription to non convertible debentures up to an amount not exceeding Rs 6,000 crore on private placement basis from time to time until September 15, 2016,” Hindalco said in a BSE filing.

Hindalco said its Board will consider raising funds in one or more series/ tranches.

The company’s AGM will be held on September 16. Shares of Hindalco were trading at Rs 80.15, down 0.68 percent, on the BSE in the morning trade.

RBI to name ‘systemically important’ banks in 2-3 days

The Reserve Bank of India will release the names of banks it deems “systemically important” within two-three days, Deputy Governor R. Gandhi said on Tuesday.

In July 2014 the RBI had said four to six domestic lenders would be labelled “systemically important”, or the rough equivalent of too-big-to-fail in other countries.

The deputy governor was speaking to reporters on the sidelines of an industry event.

Separately, Gandhi also said four foreign banks had applied for a licence to adopt a wholly-owned subsidiary model in India. He did not elaborate further.

Despite rising NPAs, PNB,IDBI not to sell bad loans to ARCs

Even as they sit on mountain of bad loans, two large public sector lenders– PNB  and IDBI Bank  — on Tuesday said they are not planning to sell any stressed loans to asset reconstruction companies (ARCs), citing pricing issues and also they expect to recover the money from these accounts through innovative ways.

Stating that selling bad loans to ARCs is not the only way to recover bad loans, newly-appointed PNB managing director and chief executive Usha Ananthasubramanian said there are more innovative ways to deal with NPAs than an outright sale to ARCs.

“There are traditional methods of attacking bad loans, we need to get a bit more innovative. We are looking at the new dispensations and the methodologies allowed to us. We need to look at new approach while dealing with NPAs,” she told reporters on the sidelines of the annul banking summit Fibac here.

Similarly, IDBI Bank also said it is not looking at approaching the ARCs to dispose of its mount of bad loans.

Importantly, both these banks have reported spike in bad loans in the past quarters. “At this juncture, we are not thinking of going to ARCs because the ARC market is not that good and also because of the low rates being offered in the market,” IDBI Bank’s newly-appointed managing director and chief executive Kishor Kharat said.

PNB reported a steep 49 percent fall in net profit at Rs 721 crore in Q1 of this fiscal due to increased bad loans and higher provisions for NPAs which almost doubled to Rs 1,811.4 crore from Rs 927.61 crore in the year ago quarter.

Its gross non-performing assets stood at 6.47 percent and net NPAs at 4.05 percent. On the other hand, IDBI Bank reported 27 percent increase in net profit at Rs 135 crore despite a spike in gross non-performing assets which rose 31 percent to Rs 14,112 crore or at 6.64 percent from 5.64 percent.

Black money fight: Sebi, Govt to update SIT on safeguards

Asked to tighten its noose on tax evaders and black money launderers in stock markets, regulator Sebi will consult the government on all necessary steps, including on P-Notes, and update the Supreme Court-appointed Special Investigation Team about the safeguards.

At its board meeting here on Monday, the Securities and Exchange Board of India (Sebi) took stock of all the checks and balances it has put in place to check such manipulations, sources said.

The board members, which include the nominees from the government and the RBI as also independent members, were also apprised of the action initiated by Sebi against those suspected to be evading taxes and laundering black money through stock markets.

Sebi has barred over 1,000 entities so far in such cases through interim orders, while further proceedings are underway and all these matters have been referred to other agencies including Income Tax Department, Financial Intelligence Unit and the Enforcement Directorate.

While the government and Sebi are of the view that sufficient measures are in place to deal with such cases, further consultations would be held to ascertain whether additional safeguards need to be put in place. The SIT would be informed about the existing measures and additional steps, if any, in this regard, the sources added.

The board discussed the latest SIT report on black money, which among others had suggested last month that further steps might be required to check misuse of P-Notes route to launder unaccounted money from abroad.

In its latest report, the Special Investigation Team on Black Money had suggested that Sebi needs to further strengthen its monitoring mechanism to detect instances of the stock market platform being misused for tax evasion. It had also suggested Sebi to review its regulations on participatory notes to help identify the end-users of these instruments.

Finance Secretary Rajiv Mehrishi had also said last week that there was no requirement for “much change” in the regulations for Participatory Notes as the existing norms make it ‘almost impossible’ to misuse this route.

PM reviews stock, currency situation; keen on reforms: FM

Amid a bloodbath in the markets, Prime Minister Narendra Modi on Monday reviewed the situation and favoured pushing ahead with the reforms agenda and taking more steps to strengthen the economy.

Finance Minister Arun Jaitley told reporters that the Prime Minister took stock of equity and currency markets, and was of the opinion that “our economy is stable” but more needed to be done.

The review of the economy at the highest level came against the backdrop of the benchmark Sensex plunging by 1,624.51 points to 25,741.56 — its lowest level since August 2014 – and nearly Rs 7 lakh crore getting wiped out from the investors’ wealth.

Besides, the rupee also fell the most in 23 months to hit two-year low at 66.64 against the US dollar. “PM is of the opinion that in order to further strengthen our economy, we should take more steps,” Jaitley said, adding there will be no change in the strategy and the initiative to attract investors would continue.

He said further discussion will be held with private and public partners to take “measures to attract investors and use the situation as an opportunity”.

The Prime Minister, he said, is keen that the present global crisis should be converted into an opportunity for India.

“We are not (offering) any packages as of now as our internal fundamentals like industrial production, capital and public expenditure have improved,” Jaitley said, adding normal reforms in the pipeline will continue.

He said that the global factors are transient in nature and all global markets have been adversely impacted.

Stating that the government and the regulators were keenly monitoring global developments, he said, “our parameters are strong. Our growth will be maintained.” Minister of State for Finance Jayant Sinha said the PM discussed ways to push forward reforms agenda and hoped India will continue to be an attractive investment destination. Sinha also said the markets were expected to be volatile for some time.

Bandhan Bank to fund SMEs, create jobs: Jaitley

Newly-launched Bandhan Bank will fund lakhs of small and medium entrepreneur s, create jobs and act as a response to agrarian poverty, Finance Minister Arun Jaitley said today. “A great institution is being born in West Bengal,” he said while inaugurating Bandhan Bank here. Bandhan Bank today launched its operations with 501 branches in the country.

The company, which started operations as a micro finance institution, got final approval from RBI in June to launch commercial banking operations. Jaitley said Bandhan Bank Chairman and Managing Director Chandra Shekhar Ghosh has said that the priority area of the bank will be small and medium enterprises ( SME s). “It is a landmark initiative in the service of country and state.

It is these entrepreneur s in SME s, many of them in unorganised sector, who today form the backbone of Indian economy. “Small entrepreneur s, from shopkeepers to hawkers, they are generating almost 11-12 crore jobs in this country. The large organised industry is able to generate only a small fraction of that,” Jaitley said.

He said if private sector initiatives like Bandhan Bank join this effort of funding at the grass-root level, then the small enterprises can grow on their own feet. “All over the eastern parts of the country, in states like West Bengal, if we are able to create small entrepreneur s in lakhs we can then see it as a response to agrarian poverty that is building up,” Jaitley said. The objective is to extend over Rs 1 lakh crore worth funds to SME s across the country, Jaitley said, adding that SME s usually repay what they borrow and the banks’ NPAs are not because of lending to this sector.

“If funding of unfunded sector continues, it is they who generate jobs and it is they who take very little assistance from the state and go back and return what they borrow. The problem of NPA, certainly this segment is not responsible for them,” he said. Jaitley also said that the Centre has set up a MUDRA agency which will slowly evolve as MUDRA Bank and the main purpose is to fund the unfunded.

Gold surges 2% as dovish Fed mins bolster case for delayed rate hike

Investing.com – Investing.com — Gold futures surged on Thursday enjoying one of their strongest one-day moves of 2015, following relatively dovish minutes from the Federal Open Market Committee’s July meeting strengthened the possibility of a delayed interest rate hike from the U.S. central bank.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a broad range between $1,132.20 and $1,153.60 an ounce before settling at 1,152.20, up 24.30 or 2.15%. At one point, gold reached its highest level since mid-July as it continues its recovery from one of the worst downturns over the last two decades. The precious metal is now down roughly 1.85% from its peak of $1,200 an ounce in June.

Gold likely gained support at $1,112.90 the low from August 17 and was met with resistance at $1,166.80 the high from July 10.

Investors continued to digest the minutes from the FOMC’s July meeting on Thursday, ones in which the Fed offered no clear indications on an imminent rate hike. The FOMC appears particularly concerned with the deceleration of inflation, as it continues to remain under its long-term targeted goal of 2%.While the Consumer Price Index (CPI) inched up 0.1%, it still fell under analysts’ forecasts of a 0.2% monthly gain. The Core CPI Index, which strips out food and energy prices, rose by 1.8% on a yearly basis, also falling below the Fed’s target by 0.2%. The FOMC appears sharply divided on whether inflation is moving close to a level it deems appropriate to start raising short-term rates.

The FOMC said by some objectives the inflation data was “not progressing” toward its targeted goal, according to the minutes. Other members, however, said that inflation conditions for a rate hike would be met or could be “met shortly.”

The Fed’s benchmark Federal Funds Rate has remained at its current level between zero and 0.25% since 2009 at the conclusion of the Financial Crisis. In addition, nearly a decade has passed since the Fed has last raised the benchmark rate.

Gold, which is not attached to interest rates or dividends, struggles to compete with high-yield bearing assets in raising rate environments.

Although Fed chair Janet Yellen has indicated that it is likely the FOMC will lift its benchmark Federal Funds Rate in 2015 if economic conditions continue to improve, the Fed has not said definitively that lift-off will occur in September. Following the dovish reading on Wednesday, a large percentage of inventors now believe it is more likely that lift-off will take place in December.

The minutes also showed that the Fed has expressed mounting concerns with the slumping Chinese equities markets. Several participants in the July FOMC meeting noted that a “material slowdown in Chinese economic activity” could have a spillover effect into the U.S. economy. China is the world’s largest producer and second-largest consumer of gold behind India.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.45% to an intraday low of 95.87 in spite of optimistic U.S. employment and manufacturing data. As a result, the index fell to its lowest level in more than a month.

Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.

Silver for September delivery jumped 0.291 or 1.92% to 15.475 an ounce.

Copper for September delivery soared 0.038 or 1.68% to 2.314 a pound.

Eye 22-25% growth in FY16; focus on Europe, US: Nitin Fire

After a steady June quarter, Nitin Fire is aiming for a 22-25 percent revenue growth in FY16, the company’s Executive Director (ED) Rahul Shah told CNBC-TV18.

The company’s total income grew 18.6 percent to Rs 339 crore and profit after tax (PAT) rose 11 percent to Rs 20.8 crore. Margins expanded 140 basis points in the June quarter.

Shah says Gulf Cooperation Council (GCC) and UAE business have been growing at a steady pace. The company is focusing on Europe, Africa and North American markets in coming two to three years, he added.

Shah expects margins to improve by 50-100 basis points (bps) this year. On the company’s expansion plans, Shah says that with adequate capacity for another two years, there are no plans to raise funds. Internal funds will be ploughed into the business for growth.

The company is aiming to become a USD 20 billion by 2020 for which the road map is set already, he says.