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ICRA sees housing credit growth at

20% Rating agency ICRA sees credit from housing finance companies (HFCs) continuing to grow at an average of 20 per cent for the current financial year and picking up pace thereafter. HFCs will not have to lower their interest rates to attain that growth rate as demand for housing loans is expected to remain robust over the next few years, ICRA notes. The agency estimates that HFCs will require Rs 80,000 crore over the next five years to grow at over 20 per cent. Of this, Rs 55,000 crore will come from internal accruals.

Indian banks stare at gradual recovery

A revival of the country’s banking industry is likely to be gradual, according to a report published by Standard & Poor’s Ratings Services (S&P). The rating agency foresees growth in stressed assets receding in the next two to four quarters. Any material improvement in asset quality will lag economic recovery, corporate deleveraging, decisive steps to alleviate problem of stressed sectors and some respite on interest rates, the report adds.

Insurers get flexibility in annuity returns

The Insurance Regulatory and Development Authority (IRDA) has allowed life insurance companies flexibility to offer variable returns in immediate annuity plans. Life insurance companies will have flexibility to vary annuity rates in the range of -10 percent and +10 per cent of the approved annuity rates without taking prior approval of the regulator, provided the change is due to changing interest rate scenario, notes an IRDA circular.

For a variation of more than 10 per cent in annuity rates, life insurers will have to seek approval of the IRDA before selling the product.

Allahabad Bank bullish on gold loans

Kolkata-based Allahabad Bank is planning to roll out its gold loan scheme nationally. Currently, the scheme is operational in four southern States of Andhra Pradesh, Kerala, Karnataka and Tamil Nadu and in Kolkata. The western and northern parts of the country are next on the bank’s radar. Allahabad Bank will sanction a maximum of Rs 5 lakh as loan against gold jewellery with an annual interest of 12.5 per cent. The bank’s gold loan accounts for about Rs 200 crore of its retail loan portfolio of around Rs 19,000 crore.

Magma HDI to launch prepaid health card

Magma HDI General Insurance is planning to introduce a prepaid card that will facilitate payments at outpatient departments and day-care facilities of hospitals. The card will be used like any other debit or credit card but only in hospitals. The prepaid health card will be linked to the company’s upcoming health insurance products in individual, family and group categories. The amount of cash equivalent in the card will be based on the policy value of the user. Kolkatabased Magma HDI is a 74:26 joint venture between Magma Fincorp and HDI Gerling of Germany.

RBI eases norms for overseas investment

The RBI has eased foreign investment rules to attract funds for local ventures. The banking regulator has decided to recognise partly-paid equity shares and warrants issued by local companies as eligible instruments for the purpose of FDI and FPI.

Equity shares and compulsorily and mandatorily convertible preference shares or debentures, containing an optionality clause but without right to exit at an assured price, have also been recognised as FDI-compliant instruments.

New broadband licence for cable TV operators

The government is planning to introduce a new category of licence that will enable cable TV players and DTH operators to offer broadband services in the country. To be called cable TV internet service provider (ISP) licence, it will be a part of a new broadband policy being formulated by the Telecommunication Ministry. Under the existing policy, operators with either a unified licence or an ISP licence are allowed to offer broadband services.

But have to operate as franchisees of telecom companies, and this has not found many takers.

Govt eases norms for industrial licence

The government has extended validity period of an industrial licence to three years from two years. The provision, which will enhance ease of doing business, can be extended for two more years. The licence will, however, lapse automatically after five years in the absence of commencement of commercial production.

Applicants fulfilling prescribed requirements can be granted an extension of industrial licence with the approval of a joint secretary of the administrative ministry concerned without referring the application to a licensing committee

Overseas SEZs on the cards to tap inputs

The government has proposed to set up special economic zones (SEZs) for the Indian chemical industry in Myanmar and Iran. Calling the concept reverse SEZs, Union Minister for Chemicals and Fertilisers Ananth Kumar has stressed that facilitating Indian companies to set up manufacturing facilities in such zones abroad, where raw material is available in abundance, makes immense sense. Mr Kumar has added that he will be engaging with finance and external affairs ministers in mooting the idea of SEZs in other countries and formalising a concrete plan before reaching out to Myanmar and Iran.

SEBI extends time for standardised DIS

The SEBI has extended the timeline for standardising delivery instruction slips (DIS) from July 7 to October 1. The deadline was deferred owing to difficulties expressed by depositories and depository participants (DPs) in standardising the slips in the limited time. A DIS is used to transfer shares to a buyer’s demat account when a owner sells shares on a stock exchange platform or transfers shares to another demat account through offmarket route.

The market regulator has clarified that DPs should not accept old DIS for execution from a seller who has been issued new DIS.

Mobile no., email ID in I-T return forms

Taxpayers filing their income tax (I-T) returns this year will have to share their email IDs and mobile phone numbers with the tax department. The Central Board of Direct Taxes (CBDT), the administrative authority of the I-T department, has introduced a new column in the I-T return forms, asking for filers’ personal email ID and mobile number so that direct communication with taxpayer can be possible.

The department has added that one mobile number or email ID can be used for a maximum of 10 user accounts as the primary contact point

NABARD mulls NBFC to aid farmers

The National Bank for Agriculture and Rural Development (NABARD) is considering setting up a wholly owned non-banking finance company (NBFC). The move is aimed at complementing the efforts of the apex development bank to form and scale up farmer producer organisations (FPOs) under the aegis of the Producers Organisation Development Fund, which was set up in 2011.

BUDDING MANAGERS
AUGUST 2014 ISSUE