Banks haven't made significant penetration in mobile banking: RBI

“Banks have not really made a significant penetration even among their existing customers to extend mobile banking services,” RBI deputy governor KC Chakrabarty said at an International Banking Summit in Mumbai

The Reserve Bank said that banks have not really made a significant penetration to extend mobile banking services, even among their existing customers.

"Banks have not really made a significant penetration even among their existing customers to extend mobile banking services," RBI deputy governor KC Chakrabarty said at an International Banking Summit in Mumbai.

"The most important concern is that there is a significant percentage of financially excluded population and the potential of the mobile phone to extend them financial services is still to be tapped," Chakrabarty said.

The RBI has always been conscious of the need to bring every citizen of the country within the ambit of the banking system.

However, he said, "Presently 65 banks have been approved for conduct of mobile banking out of which 47 banks have commenced offering these services."

According to the banking regulator, more than 2.8 million transactions for close to Rs1,96.12 crore were transacted during February 2012 - a 300% increase in volume and more than 200% in value terms as compared to 7 lakh transactions for close to Rs61.62 crore during February 2011.

"A little over 1.22 crore bank customers have so far registered for mobile banking services. These numbers are not really heartening," he said, adding that only 55% of the people of India have deposit accounts.

Appreciating the difficulties of banks to viably operate bank branches in every village, Chakrabarty said, "We had permitted them to appoint business correspondents (BCs) to address this."

On demand from the industry, he added, we have also permitted "for profit" companies to be appointed as BCs, which would enable a healthy fusion of the expertise of banks and the communications and agency of non-banking network.

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P-Note holders not liable to pay tax in India: FM

Referring to the provisions in the Finance Bill 2012 on overseas investments, finance minister Pranab Mukherjee said, "I would like to categorically clarify that the intention of the government is not to cause any harassment to genuine investors"

New Delhi: Setting at rest the uncertainty about overseas investments, finance minister Pranab Mukherjee today said that persons investing in stock markets through participatory notes (P-Notes) will not have to pay taxes in India, an assurance that pushed up the markets, reports PTI.

"Indian tax authority would not go beyond financial institutional investors (FIIs) to check the details about P-Note holders.

Accordingly, a question of liability for tax in India of the P-Note holder would not arise. Necessary clarification will be issued", he told reporters here.

Following an assurance by the minister, the BSE Sensex shot up 285.66 points to 17,344.27 points at mid session.

Participatory Notes (P-Notes) are instruments that allow FIIs, which are not registered with market regulator Securities and Exchange Board of India (SEBI), to invest in the Indian equity market.

Referring to the provisions in the Finance Bill 2012 on overseas investments, Mr Mukherjee said, "I would like to categorically clarify that the intention of the government is not to cause any harassment to genuine investors."

Pointing out that P-Note holders invest in stock market through FIIs, the minister said, "The income tax department would examine the tax liability of the FIIs."

The proposals in the Finance Bill 2012 relating to taxation of indirect transfers of assets and General Anti- Avoidance Rules (GAAR) have created concerns among the foreign investors leading to uncertainty in the stock markets.

The Asia Securities Industry & Financial Markets Association (ASIFMA) along with Securities Industry and Financial Markets Association (SIFMA) had written to the finance minister contending that "such onerous taxation or even the risk of such taxation could threaten this important source of capital for India's businesses".

Noting that FIIs are carefully evaluating these new tax risks, the letter had said the proposals were too broadly worded.

FIIs have assets under custody of more than Rs10 lakh crore or 17% of the capitalisation of India's equity markets. Further, these entities also invest in Indian government and corporate debt, as per the letter.

It appears that market participants have already begun to reduce their positions in India, it said.

In the Budget for 2012-13, Mr Mukherjee has proposed GAAR in order to "counter aggressive tax avoidance schemes, while ensuring that it is used only in appropriate cases, by enabling a review by a GAAR panel".

The fear of GAAR had spooked stock markets had pulled them down on concerns that all short-term capital gains made by FIIs and P-Note investments would be taxed.

As per the Finance Bill, GAAR would be applicable from 1st April.

The markets thus settled and moved up on assurance by Mr Mukherjee that P-Note holders will not be taxed and a clarification will be issued by the finance ministry.

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COMMENTS

Java

5 years ago

Perfect notes for ISI, Dawood, KGB and everyone else abroad who wants to make quick, big money from India and screw the markets here at will, without any worries at all! Come to India folks, it's a free for all, and the going's good!!
All because a few Indian politicians want to make more money from their funds stashed abroad.

Green Tribunal suspends environmental clearance to Posco

The tribunal pointed out that memorandum of understanding between the Orissa government and Posco states that the project is for production of 12 MTPA but the environment impact assessment report has been prepared only for 4 MTPA steel production in the first phase

New Delhi: The environment clearance granted to Posco's mega steel project in Orissa in January 2011 will remain suspended till the environment ministry reviews it afresh, reports PTI quoting the National Green Tribunal.

"The environment clearance granted on 31 January 2011 to the project shall remain suspended till such review and appraisal is done by the ministry," a bench of tribunal comprising justice CV Ramulu and Devendra Kumar Agarwal held.

The tribunal pointed out that memorandum of understanding between the Orissa government and Posco states that the project is for production of 12 million tonnes of steel per annum (MTPA) but the environment impact assessment (EIA) report has been prepared only for 4 MTPA steel production in the first phase.

It said the MoEF should take "policy decisions" that in projects of such magnitude the EIA should be done for the complete project.

"The EIA should assess it for the full capacity right from the beginning," it said.

The tribunal directed the MoEF to review the clearance afresh and attach "specific conditions" which Posco would have to follow in a "defined timeline".

It also directed the MoEF to set up a special committee to "monitor the compliance to the environment clearance" thus granted.

The bench said appointment of Meena Gupta as chairman of the committee to review the environmental clearance showed "departmental bias" as she had only 'supported' the environment clearance granted to Posco earlier during her tenure as the secretary, the MoEF.

"The entire process was vitiated in the eyes of law," the bench said in this regard.

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