The move from RBI assumes significance as the SEZs or the tax-free zones are losing sheen because of withdrawal of tax incentives
Mumbai: Relaxing the norms for Special Economic Zones (SEZs), the Reserve Bank of India has allowed domestic companies to make payments to units in these zones in foreign currency for the services delivered by them, reports PTI.
Earlier this facility was allowed only for payments made towards goods.
"... it has been decided to allow ADs (banks) to sell foreign exchange to a unit in the domestic tariff area (DTA) for making payment in foreign exchange to a unit in the SEZ for the services rendered by it (a unit in SEZ) to a DTA unit," the central bank said in a notification released today.
The move assumes significance as the tax-free zones are losing sheen because of withdrawal of tax incentives.
To attract investments in these zones, the Commerce Ministry is expected to soon announce some more incentives for SEZs to be set up in backward areas of the country.
However, RBI said that such payments would be authorised for only those services which are mentioned in the Letter of Approval issued to the SEZ unit.
Also to promote rising software exports, RBI in a separate notification said it has simplified the procedure for exporting goods and services by all the Software Technology Parks of India (STPIs) from five STPIs allowed earlier.
Earlier, only five STPIs-Bangalore, Hyderabad, Chennai, Pune and Mumbai came under this facility.
Moreover, to ensure larger flow of credit to trade and industry in Jammu and Kashmir, RBI has extended credit relaxations to borrowers in the state until March 2014.
"It has been decided that the concessions/credit relaxations to borrowers/customers in the State of Jammu and Kashmir...will continue to be operative up to March 2014."
The state-run bank raised $500 million from overseas market, the second and final tranche under its medium term note programme size of $1 billion
New Delhi: State-owned Syndicate Bank has raised $500 million (about Rs2,600 crore) through bonds to fund its overseas business growth, reports PTI.
"We have raised from overseas market $500 million, the second and final tranche under the bank's MTN (medium term note) programme size of $1 billion," a senior Syndicate Bank official said.
The bond with maturity period of 5.5 years carries a coupon rate of 4.125% per annum payable semi-annually in arrears.
The money raised would be utilised for expanding operation of the bank's London branch functioning since 1976, the official said.
The services rendered at its London branch include corporate lending, participation in syndications, handling Letters of Credit and Guarantees transactions, trade finance, NRI services, ECBs and international treasury services.
Syndicate Bank has reported 43.3% increase in net profit at Rs463 crore for the second quarter ended September.
The bank had a net profit of Rs323 crore during the same quarter of the previous fiscal.
However, gross NPAs rose marginally to 2.47% of loan assets as on September 2012 as compared to 2.38% at the end of second quarter of the previous fiscal.
Forward Markets Commission in a report suggested various measures to check speculators, including review of easy credit by banks and other institutions for trading in commodities
New Delhi: Commodities market regulator Forward Markets Commission (FMC) has suggested reviewing of easy credit by banks and other institutions for trading in commodities like guar, in a bid to curb speculation, reports PTI.
In the final report on 'Analysis of price movement and trading in guar complex" submitted to the Consumer Affairs Ministry, FMC has suggested various measures to check speculators participation in guar trading.
The regulator in May had come out with an initial report on guar futures trade during February-March 2012 and had highlighted irregularities in guar futures trade. It had also found involvement of some entities in the sharp rally during the period.
On the recommendations of the regulator, a senior government official said, "FMC has recommended that availability of easy finance is a prerequisite for processors, exporters and other value chain participants, but the financing for purely commodity trading needs to be curbed."
The option of easy institutional finance has helped in infusing additional liquidity with the commodity traders and has helped the market to grow, the official added.
"The regulator feels that although this step has helped infuse more funds in the market, yet, there is a need for policy review regarding commodity financing by financial institutions and banks," the official said.
Futures prices of guar gum at the NCDEX platform had more than doubled between February-March this year on speculation, prompting the market regulator to stop traders from taking fresh positions in the running contracts.
According to the exchange data, guar gum prices stood at Rs92,090 per quintal on 22nd March, as against Rs42,019 per quintal on 1st February despite negligible participation. The prices, however on 23rd March fell to Rs71,970 per quintal after FMC intervention.
In order to bring more transparency in the commodities futures market, FMC is considering issuing directions to large position holders to declare their physical market positions, the official said.
That apart, regulations on day-trading, strengthening guidelines for Margin Funding, allowing futures in narrow commodities like guar seed and gum, mentha oil, cardamom, etc are also being considered by the regulator, the official said.
"FMC also suggested setting up a dedicated agency to collect and disseminate timely information on production, imports, exports, stocks and overall availability of commodities to bring more transparency," the official said.
The regulator in its report also suggested that it should be vested with powers to impose financial penalties on erring market intermediaries directly for effective control of the commodities futures market, the official added.
At present, the country has five national and 16 regional commodity exchanges.