Govt may reduce lock-in for Rajiv Gandhi equity scheme

Finance minister Pranab Mukherjee in his 2012-13 Budget had announced Rajiv Gandhi Equity Scheme, under which 50% tax deduction would be allowed to retail investors with annual income less than Rs10 lakh, for investment up to Rs50,000, with a lock-in period of three years

New Delhi: The finance ministry is considering reducing the lock-in period for Rajiv Gandhi Equity Savings Scheme to one year from the proposed three years to make it more attractive to retail investors, reports PTI.

“The investors can put money in top 100 companies listed in BSE and NSE (under the scheme). We are looking at reducing the lock-in period requirement,” said an official source.

Sources said, however, that investors will not be allowed to shuffle the equity portfolio before the end of the year of investment.

In order to encourage savings and improve investment in capital markets, finance minister Pranab Mukherjee in his 2012-13 Budget had announced Rajiv Gandhi Equity Scheme, under which 50% tax deduction would be allowed to retail investors with annual income less than Rs10 lakh, for investment up to Rs50,000, with a lock-in period of three years.

Sources said this type of scheme was first introduced in Belgium, followed by France and some Eastern European nations.

“The scheme was highly successful in France and had helped in increasing retail participation in Equity market from 7% to 17%,” a source said, adding it was also appreciated by International Monetary Fund (IMF) chief Christine Lagarde in her recent meeting with Mr Mukherjee.

Finance secretary RS Gujral had earlier said that a formal guideline on the scheme, aimed at channelizing savings into the stock markets, will be issued within a month.

Besides introducing this scheme, the government has also proposed to make stock market investment more attractive by lowering the securities transaction tax (STT) by 20% from 0.125% to 0.1% on cash delivery transactions.

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RBI extends deadline for MFI provisioning norms to April 2013

“Taking into account the difficulties faced by MFI sector and the representation received by the bank from them, it has been decided to defer the implementation of asset classification and provisioning norms for NBFC-MFIs to 1 April 2013,” the RBI said in a notification

“Taking into account the difficulties faced by MFI sector and the representation received by the bank from them, it has been decided to defer the implementation of asset classification and provisioning norms for NBFC-MFIs to 1 April 2013,” the RBI said in a notification

New Delhi: The Reserve Bank of India (RBI) has deferred the deadline on implementation of asset classification and provisioning norms for non-banking financial company-micro finance institutions (NBFC-MFIs) to 1 April 2013 from April this year, reports PTI.

“Taking into account the difficulties faced by MFI sector and the representation received by the bank from them, it has been decided to defer the implementation of asset classification and provisioning norms for NBFC-MFIs to 1 April 2013,” the RBI said in a notification.

NBFC-MFIs was introduced as a new category on 2 December 2011, which also contained guidelines on asset classification and provisioning norms to be adhered to by the microfinance institutions (MFIs) with effect from 1 April 2012.

“The NBFC-MFIs are, however, required to comply with the other regulations laid down in December 2011,” it said.

In the second quarter review of monetary policy in November 2010, a sub-committee of the Central Board of the RBI, chaired by YH Malegam, was constituted to study issues and concerns in the MFI sector.

“However, the committee submitted its report in January 2011. Thereafter, the broad framework of regulations recommended by the panel has been accepted by the bank,” RBI had said earlier.

In October 2010, the MFI sector faced problems in which a spate of suicides by borrowers in Andhra Pradesh due to alleged pressure from recovery agents appointed by the MFIs.

The Andhra government then passed a law which gave overarching powers to the state and imposed a slew of measures to control MFIs' activities, including capping their lending rates.

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Bajaj Energy ceases to be subsidiary of Bajaj Hindusthan

Bajaj Hindusthan's stake in Bajaj Energy -- the special purpose vehicle for 450 MW coal fired thermal power project -- has come down to 26.07% from earlier 51%, following further allotment of shares by the SPV

India's largest sugar firm Bajaj Hindusthan said Bajaj Energy, which is setting up five power plants in Uttar Pradesh with a total capacity of 450 MW, has ceased to be its subsidiary.

Bajaj Hindusthan's stake in Bajaj Energy -- the special purpose vehicle for 450 MW coal fired thermal power project -- has come down to 26.07% from earlier 51%, following further allotment of shares by the SPV, according to company's filing to the Bombay Stock Exchange (BSE).
 
In 2010, Bajaj Hindusthan had forayed into power venture. It had announced setting up five coal based power plants, each with 90 MW capacity, in UP adjacent to its 5 sugar plants.

The project cost was estimated to be at Rs2,300 crore.

In the late afternoon, Bajaj Hindusthan was trading at around Rs32.75 per share on the Bombay Stock Exchange, 5.48% up from the previous close.

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