IIFCL plans to start advisory services subsidiary by March

Takeout financing is a procedure under which loans given by banks to infrastructure firms are sold to other institutions. This is to enable banks recover their much-needed funds ahead of the payment schedule under the loan agreement.

India Infrastructure Finance Company (IIFCL) has said it proposes to operationalise its project advisory subsidiary by the end of March next year.

“We hope the new subsidiary begins its operations by the end of the current fiscal,” said IIFCL chairman and managing director SK Goel. The board has approved setting up a separate subsidiary of IIFCL for project development advisory services, he said. This subsidiary would provide advisory services for infrastructure development, he said, adding that this would greatly help in timely development of projects.

On the recent changes on ‘Takeout’ financing by the government, Mr Goel said the modifications have been carried out to make the scheme more attractive to both infrastructure project developers and banks. Takeout financing is a procedure under which loans given by banks to infrastructure firms are sold to other institutions. This is to enable banks recover their much-needed funds ahead of the payment schedule under the loan agreement. This is done to address the asset-liability mismatch.

Transparent and a competitive pricing for Takeout Finance Scheme have been put in place, Mr Goel said.

The pricing of Takeout shall range from 0.25% to 1.5% over the benchmark rate of lending of IIFCL which is currently 9.65% depending upon the post commercial operation date (CoD) credit rating of the project, he said.

Major concession in pricing has been announced for PPP projects and the current rate of Takeout would range from 9.90% to 10.85% depending on the ratings of the project, he said. As part of the modification, he said the government has allowed receiving of proposals for Takeout from borrowers also, he said.

Existing lenders would be incentivised by way of passing on the Takeout fee to the extent of 0.3% of the takeout loan to the borrowers. In case of road sector projects, Takeout can occur at any time after actual CoD, he added.

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Black money: I-T dept to reopen past tax returns

A number of them denied their liability either by saying the information the department has obtained from foreign shores has no legal sanctity or simply that they are not the one.

Faced with a number of cases of denial of secret foreign bank account holdings, the Income Tax (I-T) department has decided to re-open past tax returns of such individuals in Mumbai and Delhi among others, in order to unearth black money stashed abroad.

The Central Board of Direct Taxes (CBDT) has decided to send the names of those taxpayers to the I-T assessment wing who have refused holding accounts in Swiss or Liechtenstein banks after India recently obtained their names during its fight to unearth illegal funds hidden in foreign shores. The I-T department (in Mumbai, Delhi, Bangalore and Ahmedabad) issued notices to those people, whose names appeared on the classified list obtained from foreign countries. But a number of them denied their liability either by saying the information the department has obtained from foreign shores has no legal sanctity or simply that they are not the one.

These names, about 70, will now be sent to the respective assessment ranges and the assessing officer will re-open the corresponding I-T returns of the year which is reflected on the classified list obtained from various countries.

“The taxpayers entire income and transactions in that year will be re-checked electronically and manually to see if the denial is true,” sources said.

According to sources, the list which the I-T department has received shows the name of the account holder, his passport number and the total amount held by him or her till recently in secret bank account. India has obtained data of over 700 HSBC accounts from the French government.

In 80 cases, the department has detected undisclosed income of Rs438 crore and taxes of Rs135 crore have been realised so far. In this context, the government has also imposed a penalty of Rs24.66 crore on 18 individuals who have bank accounts with LGT Bank of Liechtenstein on the basis of information provided by the German authorities. Germany had last year provided the names of some Indians, having secret accounts in Liechtenstein's LGT Bank. These names were part of about 1,400 stolen bank account details purchased by Germany.

India, according to the finance ministry, has so far received over 9,900 pieces of information from several countries regarding suspicious transactions by Indian citizens, which are now under different stages of processing and investigation.

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RBI bars MMLF from accepting deposits for 6 months

"It was observed during inspection of the books of account of MMLF with reference to its financial position as on 31 March 2010, that the company has violated extant directions on the deposit acceptance:" RBI

The Reserve Bank of India (RBI) on Monday barred non-banking financial company Money Masters Leasing & Finance (MMLF) from accepting public deposits and selling its assets for six months for violation of directions on deposit acceptance.

“The RBI has prohibited with immediate effect Money Masters Leasing & Finance from accepting public deposits from any person in any form whether by way of fresh deposits or renewal of the deposits or otherwise as well as from selling, transferring, creating charge or mortgage or deal in any manner with its property and assets...” the apex bank said in a statement. The RBI said that the NBFC has been barred from undertaking such operations without prior permission of the RBI for a period of six months.

“It was observed during inspection of the books of account of MMLF with reference to its financial position as on 31 March 2010, that the company has violated extant directions on the deposit acceptance,” the statement said.

Besides, the city-based MMLF has been directed to repay existing deposits as and when they mature. It, however, has been allowed to carry on other business activities in accordance with law. The company, which specialises in hire-purchase and leasing, is also engaged in consumer finance and public vehicle finance. The firm had secured NBFC registration in 1998.

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