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LIC says ready to pick SUUTI's stake in Axis Bank, L&T and ITC if asked

SUUTI, created in 2002 after the then UTI was wound up, owns stakes in ITC, Axis Bank and L&T, which the government is planning to en-cash as its effort to meet the fiscal deficit target

 
Mumbai: State-run Life Insurance Corp of India (LIC) on Friday said it has not been approached by the government to pick up stakes in Axis Bank, L&T and ITC, currently held by the Special Undertaking of Unit Trust of India (SUUTI), but added if it is so asked, it will definitely look at it, reports PTI.
 
"As far as LIC is concerned, we have not been approached (to buy the government's stakes in Axis Bank, L&T and ITC). In case they approach us, we will definitely have a look at it," DK Mehrotra, chairman of LIC told reporters on the sidelines of a capital markets summit organised by industry body FICCI.
 
SUUTI, created in 2002 after the then UTI was wound up, owns strategic stakes in three listed blue-chip entities: ITC (11.54%), Axis Bank (23.6%) and L&T (8.3%).
 
Besides, SUUTI also owns significant stakes in unlisted companies such as the Stock Holding Corporation of India (SHCIL), in which it owns 16.96% that is valued at about Rs300 crore.
 
The government is planning to en-cash these holdings which are worth over Rs40,000 crore, as part of its efforts at meeting the fiscal deficit target by divestment.
 
The plan is to sell the SUUTI stakes to an special purpose vehicle (SPV). The SPV holding will not pledge shares but will borrow funds by way of negative liens, under which it cannot sell the shares without the permission of lenders and the government.
 
When asked about the 10% equity exposure cap, Mehrotra said: "The corporation has been approaching the regulators and the finance ministry on this issue for quite some time. I think, both of them have taken it very positively. Hopefully, something should come and we will get some headroom".
 
LIC, which had bailed the government last March when the follow-on option of ONGC was bombed by picking up almost the entire stake worth over Rs12,000 crore, plans to invest Rs2.4 lakh crore this fiscal.
 
"We propose to invest Rs2.4 lakh crore this fiscal and have invested Rs65-70,000 crore so far," Mehrotra said, adding of the total investment, 10-15% constitute pure equity investments out of which it has invested Rs7,000-Rs8,000 crore as of now.
 

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Excessive judicialisation will deprive flexibility in CIC under RTI: Mishra

According to CIC Mishra, excessive judicialisation of information commissions will deprive the commission of this flexibility and the society must decide if this is the right path

 
New Delhi: Excessive 'judicialisation' of Information Commissions across the country would deprive them of a flexible style of functioning, Chief Information Commissioner Satyananda Mishra said on Friday, reports PTI.
 
Speaking at the Central Information Commission's annual convention, Mishra said the approach of the Commissions, including the state and centre, in all these years has been to act like an umpire standing right on the field along with the players and not sitting on a pedestal and pronounce oracles.
 
"Openness of approach, informality in style and simplicity of systems have characterised the functioning of all the commissions....Excessive judicialisation of information commissions will deprive the commission of this flexibility. The society must decide if this is the right path," he said.
 
The Supreme Court had recently termed the Commissions as quasi-judicial bodies and directed the government that Chief Information Commissioner at the Centre or State level should only be a person who is or has been a Chief Justice of the High Court or a judge of the Supreme Court of India.
 
Asking the government to amend the Right to Information (RTI) Act, a bench of of justices AK Patnaik and Swatanter Kumar had said that people from judicial background be also appointed as members of the Central and State Commissions which is to be done after consulting with the Chief Justice of India (CJI) and Chief Justice of the respective High Courts. 
 
Mishra said the efforts of the Commission to ensure complete mandatory disclosure by public authorities have not succeeded.
 
"All our efforts to ensure proactive disclosure as mandated under the RTI Act have been ineffective. Seven years after the enactment of the law, public authorities both at the state and the Centre, have not made complete disclosures which they were mandated to do in 120 days," the CIC said.
 
He said the efforts to ensure organised record keeping as mandated in the law have not been met with much success.
 
"We have been exhorting government authorities both at the Centre and the states to appoint responsible information officers, train them regularly and most importantly to organise record keeping at all levels. We have not met with much success," Mishra said.
 
The CIC said in the last seven years since the RTI Act came into being, the civil society attention has moved to new issues areas of concerns, consequently there is palpable decline in their engagement with issues related to right to information which was true for media as well.
 
He said media and civil society must not lose sight of the RTI Act in the process.
 
"Bulk of information received from public authorities is used for personal grievances. Many a times, information is also sought without any ostensible purpose. This is not a happy sign. Each time we seek any information from any public authority, we deprive someone else of the opportunity to make use of corresponding resources," he said.
 
Mishra said there are several instances of people making absolutely frivolous request or seeking information as a hobby or just to harass and blackmail others.
 
"It should be avoided not only it gives bad name to RTI Act but also because it increases wasteful expenditure of public authorities. Civil society should play an important role in this by training the RTI applicants," he said. 
 

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Is a pre-approved home loan a good option?

How about the idea of getting a home loan approved even before you have finalised the property? But is this free of all hassles? Are there any reasons for not opting for one?

 
Imagine yourself wanting to buy your dream home. You zero in the property and apply for a home loan. Now, what happens if the property you choose for yourself gets sold off to someone else by the time your loan gets approved? Or, what if your loan application gets rejected? This is where pre-approved loan comes into picture.
 
Often you would have got calls from banks, trying to convince you to take a pre-approved loan with lower rate of interest, minimum documentation and faster processing, typically ones like 48 hours.
 
A pre-approved loan is essentially an in-principle approval given to you by a bank/financing institution on basis of your profile. The factors that the bank looks at when judging your EMI (equated monthly instalment) paying capacity include your income status, the current EMI outflow, your payback history and your net-worth. The bank then approves of a certain amount that you can avail as home loan, within a certain time period, usually six months.
 
Although it sounds great to have a loan approval letter on your palm even before you finalise the property you wish to buy, there are glitches you need to look out for-there are matters you really need to give a thought to before deciding whether to avail it or not.
 
A pre-approved loan is not guaranteed. Banks have the final discretion on whether or not to disburse the approved amount. For example, you select a property of your choice and the bank does not lend for properties of that area your house falls in, the bank has all the right to reject the final application on that basis.
 
Although the bank claims to have ‘approved’ the loan, the interest rates and other important terms and conditions are still at sea—they are ‘indicative’. You won’t know how much you require paying back and within what time frame. Some banks do work out a few terms and conditions at the time of pre-approval, but with a “subject to change at discretion of the bank” clause. Besides that, all documents related to loans need to be submitted again at the time of disbursal, without which banks have been known to reject the pre-approved loan. This effectively leads to an additional documentation burden on you.
 
A fact that you require to take into consideration is the amount that has been pre-approved versus the amount you actually require once you chose the property. If the final amount is higher, you require making a higher down payment since you have a limited chance to negotiate with the bank now-your budget could go haywire. 
 
Another factor you require to keep in mind is the type and amount of indicative interest rates mentioned on the letter. These rates are usually floating. In case you wish to take a loan at fixed rate of interest, pre-approved loan isn’t for you.
 
The costs involved in a pre-approved loan are never refundable. The processing fee involved is levied irrespective of whether you finally avail the loan or not. Loans are valid for a specific time frame—if you do not put up the ‘disbursal’ application within that specific period, the pre-approval gets null and void and you require to apply all over again the next time, and the fee involved will be levied again.
 
Last but not the least; your credit gets blocked to the extent of amount you have taken the pre-approval for. If during the period that your pre-approved loan is valid for, you require a personal or an education loan, your payback capacity will be calculated taking into consideration the pre-approved loan. In addition to that, if you have put up a pre-approval application numerous times, you get tagged as someone constantly looking out for credit, and that reduces your credit score.
 
You should go in for a pre-approved loan only once you have shortlisted the property of your choice. A pre-approved loan does make the process faster. Another added advantage if that you can negotiate with your builder on the basis of funds you already have in your pocket, the builder may bring down prices for you, who has ready cash to pay instead of someone who still has to raise it. 
 

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