Urban cooperative banks which have less than 5% of NPAs and comply with capital to risk-weighted assets ratio norms may declare dividends without prior permission from the central bank
Mumbai: The Reserve Bank of India (RBI) said urban cooperative banks (UCBs) which have less than 5% of non-performing assets (NPAs) and comply with capital to risk-weighted assets ratio norms may declare dividends without its prior permission, reports PTI.
"It has now been decided to revise the criteria for declaring dividend without prior permission of the Reserve Bank," RBI said in a notification.
Further, it said the UCBs should have made all required provisions for NPAs, investments and others assets as per prudential norms.
The dividend should be paid out of the net profit and after making all statutory and other provisions and adjustment for accumulated losses in full, it said.
"UCBs complying with all the above parameters except net NPA and desirous of declaring dividend may approach the respective regional office of the RBI for permission for declaring dividend provided the net NPA is less than 10%," it added further.
Earlier, there was a requirement of net NPA of less than 10% for declaring dividend.
With rupee losing about 25% in the last one year and increasing redemption costs, several companies with FCCBs on their balance sheets are keen to retire these loans
Mumbai: The Reserve Bank of India (RBI) has extended the scheme for corporates to get rid of their overseas loans by pre-paying them as weak rupee increases their debt obligation, reports PTI.
The pre-payment of foreign currency convertible bonds (FCCBs) "shall come into force with immediate effect and the entire process of buyback shall be completed before 31 March 2013 after which the scheme lapses," an RBI circular said.
With rupee losing about 25% in the last one year, the redemption costs of overseas loans availed by Indian corporates has increased significantly.
Under these circumstances, several companies with FCCBs on their balance sheets are keen to retire these loans.
For example, Suzlon and Educomp are amongst the ones who are under the process of retiring their FCCB obligations.
Last month, drug firm Strides Arcolab had redeemed outstanding foreign currency bonds worth $80 million.
"On a review, it has been decided to continue the scheme of buyback of FCCBs subject to certain modifications," it said.
Indian firms can now buyback the FCCBs at a minimum discount of 5% on the book value utilising their foreign currency funds under the automatic route, as against 8% earlier, it said.
In case the Indian company is planning to raise a foreign currency borrowing for buyback of the older FCCBs, all foreign exchange regulations relating to foreign currency borrowing should be complied with, it added.
The extension of the window allows greater freedom and leeway to Indian companies. FCCBs witnessed a huge surge during 2006-07. However, the global economic meltdown on 2008-09 impacted most of the companies.
Recently, rating agency Standard & Poor's said that 56 Indian companies, which have to pay back $5 billion worth of foreign debt this calendar year, could see their interest burden going up by $700 million if they chose to reschedule these obligations.
These companies had issued these FCCBs between 2006 and 2008 (and mostly in 2007), before the Lehman fall when the stock prices where at record high, and the rupee was trading at 48 to the dollar.
Most of these bonds are denominated in the US dollar and hence the mounting worries.
The report said the recent rupee fall has added to the woes. Most of the FCCBs that mature in 2012 were issued in 2007-08, when the rupee was at about 42 to a dollar. The rupee has lost more than 30% against the American currency since then.
IRCTC said the agreement with Cox & Kings was terminated due to breach in the agreement and poor occupancy rate of the train whose services were launched at an estimated cost of Rs35 crore
New Delhi: The Supreme Court dismissed an appeal by a UK travel company Cox & Kings contesting the decision to terminate a joint venture agreement with the Indian Railway Catering & Tourism Corporation Ltd (IRCTC) for operating super luxury tourist train 'Maharaja Express', reports PTI.
In its appeal, Cox & Kings challenged the Delhi High Court order upholding the decision of IRCTC to terminate the agreement for operating the train.
A bench of justices Altamas Kabir and J Chelameshwar while declining to interfere with the high court order, however, said the disputing parties were at liberty to approach the Arbitration Tribunal to resolve their disputes.
IRCTC had maintained that the agreement was terminated due to breach in the agreement and poor occupancy rate of the train whose services were launched at an estimated cost of Rs35 crore.
The train launched in 2010 is dubbed as India's equivalent to the Orient Express of Europe, with a passenger capacity of 88, promises to offer an unforgettable ride with kaleidoscopic view of the landscape through its panoramic window and deluxe carriages with contemporary amenities, crisscrossing through Delhi, Agra, Ranthambore, Jaipur, Bikaner, Udaipur, Vadodara and Mumbai.
Cox & Kings had said the termination of the agreement was illegal and claimed that it has invested more than Rs15 crores.
The Delhi High Court had rejected Cox & Kings plea following which it appealed in the apex court.
Dismissing the appeal, the apex court said, "It is no doubt true that the petitioner has invested large sums of money in the project, but that cannot entitle it to pray for and obtain a mandatory order of injunction to operate the train once the lease agreement/arrangement had been terminated.
The court said it was unable to accept the submission that the agreement was akin to a partnership.
"Such submission had been rightly rejected by the Division Bench," Justice Kabir writing the judgement said.