Banking
RBI sets up panel for strengthening rural credit

The panel headed by NABARD Chairman Prakash Bakshi will review existing credit structure and also explore ways to strengthen cooperative credit architecture in rural areas


Mumbai: The Reserve Bank of India (RBI) has constituted a committee to suggest ways to strengthen the rural cooperative credit structure in the country, reports PTI.
 
The panel headed by NABARD Chairman Prakash Bakshi will review the existing Short Term Cooperative Credit Structure (STCCS), focusing on structural constraints in rural credit delivery system.
 
It will also explore ways to strengthen the rural cooperative credit architecture.
 
The seven-member panel will make an in-depth analysis of the STCCS and examine various alternatives with a view to reducing the cost of credit, the RBI said in a release.
 
It will also look at the feasibility of setting up of a two-tier STCCS as against the existing three-tier structure.
 
STCCS target the credit requirement of the small and marginal farmers in the country.
 
"The Committee will submit its report within three months from the date of its first meeting," it said.
 
According to terms of reference, the committee will mainly assess the role played by state and district cooperative banks in fulfilling the requirement of agriculture credit.
 
It will identify cooperative banks that may not be sustainable in the long run even if some of them have met the diluted licensing criteria for the time being, the release said.
 
It will also suggest pro-active measures needed to be taken by cooperative banks, government, and the RBI, it added.

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India, Monaco ink tax information exchange agreement

Under the agreement with Monaco, there is a specific provision for providing banking and ownership information and the requesting state has to provide some minimum details

 

New Delhi: India has entered into an agreement with Monaco for exchange of information that will allow the two countries to check tax evasion and money laundering, reports PTI.

"Government of India and Government of Principality of Monaco have signed a Tax Information Exchange Agreement (TIEA) yesterday," an official statement said today.

This is the ninth TIEA being signed by India.

Under the agreement with Monaco, there is a specific provision for providing banking and ownership information and the requesting state has to provide some minimum details about the information requested.

"Information must be foreseeably relevant to the administration and enforcement of the domestic laws of the contracting Parties concerning taxes and tax matters covered by the agreement," the statement said.

However, information is to be treated as secret and can be disclosed to only specified person or authorities, which are tax authorities or the authorities concerned with the determination of tax appeal, it added.

The agreement was signed by the Minister of State for Finance SS Palanimanickam from Indian side and Counsellor of Government for Finances and Economy Marco Piccinini from Monaco's side.
 

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Exim Bank raises $500 million from overseas investors at 4% interest

At 3.48% above the US treasuries, Exim Bank's bond issue beats the $1.25-billion bond sale that State Bank of India sold at 3.75% over the US government bonds, and makes it the cheapest ever five-year money raised by a domestic financial institution till date

 
Mumbai: The Exim Bank has successfully closed a benchmark dollar-denominated overseas five-year bond sale programme, raking in $500 million from overseas investors at a coupon of just 4% -- the cheapest ever by an Indian company at this tenure, reports PTI.
 
At 3.48% above the US treasuries, this bond issue beats the $1.25-billion bond sale that State Bank of India sold at 4.125% coupon or 3.75% over the US government bonds, and makes it the cheapest ever five-year money raised by a domestic financial institution till date.
 
"Yes, we have successfully closed a benchmark bond sale programme, raising $500 million from overseas investors.
 
The issue was oversubscribed five times or $2.5 billion.
 
Priced at a coupon of 4%, this is the cheapest ever dollar-denominated five year bond sale by a domestic financial institution to date," Exim Bank Chairman and Managing Director TCA Ranganathan told PTI.
 
The bank gave an initial pricing guidance of 3.75% over the US T-bills. But final pricing closed much lower, as the markets have been waiting for some quality Indian paper, said a note from StanChart, which was one of the lead managers and book-runner to the issue along with Citigroup.
 
Exim Bank's senior fixed-rate notes makes the third $bond transaction for the Exim Bank since 2010 and marks the largest-ever $bond transaction for the bank, Ranganathan said.
 
The issue has a Baa3/BBB- rating from agencies, including S&P while the SBI issue had a Baa2/BBB- rating.
 
The issue maturing in August 2017 traded as tight as 3.48-3.55% over US treasuries, while the SBI bond traded at 3.60%, despite a weaker broader market, the bank said.
 

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