RBI tightens screws on non-operative NBFCs

"An NBFC which is in receipt of certificate of registration (CoR) must necessarily commence NBFC business within six months of obtaining CoR:” RBI circular

The Reserve Bank tightened the screws on non-operative non-banking financial companies (NBFCs), excluding the residuary ones, by asking to commence business within six months of obtaining certificate of registration (CoR) from it, failing which their licences will be cancelled automatically. "An NBFC which is in receipt of CoR must necessarily commence NBFC business within six months of obtaining CoR. If the business of NBFC is not commenced within six months...the CoR will stand withdrawn automatically," said an RBI circular.

RBI further, said it has noted that some NBFCs obtain registration from the bank, park their funds in fixed deposits with commercial banks, but do not commence NBFI activities for several years thereafter. "It is clarified, that the RBI issues a CoR for the specific purpose of conducting NBFI activities (and that) investments in fixed deposits cannot be treated as financial assets and receipt of interest income on fixed deposits with banks cannot be treated as income from financial assets, as these are not covered under the activities mentioned in the definition of financial institution under Section 45I(c) of the RBI Act, 1934.

"Besides, bank deposits constitute near money and can be used only for temporary parking of idle funds, and/or in the above cases, till commencement of NBFI business." Under Section 45IA (1) of the RBI Act, 1934, no NBFC shall commence business or carry on the business of a non-banking financial institution without obtaining a CoR, and having a net owned fund of Rs25 lakh, which was increased to Rs200 lakh with effect from 21 April 1999.

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Ashoka Buildcon arm executes concession agreement for NHAI project

The project will carry on the business of designing, building, financing, operation and maintenance rehabilitation and upgradation of four laning of Cuttack - Angul Section of NH-42.

Ashoka Cuttack Angul Tollway, a subsidiary of Ashoka Buildcon has executed a concession agreement with National Highways Authority of India ("NHAI") on 14 March 2012, for the project to carry on the business of designing, building, financing, operation and maintenance rehabilitation and upgradation of four laning of Cuttack - Angul Section of NH-42 from Km 0.000 to Km 112.000 in the state of Orissa under NHDP Phase II to be executed as BOT (toll) on DBFOT pattern.

In the early afternoon, Ashoka Buildcon was trading at around Rs193 per share on the Bombay Stock Exchange, 1.31% up from the previous close.

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Liberty Phosphate to expand capacity to 9,24,000 MT

On implementation of capex plans, Liberty Phosphate will run at an installed capacity of 9,24,000 MT per annum of SSP as well as GSSP.

Liberty Phosphate, an ISO 9001:2008 company, the largest producer and supplier of single super phosphate (SSP) - powder and granulated (GSSP) -  in the country with its multi-location manufacturing units is planning to enhance its production capacity from 5,62,000 MT to 9,24,000 MT per annum.

The Udaipur (Rajasthan) unit of the company is operating at existing capacity of 2,64,000 MT per annum of SSP/GSSP. The company has enhanced the existing capacity of 1,00,000 MT to 1,98,000 MT at its Nandesari (Gujarat) unit in February 2012.

The company has applied for enhancement of capacity at its unit in Kota (Rajasthan) from 1,32,000 MT to 1,98,000 MT per annum of SSP as well as GSSP. The terms of reference has been received from the state level environment impact assessment authority in Rajasthan. Environment clearance is under process and is expected to be completed by the end of May 2012.

The company has applied for enhancement of capacity from 66,000 MT to 1,32,000 MT per annum at its unit in Pali (Maharashtra). The terms of reference have been received from the state level environment impact assessment authority and the public hearing is under process.

To cater to the needs of the farmers to a larger extent and to unleash the marketing potential of the region the company has decided to install SSP plant of 1,32,000 MT per annum capacity at Rae Bareilly (Uttar Pradesh). The environment clearance has been completed.

On implementation of above plans, the company will run at an installed capacity of 9,24,000 MT per annum of SSP as well as GSSP catering to the requirement of farmers of most states in the country.

In the early afternoon, Liberty Phosphate was trading at around Rs65.25 per share on the Bombay Stock Exchange, 1.87% up from the previous close.

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