Regulations
SEBI extends bid deadline for verification job in Sahara case

SEBI has now decided to extend the deadline for bid submission to 21st December and would open the technical bids on the same day

 
New Delhi: Market watchdog Securities and Exchange Board of India (SEBI) has extended the deadline by one month for submission of bids by public sector banks and know-your-customer (KYC) Registration Agencies (KRAs) to conduct "in-person verification" of about three crore investors in the high-profile Sahara case to ascertain their genuineness, reports PTI.
 
SEBI had floated a tender in this regard on 2nd November and had earlier asked the public sector banks and KRAs to submit their applications by 22nd November.
 
However, SEBI has now decided to extend the deadline for bid submission to 21st December and would open the technical bids on the same day.
 
Earlier, the technical bids were scheduled to be opened on 22nd November, while a pre-bid meeting was held by SEBI with the interested parties on 7th November.
 
The selected 'In-Person Verification (IPV) Agency' would be mandated to interact "face-to-face" with all investors in the Sahara case to ascertain their genuineness. SEBI has been mandated by the Supreme Court to facilitate refund of about Rs24,000 crore with 15% interest to the bondholders of two Sahara group firms after ascertaining their genuineness.
 
In its order dated 31st August, the Supreme Court had asked SEBI to ascertain the genuineness of an estimated three crore bondholders of OFCDs (Optionally Fully Convertible Debentures) of two Sahara group companies (Sahara Housing Investment Corporation Ltd and Sahara Real Estate Corporation Ltd) and thereafter facilitate refund of the money with the interest.
 
In this regard, SEBI has decided to carry out in-person verification of these bondholders, for which it is seeking the services of public sector banks and KRAs.
 
The KRAs are authorised agencies to carry out KYC requirements for all the market entities, including brokerage firms and mutual funds.
 
The selected agency would have to meet the bondholders face to face to establish their existence, visit their given address to ascertain their residence proof and verify their original identity and address proofs vis-a-vis given details.
 
The IPV Agency would also have to get the copies of identity/address proofs signed by the bondholders and verify the documents related to investment in OFCDs vis-a-vis details provided by SEBI and its agencies.
 
SEBI is also in the process of appointing investigating agencies to assist it in this matter, while it is also hiring a Registrar and Transfer Agent (RTA) for investor data and payment processing related works in the case.
 
The RTA's job would involve scanning and verification of investor documents, setting up and managing of toll-free investor helpline and grievance redressal cell and processing of payments to the genuine investors.
 

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COMMENTS

Vikas Gupta

4 years ago

Sahara is a total fraud company. Now a days, its management is busy in transferring the funds from Schemes in Question by SEBI to its other schemes by its staff & Workers with a lot of incentives for them. Depositors must be warned about all these malpractices & Sahara must be penalised heavily for byepassing SEBI Orders.

RBI's Gokarn for dematerialisation to arrest rising gold demand

While global gold output has stayed stable at around 4,000 tonne per year, the domestic consumption of the yellow metal has doubled to 1,000 tonne annually since 1999, despite a massive rally in the prices, which is compounding the troubles for the central bank

 
Pune: Reserve Bank of India (RBI) Deputy Governor Subir Gokarn said there is a need to 'dematerialise' gold like any other financial product to reduce its physical imports, the rise of which has been blamed for the high current account deficit that is feared to touch new record high this year, reports PTI.
 
"It (high gold imports) is creating some macroeconomic stresses and so the challenge is to find ways to replicate the financial characteristics of gold without necessarily causing physically importing," Gokarn told the last day of the two-day annual Bancon.
 
The current account deficit or CAD has been rising on the back of record trade deficits, which in October jumped to a 12-year high of $21 billion on the back of rising oil and gold imports.
 
Reeling out the high gold import data, Gokarn said a working group headed by KUB Rao of RBI will shortly be coming out with its report on the ways to deal with the problem arising from high gold imports on macroeconomic front in the form of balance of payments.
 
He said while global gold output has stayed stable at around 4,000 tonne per year, the domestic consumption of the yellow metal has doubled to 1,000 tonne annually since 1999, despite a massive rally in the prices.
 
"More expensive gold is being imported in larger quantities which is compounding the troubles," he said.
 
As gold imports touched a record high last year, pushing up the current account deficit to a historic high of 4.2% in the year, the Reserve Bank has unveiled a slew of curbs on gold purchase and financing.
 
Last fiscal, there was a 39% rise in gold imports and in gross terms, it constituted for 80% of the current account deficit, which reached an all-time high of 4.2%, Gokarn said, adding the net gold imports constitute for 1.8-2.4% of GDP.
 
This spike in gold demand was in spite of the record price rally that the metal witnessed last fiscal.
 
It can be noted that in April the RBI brought down the loan to value or LTV that gold loan companies like Muthoot Finance or Manappuram Finance could offer just 60% of the market value, from a high of 85-90%.
 
In the 30th October credit policy, the RBI also banned banks from funding gold buying by gold loan companies and NBFCs.
 

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COMMENTS

Veeresh Malik

4 years ago

With all due respects to the gent suggesting demat on gold, the experiences people have with other demat saving products like equity, non-bank savings like EPFO or Mutual funds, or similar, is so miserable that placing hard solid gold on demat is like seeing the buffalo gone into the lake, to use a turn of phrase.

In troubled times like this, it is back to pure hard physical gold, or fixed deposits with banks. Even real estate is no longer the safe bet it was, clear title being a myth soo very often.

Parliament nod needed on FEMA rules for implementing FDI: CAIT

According to the Confederation of All India Traders, the union government's notification on FDI in multi-brand retail will be valid only if amendments made by the RBI in FEMA rules

 
New Delhi: The foreign direct investment (FDI) notification on multi- brand retail by the government will be valid only if amendments made by the Reserve Bank of India (RBI) in the Foreign Exchange Management Act 1999 (FEMA) rules are approved by Parliament, the Confederation of All India Traders (CAIT) has said, reports PTI.
 
"The FDI notification can be valid and effective only if the amendments made by RBI in rules and regulations of Foreign Exchange Management Act,1999 (FEMA) are approved by "each house" of Parliament which is an inherited provision in Section 48 of the FEMA Act," CAIT Secretary General Praveen Khandelwal said in a statement.
 
He added that the said provision is explicit and does not have ambiguity or discretion.
 
"The government is terming it merely as an executive order which does not need approval of Parliament is factually a distortion of facts," Khandelwal said.
 
The statement said that CAIT in a communication to all Parliamentary Party Leaders has drawn their attention to the provision of Section 48 under which such amendments must be passed within 30 days from the date of its introduction in Parliament.
 
As per parliamentary procedure any such amendment will go to Committee on Subordinate legislation of each house which will scrutinise the same and will submit its report to Presiding Officer of their respective house and then house will decide the issue, it said.
 
Khandelwal said that calling the notification an enabling policy for the states to decide whether to implement the same or not is misleading.
 
The statement said that the GATS agreement under WTO and 82 Bilateral Investment Promotion Treaties signed binds the Government to provide "national treatment" to foreign investor which implies that no discrimination can be made between a domestic company and the foreign investor.
 
"Therefore, the states have no choice," it added.
 

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