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Talgo completes third Delhi-Mumbai trial
The much-awaited Spanish-made Talgo high-speed train reached the Mumbai Central Terminus from New Delhi on its third and final trial run, an official said on Tuesday.
 
The train, which left New Delhi on Monday evening, completed the trial run despite delays on account of heavy rains which flooded railway tracks in the Gujarat-Maharashtra border area.
 
The Talgo, with nine lightweight coaches, is expected to cut down travel time between New Delhi and Mumbai by around four hours - from the existing 16 to 12 hours - though exact schedules are not yet finalized.
 
The train left New Delhi at 7.55 p.m. on Monday evening and reached Mumbai Central shortly after 11 a.m., against the expected arrival time of 8.31 a.m., travelling at speeds averaging 130 kmph.
 
As the gleaming train passed by certain stations en route on the Mumbai suburban sector, many commuters were seen excitedly waving, screaming with joy and clicking pix of the zooming Talgo.
 
Further trials of this train are expected to be undertaken on August 5, 8 and 14 on the Mumbai-Delhi-Mumbai sector with higher speeds on curves and increasing to 140 kmph and 150 kmph with each trial.
 
After further trials and clearances from the Commissioner of Railway Safety, the train is expected to be commissioned by Western Railway around March 2017.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

 

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Pay panel arrears this month, panel on perks to meet this week
The first meeting of the committee appointed to look into the allowances recommended by the 7th Pay Commission is scheduled this week while the payment of arrears will commence from this month, Finance Secretary Ashok Lavasa has said.
 
"The decision to defer the decision pertaining to allowances and refer it to a committee was taken basically because there are 196 or so allowances, and the recommendations amount to major changes in the allowances," Lavasa said. 
 
"So, the government decided that the committee of various officers should carefully examine and then give their decision. There are many ministries involved. Various categories of employees, various types of allowances," the Finance Secretary said.
 
"The Pay Commission had recommended that so many allowances should be abolished and that so many should be subsumed. The committee will have its first meeting this week. It will look into these considerations. The government has given four months," Lavasa told IANS in an interview.
 
"As regards the distribution of arrears, it will happen in August."
 
After the recommendations of the 7th Pay Commission were largely accepted by the Union cabinet in June, it was decided to constitute a panel headed by the Finance Secretary to specifically look at the suggestions on allowances.
 
The commission had examined a total of 196 existing allowances and, by way of rationalisation, it had recommended 51 allowances be abolished and 37 others be subsumed. Due to its wide impact, a panel was formed to take a holistic view on the changes proposed.
 
"The committee will complete its work in a time-bound manner and submit its reports within four months. Till a final decision is taken, all existing allowances will continue to be paid at the existing rates," a cabinet note had said.
 
Asked about the impact of Pay Commission recommendations on the budget and, more specifically, the fiscal deficit, the Finance Secretary said this was an exercise that will start soon. 
 
"The Pay Commission report had been submitted before the budget. The budget did provide for some additionality," Lavasa said. 
 
"As we go along at RE (revised estimate) stage, we will have to see what is the kind of impact it will have on the fiscal deficit keeping in view the revenue generation which is taking place. It is too early to say. We will review at that time," he added.
 
It was estimated by the Pay Commission that the additional financial impact on the exchequer due to the implementation of all its recommendations in 2016-17 will be Rs 102,100 crore. This apart, it had estimated an additional implication of Rs 12,133 crore on account of arrears.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

 

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Why NBFCs may not be interested in on-tap banking license
The Reserve Bank of India (RBI) came out on Monday with its guidelines for 'on-tap' licensing of universal banks in the private sector. A minimum start-up capital of Rs500 crore; minimum promoter holding of 40% (lock-in period five years); listing of the shares within six years; and promoters' holdings to be brought down to 15% in 15 years are some of the stipulations laid down by the regulator for obtaining a bank licence on tap. However, this may not find more takers, says a report.
 
In a research note, Religare Capital Markets Ltd, says, "We do not see many non-banking finance companies (NBFCs) converting into banks given the stringent guidelines and statutory norms. Thus, though on-tap, licensing will be limited."
 
"The RBI has barred the entry of NBFCs that are part of a group with total assets of over Rs5,000 crore and has non-financial businesses accounting for over 40% of total assets or gross income; this, in our view, will exclude NBFCs like Bajaj Finserv, Mahindra & Mahindra Financial Services Ltd (MMFS) and Cholamandalam investments and Finance Co Ltd (CIFC). Large industrial houses have also been disqualified as eligible entities, but have been permitted to invest up to 10% in banks. This means that L&T Finance cannot convert into a bank with more than 10% holding by Larsen & Toubro (L&T)," the report says.
 
The RBI has made it non-mandatory, the formation of non-operative financial holding company (NOFHC) if promoters are individuals, and standalone promoting or converting entities. "In our view," Religare says, "While this is positive for IDFC–IDFC Bank like structure, IDFC will have to apply for a special exemption since the rules do not permit retrospective changes."
 
However, the central bank has made NOFHC compulsory for promoters with group entities. RBI has clarified that individual promoters, promoting entities, and converting entities that have other group entities, can set up the bank only through the NOFHC route. In such cases, the promoter or promoter group need to own a minimum 51% in the NOFHC.
 
Under separate entity, only specialised activities would be allowed. NBFCs will have to transfer all lending businesses to the new bank, with only specialised activities, like credit cards, to be done separately under a NOFHC. "We think large NBFCs would refrain from applying given the onerous statutory compliance requirements," Religare says.
 
As per the guidelines, promoters or NOFHCs need to own a minimum 40% equity in the bank, with a lock-in period of five years. The holding needs to be brought down to 30% within 10 years and 15% within 15 years from the date of commencement of business of the bank. Foreign shareholding is permitted up to 74%, subject to the minimum promoter shareholding requirements.
 
The RBI also stated that senior-level individuals and professionals with 10 years of experience in banking and finance are eligible to promote a bank. This implies that senior managers of well-run banks in India may be in the fray to set up new banks.
 

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