Willful defaults a third of Punjab National Bank NPAs

Of Rs 10,869 crore, top 10 defaulters together owe the bank Rs 3,554 crore

Close to a third of Punjab National Bank’s gross non-performing assets (NPAs) of Rs 34,338 crore have resulted from willful defaults, the lender has said. Of this amount of Rs 10,869 crore, the top 10 willful defaulters together owe the New Delhi-headquartered bank Rs 3,554 crore.

As at the end December last year, PNB had identified 904 companies as being willful defaulters and filed cases against some of them. The number at the end of September 2015 was 764 companies and the value of unpaid loans then was Rs 9,204 crore.

Following a speedy clean-up of its portfolio in the wake of a directive from the Reserve Bank of India (RBI), PNB reported slippages of Rs 17,655 crore in Q3FY16 and a pre-tax loss of Rs 858 crore. The slippages left the public sector bank’s impaired loans at 17.4%, comprising 8.5% gross NPAs and 8.9% standard restructured loans.

PNB has made loan loss provisions of Rs 18,758 crore in the three years 2012-13, 2013-14 and 2014-15.

In the current year provisions are expected to be of the order of Rs 9,800 crore; in the nine months to December the amount provided was Rs 7,089 crore. Between FY11 and FY15, the government infused Rs 3,457 crore of capital.

The PNB stock’s market value has been eroded by approximately Rs 12,000 crore since the start of September. The stock closed at Rs 75.65 on the BSE on Monday, down 0.66% over Friday’s close. The stock is trading at a price to book value (P/BV) of 0.29 times for estimated FY17 book value.

PNB’s top 10 wilful defaulters include names like Winsome Diamonds & Jewellery (Rs 900.37 crore), Forever Precious Jewellery & Diamonds, Zoom Developers (Rs 747.98 crore), National Agricultural Cooperative Marketing Federation of India or Nafed (Rs 224.26 crore) and S Kumar Nationwide (Rs 146.82 crore). While the bank did not comment on the classification of these exposures, all the accounts are understood to have been classified as NPAs and provided for.

Last year in June, the Enforcement Directorate (ED) had attached 1,280 acres of Zoom Developers’ land in the US worth Rs 1,000 crore. According to reports, Zoom has allegedly diverted funds borrowed from banks to 350-odd subsidiaries, related parties based in India and abroad, and to purchase jewellery for the wife of its promoter, Vijay Chaudhary. In a separate case, several PNB board members were questioned about loans to Winsome Diamonds and its subsidiaries.

Interestingly, the list as on December 31, 2015, does not include Kingfisher Airlines, which PNB recently said has been declared willful defaulter. “The company is in consultation with its legal counsels to challenge the decision by taking appropriate legal action that may be required in this regard,” UB (Holdings) had said in a stock exchange filing.

According to RBI guidelines, a borrower is termed a willful defaulter if he has defaulted in meeting the repayment obligations to the lender even when he has the capacity to repay, or has not utilised the money from the lender for the specific purposes for which finance was availed and has diverted the funds for other purposes.

KC Chakrabarty was chairman and MD of the bank between 2007 and 2009 and KR Kamath was CMD between 2009 and 2014.

Source: http://www.financialexpress.com/article/economy/wilful-defaults-a-third-of-pnb-npas/214853/

 

Rs 15-lakh cr investment promises at Make in India

The six-day business expo Make in India Week has generated investment commitments worth Rs 15.2 lakh crore for the country, the department of industrial policy and promotion (DIPP) said on Thursday at the event’s closing ceremony. Around 30% of these are foreign investment commitments.

Maharashtra generated more than half the total tally, inking MoUs worth nearly Rs 8 lakh crore, expected to generate 30 lakh jobs. Within the state, the Konkan division, which includes the Mumbai Metropolitan Region, cornered the largest share of MoUs, worth over Rs 3.25 lakh crore. The deprived regions of Vidarbha and Marathwada generated MoUs worth Rs 1.5 lakh crore. Deals for Western Maharashtra and Khandesh totalled Rs 50,000 crore and Rs 25,000 crore.

The big question is how many of these commitments will translate into actual projects. “We expect the conversion rate to be over 80% in the next three years. These are investment commitments, which means pre-clearance work has been done,” said DIPP secretary Amitabh Kant. Besides manufacturing, it had also focussed on innovation and start-ups and created a platform where corporates, policymakers and political leaders could converge, he said.
Considered the largest multi-sector business fair in Asia, Make In India Week was aimed at showcasing India’s manufacturing sector. It generated 8.9 lakh visitors across 102 countries, the DIPP said. It played host to 20 foreign dignitaries, including two prime ministers. Over 9,000 Indian companies and over 2,000 foreign companies participated.

Source: http://timesofindia.indiatimes.com/business/india-business/Rs-15-2L-crore-for-India-8-for-Maharashtra-and-3-3-for-Konkan-promised-at-business-expo/articleshow/51043676.cms?

StartUp India and Viacom18 join hands

Viacom18, the television media house that owns and runs channels Colors and MTV, has signed an agreement with the Union government’s department of industrial policy and promotion’s Start-Up India project.

It will launch a year-long ‘outreach programme’ for entrepreneurs, called MTV Kickstart. The initiative will include activities on-ground, digital communication and a TV reality show.

While the Viacom18 brand attached to the programme is MTV, the network’s youth brand, all entities under the former’s umbrella will be mobilised.

The multi-platform initiative is to reach out to young and aspiring entrepreneurs through multiple touch-points across 300 colleges. Around 10 Start-Up Festivals, two-day events in tier-1 & 2 cities, will be organised, allowing youth to interact with top entrepreneurs and investors.

Amitabh Kant, secretary of the government’s department, said: “This will help us engage with dynamic youth and inspire a new generation to follow their dreams and become successful entrepreneurs.”

“The programme will look at a variety of start-ups — in tech and engineering, in the social space, in art and culture and, could be, in the media, too. We are working on the amount of seed money. It will come from a combination of entities across sponsors and VC (venture capital entities). One of the things we want to do is provide mentorship. It becomes critical in making the ideas commercially viable,” says Sudhanshu Vats, group chief executive of Viacom18.

The reality show will go on air in the third quarter of this calendar year. The format would mostly be developed in-house by the network and include a competition, where shortlisted start-ups or entrepreneurs from various on-ground activities under the programme are to compete before a jury for home seed funding.

“Through a process of auditions, we will shortlist the contestants, who will then be participants in the televised reality show. We’ll end the process with an awards show, also televised. The idea is not to make it too formal and intimidating. The MTV brand will help with this. While it’s not frivolous, it will help ease the contestants. It can be quite intimidating for anyone with an idea who does not know much about setting up a business (to present the idea). So, we are looking at people who don’t yet have a start-up but have ideas that can be turned into businesses,” says Ferzad Palia, head of youth and English entertainment at Viacom18.

The network is in talks with brands which want to market to youth and will soon announce the commercial partners. These brands will get visibility on all platforms the outreach programme is present on and across the Viacom18 network.

In December 2015, Zee Bangla, in association with the West Bengal government, launched Egiye Bangla, a start-up reality show. The format was similar to Shark Tank, a reality show for start-ups on the ABC television network in America. Each round had five contestants and each pitched his idea to investors. The latter included Anjan Chatterjee of Speciality Restaurants; Chandra Shekhar Ghosh, managing director of Bandhan Bank, and Ashok Banerjee, a professor at IIM-Calcutta. The show was aired in the 6–7 pm slot on Sundays and launched with 744,000 impressions on television viewers on December 6, 2015, and clocked 441,000 average impressions or TV viewership through the season, according to data from the Broadcast Audience Research Council of India.

RBI asks income tax assessees to pay dues in advance, 29 banks authorized to accept payments

The Reserve Bank appealed to income tax assessees to pay dues in advance of the due date as well use alternate channels of authorized banks to avoid the rush during end of March.

“Pay I-T dues in advance at RBI or at authorized bank branches. Appeal to income tax assessees to remit their income tax dues sufficiently in advance of the due date,” RBI said in a release.

“It is observed that the rush for remitting Income-Tax dues through the RBI has been far too heavy towards the end of March every year and it becomes difficult for the RBI to cope with the pressure of issuing receipts although additional counters to the maximum extent possible are provided for the purpose”, it said.

RBI said assessees can use alternate channels like select branches of agency banks or the facility of online payment of taxes offered by these banks.

A total of 29 agency banks have been authorized to accept payments of Income-Tax dues. The authorised banks include SBI and its five associates, HDFC Bank, ICICI Bank, Axis, Bank, Punjab National Bank, Bank of Baroda, Bank of India, Indian Overseas Bank.

Among others are Corporation Bank, Dena Bank, Canara Bank, Central Bank of India, Syndicate Bank and others.
RBI said by remitting dues at the designated banks will obviate the I-T assessess’ inconvenience in standing in long queues at the RBI offices.

 

Source: http://www.firstpost.com/business/rbi-asks-income-tax-assessees-to-pay-dues-in-advance-29-banks-authorized-to-accept-payments-2628134.html?utm_source=FP_CAT_LATEST_NEWS

Tax refunds of Rs 1 lakh cr issued so far in FY16: Adhia

The move is aimed at reducing taxpayer grievances and promoting tax-friendly environment

The Income Tax department has issued refunds worth Rs 1 lakh crore till January in the current fiscal, the Finance Ministry said today.

“Income Tax department has so far issued refunds of Rs 1 lakh crore to 1.75 crore assessees in 10 months of 2015-16 fiscal,” Revenue Secretary Hasmukh Adhia tweeted.

Aimed at reducing taxpayer grievances and promoting tax-friendly environment, Central Board of Direct Taxes had in December asked officers to issue refunds of amounts less than Rs 50,000 expeditiously.

CBDT had also directed field officers make refunds of up to Rs 5,000. In addition, it directed that refunds, which also have cases of dues of up to Rs 5,000, may be issued without any adjustment of outstanding arrears.

“This (Refund) has created major relief to tax payers. This demonstrates Government’s intention to create a tax-friendly environment,” Adhia said.

Source: http://www.business-standard.com/article/pti-stories/tax-refunds-of-rs-1-lakh-cr-issued-so-far-in-fy16-adhia-116020800506_1.html

RBI proposes easier access to foreign capital for start-ups

The Reserve Bank of India (RBI), in its sixth bi-monthly monetary policy statement, has proposed steps to improve ease of doing business for start-ups through easier access to foreign capital and by enabling smoother transfer of ownership. RBI Governor Raghuram Rajan said the central bank wants to simplify the process and will create an enabling framework for attracting foreign venture capital (VC).

“We are supporting the start-up process by making it easier to raise (capital), often from abroad, but also simplify the compliance with regulations, including putting forms online,” Rajan said during the post-policy press conference on Tuesday.

For easing cross-border transactions, RBI has proposed (in consultation with the government of India) that in case of transfer of ownership of a start-up, permitting receipt of the consideration amount on a deferred basis could be done. It has also proposed to enable escrow arrangement or indemnity arrangement up to a period of 18 months.

In addition, RBI has also proposed (in consultation with the government) to permit start-ups access to rupee loans under the external commercial borrowings framework with relaxations of eligible lenders. It is also looking at issuing innovative foreign direct investment (FDI) instruments like convertible notes by start-ups. Further, RBI is looking into the proposal of issuing shares without cash payment through sweat equity or against any legitimate payment owed by the company, the remittance of which does not require any permission under the Foreign Exchange Management Act (Fema).

Harish H V, partner, Grant Thornton India LLP, said these measures are for helping start-ups in their operations and fundraising. “We look forward to further relaxations around convertible notes as promised. These steps, together with the start-up action plan and more initiatives expected from the ministry of corporate affairs and the Budget, should help the cause of the Stay In India and creating value in India… Every step counts,” he said.

RBI said the aim was to enable start-ups, irrespective of the sector, to receive foreign VC investment and also enable transfer of shares from foreign VC investors to other residents or non-residents.

The central bank has also proposed simplifying the process for dealing with delayed reporting of FDI-related transactions by building a penalty structure into the regulations. The notifications/circulars under Fema, wherever necessary, will be issued shortly.

The regulator said electronic reporting of investment and subsequent transactions will be made on the e-Biz platform only. Here, submission of physical forms will be discontinued with effect from February 8.

Source: http://www.business-standard.com/article/finance/rbi-proposes-easier-access-to-foreign-capital-for-start-ups-116020200565_1.html