QBiz: Deposit Limit Removed From KYC Account; Wadia Skips Tata EGM
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1. RBI Removes Rs 5,000 Cash Deposit Limit for KYC Compliant Accounts
In a series of flip-flops, the Reserve Bank of India (RBI) on Wednesday removed restrictions on customers depositing old notes in excess of Rs 5,000. An RBI circular said banks will not be questioning customers depositing old notes if their accounts are compliant under Know Your Customer (KYC) norms.
The central bank, which had issued these guidelines on Monday, had stated that deposits in old notes of Rs 500 and Rs 1,000 denomination in excess of Rs 5,000 can be credited to an account only once by 31 December, that too after the depositor satisfactorily explains the reason behind the delay in depositing the money. The decision had come as a surprise as the government had promised that enough time is available to deposit old notes.
(Source: Livemint)
2. Nusli Wadia Skips Tata Steel EGM, Cites Pressure on Independent Directors
Industrialist Nusli Wadia on Wednesday said the ability of promoter Tata Sons Ltd to seek removal of independent directors from group company boards could force them to either “toe the line, resign or face removal”.
Wadia, who was not present at Tata Steel Ltd’s Wednesday extraordinary general meeting (EGM) called to vote on a resolution seeking his removal, said in a message to the firm’s shareholders that if removed in this manner, independent directors will no longer be protected from addressing issues within companies.
Wednesday’s meeting was first of the three EGMs called to seek removal of Wadia, 72, as independent director from boards of Tata Steel Ltd, Tata Motors Ltd and Tata Chemicals Ltd. The results of Tata Steel’s EGM are expected late on Wednesday.
(Source: Livemint)
3. Cabinet Approves Ordinance Seeking Cashless Transactions Under Wages Act
The Union Cabinet on Wednesday approved a draft ordinance to empower states and allow industries to pay wages digitally, through a direct bank transfer to accounts or by cheque, in a bid to encourage cashless transactions in the country.
“The government proposes to bring an amendment to Section 6 of the Payment of Wages Act which will further provide crediting the wages in the bank account of the employees or payment through cheque along with the existing provisions of payment in current coin or currency notes,” a cabinet statement read.
(Source: Livemint)
4. RBI Slaps Fine on 5 Foreign Banks for Violating FEMA Rules
The Reserve Bank on Wednesday imposed penalty on five foreign banks, including Deutsche Bank and Standard Chartered Bank, for violation of its instructions on reporting requirements of the FEMA.
The three other banks are: Bank of America, Bank of Tokyo Mitsubishi and The Royal Bank of Scotland.
RBI said they have been fined for violation of its instructions on reporting requirements of the Foreign Exchange Management Act, 1999 (FEMA).
Germany's Deutsche Bank has been imposed a fine of Rs 20,000, while Bank of America, Bank of Tokyo Mitsubishi, The Royal Bank of Scotland and Standard Chartered Bank have been fined Rs 10,000 each.
(Source: Business Standard)
5. Loan Growth Plummets After Demonetisation
Banks may be flush with cash after the government’s decision to withdraw notes of Rs 500 and Rs 1,000, but they have nowhere to deploy it.
Loan growth, which has been weak for some time now due to the lack of investment in the economy, has plummeted further as demand for consumer credit has also taken a hit in the weeks following the demonetisation decision.
Data released by the Reserve Bank of India (RBI) on Wednesday showed that the growth in total bank credit across all scheduled banks, as on 9 December, slowed to 5.76 percent on a year-on-year basis, its slowest this financial year.
(Source: BloomberQuint)
6. Reliance Communications Sells Tower Business to Brookfield to Pare Debt
Reliance Communications Ltd inked a binding contract with Brookfield Infrastructure and its institutional partners to sell its tower business.
The Anil Ambani-led company will receive an upfront cash payment of Rs 11,000 crore, which will be used solely to reduce its debt, according to the company's press statement.
The company expects "significant future value creation" from these class B shares owing to the 4G rollout and the expected growth of the telecom industry.
(Source: BloombergQuint)
7. RBI Monetary Policy Panel Puts Focus on Inflation as Global Risks Mount
Indian central bank's monetary policy committee (MPC) has shifted its focus towards inflation while playing down concern about economic growth, minutes from its meeting this month showed on Wednesday.
The Reserve Bank of India's six-member MPC decided unanimously to keep the policy repo rate unchanged at 6.25 percent on 7 December, instead of delivering a 25 basis points cut expected by a majority of analysts.
The minutes showed that all members of the committee considered that the impact on growth of Prime Minister Narendra Modi's demonetisation of large denomination bank notes would be transitory.
They all expressed concern about the rising risk of inflation from global oil prices, as well as domestic non-oil and non-food inflation.
(Source: Business Line)
9. SBI Rules out Further Stake Dilution in SBI Life Insurance Before IPO
State Bank of India (SBI) today ruled out further stake dilution in its life insurance arm before the the proposed initial public offering that is likely to to happen over the next 12-18 months.
(Source: BloombergQuint)
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