No capital gains tax or stamp duty on foreign banks converting to WoS
As per a notification by the Reserve Bank of India (RBI), the conversion of existing foreign bank branches into Wholly-owned Subsidiaries (WoS) in India will not be liable to capital gains tax or stamp duty.
The central bank clarified that Government of India has inserted, by the Finance Act, 2012, a new Chapter XII-BB titled ‘Special Provisions relating to Conversion of Indian Branch of a foreign bank into a subsidiary company’ in Income Tax Act, 1961, inter alia, exempting capital gains arising from such conversion from capital gains tax, with effect from April 1, 2013.
It further added that a new section ‘8E’ had been inserted in Indian Stamp Act, 1899 vide Banking Laws (Amendment) Act, 2012, exempting from stamp duty on any conversion of a branch of a foreign bank into wholly-owned subsidiary or transfer of shareholding of a bank to a holding company in terms of the scheme or guidelines of RBI.
As per RBI, foreign banks with complex structures and which did not provide adequate disclosures would have to operate in India only through WoS in order to regulate and avoid 2008-type crisis.
Although RBI has allowed foreign banks to list their subsidiaries in the local stock exchanges, it has also prescribed that the minimum paid-up equity capital or net worth for a WoS would be Rs. 500 crore. However, foreign banks functioning in India before August 2010 have been given the option to continue their operations in branch model.
Some Facts:
State-run banks in the country control about 2/3rd of the aggregate assets of the Indian banking system, whereas, foreign banks manage around 4.3% of total deposits.
Citibank is the largest foreign bank operating in India in terms of asset base. Other key foreign banks are StanChart, which has 100 branches, HSBC 50, Deutsche Bank 17 and DBS 12 branches.
As of March 2013, there were 43 foreign banks in India with 333 branches.
Medium enterprises to be included under priority sector: RBI
As per the Reserve Bank of India, the incremental bank loans to medium service enterprises (as defined in the Micro, Small and Medium Enterprises Development Act, 2006) provided after November 13, 2013, up to the credit limit of Rs 10 crore, would qualify as priority sector advances. This dispensation would remain in force up to March 31, 2013.
How would RBI’s step to treat medium enterprises under priority sector help?
The medium-sized units across various sectors are feeling the heat of ongoing slowdown, as payments from large companies are not being made timely. These enterprises have limited bargaining power and can’t endure dues for long. With lending to medium-sized units set to be treated as priority sector lending, banks would look to give loans to viable units which will in turn help banks in meeting priority sector lending targets.
Status of Priority Sector Credit
As per a recent report by RBI, priority sector credit had increased in 2012-13, against a decline in overall growth. However, growth in priority sector credit was lower than the growth in overall credit. In 2012-13, credit to priority sectors by public and private sector banks was at 36.3% and 37.5% respectively, against the overall target of 40%.
For micro and small industries, dues were at Rs 2.84 lakh crore, as of March 2013, growth of 20.3% compared to 2012.
Cyber Coalition 2013: NATO’s largest-ever cyber-security exercise held in Estonia
NATO held Cyber Coalition 2013: Largest-ever cyber-exercises to practise averting large-scale, simultaneous cyber attacks on member states and their allies. The drill was hosted by National Defence College training center in Tartu, Estonia.
Objective: Cyber Coalition an exercise with technical components to give its participants a good learning about NATO’s Cyber Defence capabilities, identify areas for improvement within the NATO-wide Cyber Defence community. It also aims to better the capability, cooperation and information sharing between NATO and NATO nations and partners in cyber defence via mode of education, research and development, lessons learnt.
Who all participated in Cyber Coalition 2013?
Representatives of 27 nations and NATO partners from Switzerland, Austria, Sweden, Ireland and Finland participated in the drill. New Zealand and the European Union took part as observers. A total of 400 people participated, including government, legal and IT experts. Participants put their skills to the test to show how they would respond to a cyber attack.
About Cyber Defence Exercises
Objective: Cyber defence exercises allows its participants to learn and test the skills needed to fend off a real attack.
First exercise: 2008, a joint between Swedish and Estonian universities.
Second Exercise: Baltic Cyber Shield (2010), organised by Swedish National Defence College (SNDC), various Swedish institutions and the Estonian Cyber Defence League.
Since 2012, the exercise series is called Locked Shields.
Locked Shields 2013
Took place in the end on April 2013
Blue Teams were part of an international coalition forces in unstable country called Boolea.
Locked Shields (CDx) is a real-time network defence exercise
CDx has a game-based approach which means that no organisation will play their real-life role and the scenario is fictional.
Exercise organised by NATO Cooperative Cyber Defence Centre of Excellence together with its partners.
Technical support by Cisco, Clarified Networks, Clarified Security and Bytelife.
Direct cash transfer better option than other anti-poverty schemes: Planning Commission
According to a study by the Planning Commission, the cost of bringing all households above the poverty line would have been Rs. 55,744 crore during 2011-12 if cash transfers were used instead of anti-poverty schemes. This would have been sufficient to plug the poverty gap and would be just a fraction of annual anti-poverty budget instead of initiating new anti-poverty schemes.
As per the analysis by the Planning Commission:
Of Rs. 55,744, Rs 42,932 crore would have had to be transferred to the below poverty line households in rural areas and the rest Rs 12,812 crore to those in urban areas.
In 2011-12, the UPA government had spent Rs 72,822.07 crore on food subsidy. The expenditure in the same year on the UPA’s seven flagship schemes was Rs. 1,09,379 crore.
This cost is likely to increase as the annual cost of implementing the Food Security Law alone is estimated at Rs 1.2 lakh crore.
The anti-poverty programmes in our country have leakages and is inefficient.
What is Poverty Gap?
Poverty gap is the amount of cash required for a household to lift it above the poverty line. It is the difference in the level of consumption of the households below the poverty line and those on the line.
As per the Tendulkar Committee report, a household of five people in India subsists with a monthly consumption of Rs. 874.50which is the Poverty Line. This poverty line is in proximity to the World Bank Poverty Line of an income of $1.25 a day (on a Purchasing Power Parity basis).
Raheel Sharif becomes chief of Pakistan Army
Lt General Raheel Sharif promoted and appointed as the new chief of Pakistan army.
As per official announcement, President Mamnoon Hussain on the advice of Prime Minister Mr. Nawaz Sharif named General Sharif as chief of army staff and General Rashad Mehmood as Chairman Joint Chiefs of Staff Committee(CJCSC). The retiring chief of army staff General Ashfaque Parvez Kayani handed over the charge to the new chief on November 29, 2013.
Rory McIlroy clinches Emirates Australian Open Golf Tournament
Irish golfer Rory McIlroy defeated his contender Adam Scott at the Emirates Australian Open Golf Tournament , winning for the first time in 2013. He snatched the title from Scott who was trying to be only the second player after compatriot Robert Allenby in 2005 to win Australia’s triple crown by claiming the Australian Open, Masters and PGA titles in the same season.
Suwannapura bags India Open golf tournament
Thailand’s Thidapa Suwannapura won the Women’s Indian Open golf tournament played at the Delhi Golf Club. The win also made Suwannapura the second Thai to win the title, after three-time winner and defending champion Phatlum Pornanong.
India’s Gauri Monga was tied fifth — the best show by an Indian in the tournament.
P.V. Sindhu clinches Macau Grand Prix
India’s rising badminton star P.V. Sindhu achieved another feat as she lifted the Macau Open Grand Prix Gold title by defeating Canada’s Michelle Li in the final clash, in Macau.
This is her second Grand Prix Gold title after the Malaysia Open in May 2013. Sindhu was recently conferred with the Arjuna award this year for her remarkable performances in badminton.
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