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GTB customers relieved as moratorium goes
RBI allays fears as panic spreads in
Adfactors wins silver at global contest
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IBP seeks help to cover losses Kolkata, August 14 The IBP Co Ltd, a subsidiary of the IOC, said today that losses incurred by it on account of subsidising of products were threatening its survival as a stand-alone fuel marketing company and the government intervention was urgently needed.
Swagat seva, a sham
Tax on NRE deposits from Sept 1
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GTB customers relieved as moratorium goes Mumbai, August 14 All branches of the GTB will operate as branches of the OBC, according to OBC officials in Mumbai. In Mumbai newspapers were hurriedly pasted on the GTB nameboards as news of the merger came in. The OBC will decide which branches of the GTB will stay in operation in the coming weeks. A few branches might be closed. The resumption of operations, following the government’s decision to lift the moratorium on the GTB yesterday, comes as a relief to more than 800,000 depositors who were on tenterhooks since the Ramesh Gelli-promoted bank went bust. All 103 GTB branches would function as branches of the Oriental Bank of Commerce, the Reserve Bank of India said yesterday. Customers, including depositors of the GTB, would be able to operate their accounts as customers of the OBC, which was making arrangements to ensure normal service, the RBI said. GTB’s automatic teller machines (ATMs) have also begun to function normally. Under the amalgamation scheme, shareholders would receive pro-rata payment, if any surplus remained, after meeting all GTB liabilities, the RBI said. The RBI had initially announced a three-month moratorium, effective till September. In special cases, depositors could withdraw up to Rs 100,000 from the GTB, subject to an approval by the RBI. A team of senior managers of the OBC have flown to Hyderabad to oversee the integration of the operations of the two banks.
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RBI allays fears as panic spreads in three banks
Mumbai, August 14 The RBI Deputy Governor Rakesh Mohan said this morning that the banking systems in the country was strong and there is no room for people to have any apprehension about the soundness of the system. “There is no need to panic,” he observed. His observations came in the wake of a growing number of cooperative banks in the state facing heavy withdrawals of deposits and cash. “People are reacting to rumours... I hope this is just a passing phase,” he added. Following the run on the two cooperative banks — the South Indian Co-operative and Maratha Mandir Cooperative (MMC) — since beginning of the week, yet a third bank, the Punjab Maharashtra Cooperative Bank (PMC) today reported withdrawal of about Rs 6-8-crore from ATMs and also cash counters. PMC bank officials were seen pacifying their customers that the bank was financially healthy and there was no need to withdraw the money. The withdrawal started gaining momentum since yesterday when a sum of Rs 5-6-crore was taken out by the depositors. Even senior officials manned the bank counters till early this morning at Sion and Bhandup to meet the withdrawal requirements of the depositors. In fact, the RBI today came out with a statement in support of the financial health of the bank and assured the depositors about the financial soundness of the PMC bank. It urged the people to exercise restraint and use their wisdom while reacting to the wild rumours. PMC bank managing director Joy Thomas said the heavy withdrawal started from yesterday following a report headlined ‘Fraud in Maharashtra Bank’ in some newspapers.
— UNI
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Global wheels can run on Indian parts: Sigma chief Gaurav Choudhury Tribune News Service New Delhi, August 14 “A time will definitely come when global wheels would be running on Indian components,” Mr Jagdip Singh told The Tribune. Mr Jagdip Singh, who has led Sigma Corporation from a small exporter to one of the largest auto-component manufacturing companies in the country, feels that lack of suitable regulatory environment could decelerate the growth momentum. Reeling out statistics from global research firm Frost and Sullivan, he said that India is ahead of many of its far-eastern neighbours, including China in such parameters as design and engineering capability, quality supply and customer and after sales support. “However, we lag behind in government regulations which also brings down our price-competitiveness,” he said. Sigma Automotive Components, the flagship company of Sigma Corporation, is supplying auto-components to mostleading automobile manufacturing companies in the world. “Our customers include DalmierChrysler, Volkswagen, Volvo, Audi, and Ford,” he said. At present, the group has a combined turnover of Rs 150 crore. The group companies include Sigma Vibracoustic India Pvt Ltd, Sigma Freudenberg Nok Pvt Ltd, and Sigma Moulds and Stampings Pvt Ltd. The company was initially exporting anti-vibration rubber components to Iran in 1970. “I was 26 years old then and nurtured the dream of conquering the European markets. The turning point for our company came in 1972 when we received our first overseas order from Germany. To make a product that conformed to German specifications was by no means an easy task. Yet we accepted the challenge and were successful in executing the order to customer satisfaction,” Mr Jagdip Singh said. To be sure, Mr Jagdip Singh learnt the first lessons of enterprise at home. “Automotive components have been a traditional line of business, albeit it was retailing and not in manufacturing before the partition of the country.” He said this exposure to global markets and their norms and procedures enabled Sigma Corporation to emerge as a major player in the global auto-components market. “We made our first overseas acquisition by buying out a German plant in New Frankfurt in 1980. We sold it off in 1989 because we did not find ourselves very competitive. Today, the buyer is one of our major customers in Germany,” he said. Driven by the success, the company started looking for a joint venture partner “because we always thought we needed an elder brother.” The company has now initiated a dialogue to set up a plant in China. “It is still at the drawing board stage. I cannot give you a time frame for when the plant will be up and running,” he said. The company, which has set a target of achieving a group turnover of Rs 300 crore by 2008, has stringent quality control norms in place. “Our quality focus is customer-centric in order to make products that meet and exceed customer expectations,” he said. The company has put in place a “very high quality pre-shipment quality control system,” he added. Elaborating on the recipe of his and the company’s success, Mr Jagdip Singh said he strongly believes that “the function of the leadership is to produce more leaders and not more followers.” Today, at the age of 60, he believes his role in the company now is “more of an advisory nature, rather than operational.”
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Adfactors wins silver at global contest Chandigarh, August 14 The winning entry was a poster designed by Uday Parkar and O. Ramesh for the Vatsalya Foundation, a Mumbai-based NGO that helps rehabilitate street children. The winning entry titled 'Sleeping Boy' has also won a merit award at the prestigious 2004 One Show Awards, as well as featuring in the Work 2004 Annual showcasing the best advertising from Asia, Australia and New Zealand.
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IBP seeks help to cover losses
Kolkata, August 14 The company recorded a loss of Rs 8.65 crore in the first quarter of 2004-05; the losses on account of subsidy were to the extent of Rs 67 crore, IBP Managing Director N.G. Kannan told reporters here. Being a stand-alone marketing outfit with no offsetting refining margins, the IBP could not be expected to go on subsidising its products to the extent it had been currently doing. The leeway for increasing prices that the government has allowed to public-sector oil marketing companies was ‘grossly insufficient’ to make up for the gap between the buying and selling prices, he said. IBP had urged the government to suitably compensate it for the losses.
— PTI
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by A.N. Shanbhag
Tax on NRE deposits from Sept 1
Q: My son is an NRI who has NRE and FCNR deposits in certain Indian banks. The recent Budget proposes to tax these deposits from September. Will the existing deposits also be taxed or only those which are made after the date? What is the rate of TDS that is to be applied? Is there any minimum amount below which there would be no TDS? — V. Ranade A: Budget 2004 proposes to tax NRE and FCNR deposits w.e.f September 1. The tax would be levied on the interest on all deposits from the effective date. This means, the interest on the existing deposits as well as fresh deposits would be brought under the ambit of tax. However, note that for FY 04-05, it is only the interest accrued from 1.9.04 that will be taxed and not for the entire year. Also, the new tax implications will not come into existence until the Budget becomes an Act. The TDS on interest on NRE and FCNR accounts would be @20.4% if the interest is below Rs. 8.50 lakh and @ 22.44% if above. There is no minimum threshold (as in the case of interest on resident deposits) below which there would be no TDS applicable. However, if your son’s Indian tax payable is less than the total amount of TDS, then he may file tax return and claim refund.
Retirement benefits
Q: I took voluntary retirement from a PSU on March 15. However, I received the benefits only on April 15. The company included the benefit amount as income of 2003-04 and deducted tax before releasing the amount. Is this correct? a. As the benefit amount was credited to my bank account only on April 15, should not this benefit be treated as income of 2004-05? b. As this is a retirement benefit, can I not claim exemption like gratuity etc.? c. If no, can I not spread the benefit over a few years and thus reduce the incidence of tax? — Shobha Menon A: Normally, an assessee has to pay tax only on the income received either on actual or accrual basis. Salary is a different story. Tax is required to be paid on salary due from an employer or a former employer whether paid or not, received in advance though not due and also on arrears of salary paid. Also note that the Madras High Court in the case of CIT v M. Raman, Abdul Hadi and N.V. Balasubramanian JJ, (ITR vol 245, 2000) decided on 4.3.1997 that — the amount received by the employee at the time of voluntary retirement of service would be regarded as salary and the relief under Section 89 of the Income-Tax Act, 1961, would be admissible in respect of such sum.
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