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Sunday,
November 18, 2001, Chandigarh, India  
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SBI pays
fine, implements better norms SBP
introduces ‘anywhere banking’ In the
wonderland of investment 7-point
programme to boost tourism Yahoo
Europe set for more layoffs
Airline industry faces
crisis
Samvat signals |
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Enhanced gratuity CII to
send agri-business experts to China TIS
extends services to 32 cities
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SBI pays fine, implements better norms
New York, November 17 The Federal Reserve accused the State Bank of India (SBI) of “reckless engagement in unsafe and unsound practices as a result of SBI-US” failure to establish and maintain procedures aimed at monitoring compliance with America. In an interview, SBI’s Executive Vice-President Shesh Iyengar told IANS the bank had immediately paid the $7.5 million penalty slammed on it on November 13 and was cooperating fully to bring in best practices. The SBI, operating in the USA for the last 30 years, has denied allegations of unsound practices that the Federal Reserve suspects led to money laundering. “There has been no knowing violation of US regulations,” Iyengar said. “We have not been charged with any money laundering and there is no specific or general charge that we have aided or abetted that.” Their charges specifically pointed to nostro (interoffice accounts) and escrow accounts. A compliance officer and an audit head has to monitor the SBI-US procedures of under the cease and desist order issued November 13. The Federal Reserve passed the order on SBI implying it will either close its operations or pay the fine without citation, as it suspected the bank did not comply with US regulations leading to money-laundering. In response to the order to remove SBI representatives of the Nassau-Bahama Offshore banking unit, Iyengar said the bank was still discussing options with US regulators. “We are seriously considering shifting that to the Bahamas. The other option is closure.” The order applies to all SBI branches in the USA — the Broadway and Flushing, and Park Avenue branches in New York, and the bank’s offices in Chicago and Los Angeles. He admitted the SBI had to spruce up operations. “We are relying heavily on technology and investing heavily in that to be in line with best industry practices. We are reinventing ourselves. We have to put in place steps to enhance our policies and procedures, enhance our computer and accounting systems.” The average balance sheet at SBI’s US operations is something in the range of $1 billion, and daily about 2,000-2,500 drafts are paid here, Iyengar said. The SBI had cornered a large share of remittances going to India. All these are now on hold and new deposit accounts have been stopped, but Iyengar could not put a number on losses. “But it is not going to affect our viability.”
IANS
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SBP introduces ‘anywhere banking’ Chandigarh, November 17 The bank simultaneously launched the facility of ‘Anytime banking’ by installing 5 ATMs at Chandigarh and Panchkula as part of its initial aim of installing 25 ATMs covering different states and Union Territories. The number is slated to be increased to 50 by March, 2002, added Mr
Purwar. He said at the end of September, 2001, bank’s aggregate deposits stood at Rs 12,116 crore, showing a growth of 21.79 per cent over September, 2000 against ASCBs growth of 18.96 per cent during the same period. The bank has its net NPA at less than 4 per cent which is the least amongst PSU banks. Mr Purwar stressed on the upgradation of the technology of the branches and said the bank’s focus is on retail banking. Out of the 722 branches, 324 branches have been computerised. The bank has extended credit facilities to over 1,50,000 beneficiaries under agriculture activities. In addition, bank has financed 474 rice mills and 118 cotton ginning units. Mr
J.R. Devgan, GM (Operations) informed about the retail schemes. Mr Amitabaha Guha CGM and Mr Dinkara
Rao, GM were also present on the occasion. |
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In the wonderland of investment Q: I want your expert opinion on my following tax query. At the time of my marriage i.e in 1995 my parents gifted me some jewellery in the shape of
stridhan. Now the said jewellery is out of fashion and I have sold the same. Kindly give me your expert opinion that whether there is any income tax liability on my part or not. I have heard that there is no tax liability on the sale out of
stridhan, whether it is true or not. — Disha A: I have some good news and bad news. First the bad. You have earned capital gains and are liable to pay the tax. Not the good news. The cost of acquisition is the cost that your parents paid or the fair market value as on 1.4.81, whichever is higher. However, the date of acquisition would be the date of your marriage. Q: I am a student MD at Medical College Amritsar and am receiving stipend from the college. The college authorities are deducting TDS on stipend under the head “salary” by issuing Form No. 16. About a year back my colleague took a legal advice from a CA at Amritsar, who said that the stipend was totally tax-free in the hands of students mainly because of two reasons. Firstly, the stipend is given by the college authorities to meet the cost of education and is thus tax-free u/s 10(16) of the Income tax Act. Secondly, since no employer-employee relations exists between the students and the college authorities, the stipend is not subject to TDS. The CA had some High Court judgements to support his contentions. Can we completely rely on the case of my friend for claiming refunds? — Aman Khanna A:
Yes, the CA has given an opinion which I contend is correct. Stipend is normally paid to reimburse actual expenses incurred for activities connected with your education. However, any savings made out of this amount is chargeable to tax without any deductions. Q:
In last budget (2001) FM has cut down deduction u/s 80L from Rs 12,000 to 9,000 and additional deduction of Rs 3,000 for government securities only. Will you please let me know what government securities are considered for Rs 3,000 deduction? — Anil Navare A: The government securities are auctioned by RBI from time to time. Normally, it is difficult for an individual to own these. Big corporates, pension, gratuity funds, LIC, MFs, UTI etc buy these papers. Some of the MFs have got schemes which invest 100 per cent of their funds in such G-secs. Understandably, such schemes enjoy the highest safety. Therefore the extra Rs 3,000 concession is more or less useless. Q:
I had deposited Rs 60,000 for 5 years with Hudco in 1997 @ 4 per cent P.a., paid monthly through post dated cheques. There was no TDS as the then limit was Rs 10,000. This limit has been increased to Rs 5000. While issuing post-dated monthly cheques on 24.4.01 for the year 2001-02 Hudco has deducted TDS. I immediately sent 15H form to Hudco with request for refund of TDS, but got the negative response. I did not receive any intimation or time after passing of budget from Hudco for submission of 15H from. I will be obliged if you please clarify whether action of Hudco is justified? If not please advise what to do. — V.P. Gulati A:
It is unfortunate but true that the authors of the legislation do not apply their mind to the inconvenience faced by the investors during the transactional period. Hudco is required to deduct tax at source at the prevalent rates before distributing the interest. Period. Non-compliance with this requirement entails heavy penalty. It is not the responsibility of the company to send Form 15-H blanks to the investors, though it may do so as a friendly measure. In the instant case, Hudco was forced to take the action it took. Receipt of the Form after the distribution of interest warrants, cannot be acted upon. I only hope the authorities provide some interim measures to enable companies protect their investors against the suffering caused by sudden changes. |
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7-point programme to boost tourism
London, November 17 “Efforts will be made to create conditions in which the country attains a reputation for ethical trade and business practices” under the seven-point programme to meet the adverse conditions in the aftermath of the September 11 strikes, Jagmohan, who was attending the World Tourism Mart here, said. Steps would be taken to propagate India as a safe and secure destination, step-up marketing in the Western and Northern world and break new grounds in the East and South, particularly with regard to China, Korea, Japan, Taiwan, Singapore and Australia, he said. Special attention would be given to domestic tourism, particularly tourism connected with pilgrimage and the new facilities and infrastructure thus created would be used to serve as a back-bone for international tourism and help in initiation of a great reform movement in India, a sort of new renaissance which would make the country more creative and constructive and bring about a work culture of the highest class, Jagmohan said. The minister said he would unveil a new tourism policy in Parliament before the end of next month. As regards the menace of touts, beggars and cheats trying to exploit tourists and bring a bad name to the country, Jagmohan, who is known for his administrative capacity as governor of J and K, Delhi and Goa, said “we are very conscious of the problem.” “Strong action will be taken against those who failed to deal with the touts, beggars and cheats,” he said.
PTI
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Yahoo Europe set for more layoffs London, November 17 The headcount reduction figure for Europe has not been finalised, but a company spokeswoman said it would be roughly 7 per cent of the 400 European staff, equating to about 30 employees. On Thursday, Yahoo said it would reduce headcount by 300 company-wide. London is its biggest centre in Europe but it operates across the continent. A few jobs were cut in Europe earlier in the year. The new cuts in Europe may be relatively small, but the symbolism runs deep. With losses mounting, the company has put an emphasis on streamlining. “Europe is still considered an area of growth for Yahoo,” said a London-based analyst who asked not to be named. “But it’s still a drag on profitability. At a time when they’re battening down the hatches, Europe is a bit of a thorn in their side.” Europe has been a growth area for the company since it opened its first European business in the UK in September 1996. As the Internet grew into a mass medium, Yahoo, as the top European portal, reaped the revenues from a growing stream of online advertising and e-commerce business. Yahoo Europe, under the leadership of the now-departed Managing Director Fabiola Arredondo, was uniquely successful in the group, generating $113.6 million in revenue in 2000. Before the Internet bubble burst in the spring of 2000, Yahoo executives even discussed a stock market float for the unit. The dot-com fallout was particularly hard on Yahoo’s business, essentially snuffing out its largest segment of advertisers. In Europe, it has lost audience share and advertising business to Microsoft’s MSM portal.
Reuter
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AS in the past, Air India will be fully involved with Haj operations. It will continue to provide discounted fares and facilities to Hajis. To make the operations smooth, the Air India Board has allowed national carrier to take on dry lease four aircraft. The Civil Aviation Minister Shah Nawaz Hussain thinks that operations through leased aircraft will be better than operating flights through chartered aircraft. Air India has been forced to reduce operations on several routes following terrorist attacks in USA on Sept 11. It has also taken many measures to reduce overhead expenses and has also closed down a few offices abroad. It is, however, not very certain whether Haj operations will augment national carrier’s revenue or it is operating flights as a “national duty”. The passenger load had shown signs of improvement in October. But there has been sudden fall again following air crash in New York a few days ago. The airline industry is passing through one of the worst crisis in the last two decades. Never has the airline industry been hit so hard as this time. According to AI, operating revenue during the first half (April-September) of financial year 2001-02 increased to just 1.5 per cent to Rs 2,355.76 crore compared to Rs 2,321.04 crore in the first half of the year. It made a huge operating loss of Rs 35.39 crore against Rs 22.62 crore in April-Sept 2000. The national carrier is, however, staying afloat because of a non-operating profit of Rs 47.26 crore, a 68.97 per cent increase over previous year’s non-operating profit of Rs 27.97 crore. Those, who have been monitoring AI’s functioning, say all these figures of operating revenue and non-operating revenue are nothing but jugglery of figures. AI continues to be in neck-deep financial crisis as passenger load has declined more steeply than reduction in overhead expenditure. AI’s financial health will never improve unless and until huge commission to GSAs (General Sales Agents) in India and abroad is drastically cut. AI’s market strategy has been far from calculative. The capacity has been increased through new bilaterals and code sharing but the market growth has been much less than projected. According to aviation experts, it is not very rewarding to obtain aircraft on dry lease. The rental is exorbitant and revenue earned is not sizable. The gains through leased aircraft are marginal, if at all. Air India’s fleet continues to be meagre. It makes it all the more difficult to dispose of ageing jumbos, which are jumbos in every sphere of aviation. Two of these four aircraft have always kept aside for the VVIP movement. Indeed both aircraft, meant for VVIP movement, are subjected to stiff maintenance. Concorde After 15 months ‘rest’, Concorde has taken to skies again. Suspended after a crash minutes after take-off from Charles de Gaulle Airport in Paris (113 persons were killed), the aircraft was subjected to complete overhaul and maintenance before declaring it air-worthy once again. It is the only supersonic passenger jet. Concorde’s first accident took place on July 25, 2000. Since then all possible measures have been taken to render it safer than it was. But the aviation industry has plunged into dreary situation because terrorist activities are on the rise. Though USA authorities claim that the recent crash in New York was a ‘mechanical’ failure. Many aviation experts hold different view. |
Q: Can the ceiling limit for gratuity as amended in 1994, could be reduced by any settlement or agreement? A:
In Bharat Commerce and Industries Ltd. v Ramprasad. the Madhya Pradesh H.C. was called upon to decide the question, which held as under: (2001-II-KK,H, 1033). The Appellate Authority had earlier rejected the contention of the petitioner that by virtue of agreement/settlement dated 25-4-91, the ceiling of maximum limit of Rs 50,000 is applicable and the employee is not entitled to more than Rs 50,000 even after the amendment in S.4 of the payment of Gratuity Act by which the limit has been enhanced to Rs 1,00,000 instead of Rs 50,000 w.e.f. 24-5-94. It has been held by the Appellate Authority that the employees are entitled to get the benefit of this enhanced limit on the basis of this amendment U/s. 4 (13) of the Act w.e.f. 24-5-94, and the provisions of the agreement/settlement cannot create any bar against the statutory provisions and on that ground appeal of the employee was accepted. In the opinion of the H.C., if for the purposes of computation of quantum of the amount of gratuity the terms of settlement are better than the Act, the employee is entitled for that benefit but the maximum statutory ceiling limit as provided U/s.
4 (3), cannot be reduced by mutual settlement or agreement. Therefore, the H.C. held that the Appellate Authority was fully justified in holding that the employee after the amended S.4(3) w.e.f. 24-5-94 is entitled for the amended benefit and has rightly allowed the appeal. In view of above, the H.C. felt that the Appellate Authority has not committed any illegality or any error of law apparent on the basis of the record. Accordingly the
H. C. dismissed the petition.
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CII to send agri-business experts to China Chandigarh, November 17 Mr Gokul Patnaik, Chairman, Food and Agriculture Sub Committee (CII , North) will head the mission. Other members who will participate are Mr R.C. Jain, MD Eicher Tractors, Mr J.S. Ghunghrana, Chairman, Punjab Agro Industries Corporation, Mr Satbir Nijjer of Nijjer Agro, Mr A.R. Talwar, MD, Punjab Agro Industries Corporation, Mr Prem Aggarwal of Aggarwal Cold Storage, Mr R.K. Dhir, MD, Trade India and Mr Rishi Raj, Executive Officer, CII (North).
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TIS extends services to 32 cities
Chandigarh, November 17 |
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Snowcem Tyre production Zenith Spice Telecom |
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