Banking Current Affairs 2015

RBI allows Indian corporate to issue offshore rupee-denominated bonds outside India

The Reserve Bank of India (RBI) has granted permission to the Indian corporate to issue offshore rupee-denominated bonds outside India.

In this regard, Union Government has considered the matter of taxation of income from such bonds under Income Tax (IT) Act, 1961.

Such bonds will attract a withholding tax of 5 per cent and gains arising in case of appreciation of rupee against the foreign currency. In this case investment made would be exempted from capital gains tax.

Capital gains tax would be exempted for the Capital gains arising in case of appreciation of rupee between the date of issue and the date of redemption against the foreign currency in which the investment is made.

Government’s clarification on these bonds comes in the wake of companies such as NTPC, IRFC and IIFCL are planning to issue rupee-denominated bonds in markets abroad. Even foreign portfolio investors (FPIs) also had sought clarification on the tax treatment of the instruments.


Samiran Chakraborty appointed as Chief Economist of Citibank India

Samiran Chakraborty has been appointed as Chief Economist of global banking major Citibank for India.

Prior to this appointment, he was Managing Director (MD) and head at Standard Chartered Bank for macro research in South Asia.

Chakraborty has more than a decade of rich experience in conducting macro research and covering various asset classes including currency, credit markets and interest rates.

Earlier, he had worked with India’s largest private sector bank, ICICI as chief economist and also as faculty for mathematical economics and open-economy macro-economics at Delhi School of Economics.

About Citibank India

  • Citibank India is an Indian private sector bank and subsidiary of US based Citigroup, a multinational financial services corporation.
  • Established in 1902 in Kolkata. Presently, its headquarters are in Mumbai, Maharashtra.
  • It operates in 44 full-service branches in 31 cities and has network of over 700 ATMs across the country. It employs around 7,500 people.


RBI allows banks to fix interest rates on gold deposit scheme

Reserve Bank of India (RBI) has allowed banks to fix their own interest rates on gold deposits under the Gold Monetisation Scheme.

In this regard RBI has issued guidelines mentioning

  • Banks are free to set interest rate such as principal and interest on the deposit denominated in gold.
  • Designated banks will accept gold deposits under the Short Term Bank Deposit (1-3 years), Medium (5-7 years) and Long term (12-15 years) Government Deposit Schemes.
  • The interest on the gold deposits will be credited in the accounts on the respective due dates and will be periodically withdrawable i.e. at maturity of the deposits.
  • Short term bank deposits will be applicable cash reserve ratio (CRR) and statutory liquidity ratio (SLR).
  • There is no bar for maximum gold deposit but the minimum deposit at one time should be raw gold equivalent to 30 grams of 995 fineness standard.
  • The raw gold should be in the form of coins, bars, jewellery excluding stones and other metals
  • Individual banks will determine the provision for premature withdrawal subject to a minimum lock-in period and along with the penalty.
  • The designated banks may sell or lend the gold accepted under the deposit to Metals and Minerals Trading Corporation (MMTC) of India for minting India Gold Coins (IGC) and to jewellers or sell it to other designated banks.

Earlier, Union Government had given its approval to Gold Deposit and Monetisation Scheme in order to mobilize a part of an estimated 20,000 tonnes of precious metal lying idle with households and institutions into the banking system.