- TAX DEMAND AGAINST FREE SERVICES PROVIDED BY BANKS: The Director General of Goods & Services Tax Intelligence has sent notices to many banks to pay taxes on free or bundled services (free services provided to customers who maintain balance in the account) provided by the banks to the account holders. The total demand as per ET report could exceed Rs. 6,000 crore. The demand is retrospective with a 12% service tax claimed since 2012, 18% interest on the amount and a 100% penalty. The notice has shocked the banking industry which is already reeling under an enormous amount of bad loans. The Indian Banks’ Association is planning to appeal against the arbitrary tax notice.
- DEPOSITS IN JAN-DHAN ACCOUNTS CROSS Rs. 80,000 CRORE: Total deposits in Jan Dhan accounts crossed Rs. 80,000 crore mark with more people joining the flagship financial inclusion programme. The latest report of the World Bank titled “Global-Findex Report 2017” released last week cited the success story of the Jan Dhan Yojana. Deposits under these accounts are on the rise after the demonetization exercise.
- SBI TO SAVE Rs. 30 CRORE EVERY YEAR FROM WIND, SOLAR POWER INSTALLATIONS: State Bank of India has announced that it has saved Rs. 125 crore in the last 8 years by installing windmills and many solar power units and expects to save Rs. 30 crore annually through its “renewable energy” investments. The bank has installed 10 windmills with a capacity of 1.5 MW each, of which three are in Tamil Nadu, six in Maharashtra and one in Gujarat. It has also invested in solar power and now possesses a capacity of 21.23 MW in renewable power sources. Energy generated through these renewable sources is solely for captive use by the bank’s various offices and branches across the country, making them free of any carbon emission.
- PNB TO HIRE DETECTIVE AGENCIES TO LOCATE UNTRACEABLE BORROWERS: Fraud hit Punjab National bank has invited applications for empanelment of detective agencies to locate its untraceable borrowers as it looks to strengthen and supplement its efforts to recover bad loans which surged to Rs. 57,519 crore as on 31/12/2017. All NPA accounts (Sub-standard, Doubtful and loss assets category) would be allocated to detective agencies thus appointed for gathering information.
- CREDIT GROWTH OUTSTRIPS DEPOSITS IN FY’18: Banks have ended Financial Year 2018 (FY’18) with more credit growth than the deposits. During this period credit growth was at Rs. 8,29,187 crore, while the Deposit growth was Rs. 7,28,765 crore. The incremental credit-deposit (CD) ratio for FY’18 works out to 114%. But what is alarming is during the last fortnight of FY’18, banks seem to have gone all out to disburse loans in a hurry. Credit disbursal during this last fortnight jumped by Rs. 2,79,361 crore, which almost amounts to 34% of the total credit disbursed in FY’18. In our opinion, this kind of last minute disbursals just to meet the year end targets may further lead to more deterioration in quality of credit.
- I-T DEPARTMENT SAVES Rs. 977 CRORE IN 5 YEARS ON POSTAGE AFTER RISE IN ONLINE COMMUNICATION: The Income Tax Department has said that it has saved up to Rs. 977 crore over the last 5 years due to the rise in online communications or E-mails. The department has saved on postage cost due to the increase in online communications. Online communication of the department has more than doubled since 2013-14.
This post first appeared on IMPACT OF DEMONITIZATION OF CURRENCY IN INDIA IN 2016, please read the originial post: here
