Tag: Banking
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Swiss Accounts and Banking Secrecy: Contrasting Outcomes
[Posted by Umakanth Varottil] After prolonged discussions, the US and Swiss authorities came to an agreement earlier this month whereby UBS would disclose details of certain US account holders who are suspected of evading US taxes. The Time Magazine outlines the terms: Under the terms of the new agreement, the IRS will submit a request…
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Writing off Bad Debts and Tax Liability
[Posted by V. Niranjan] The treatment of bad debts has been a constant source of disagreement between financial institutions and the Tax Department. Banks typically argued that some advances were so unlikely to be recovered that they may justifiably be regarded as “sticky” advances, and that interest on these advances should not be treated as…
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Securitisation and Debt Recovery – A Centre-States Conflict?
[Posted by V. Niranjan] The Constitution has devised an elaborate scheme of distribution of legislative powers, and the competence of a legislature to enact a law has normally been challenged by a private citizen to whom the law applies. The latest battleground looks to be the fairly recent structure of securitization, debt recovery and other…
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Liberalisation of ECB in Infrastructure Sector
[Posted by Umakanth Varottil] RBI has allowed infrastructure companies to raise external commercial borrowings (ECB) under the automatic route up to a maximum of US$ 500 million (compared to the erstwhile limit of US$ 100 million). The RBI notification is available here.
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Corporate Governance in Banks
[Posted by Umakanth Varottil] With the recent credit crisis weakening the financial position of several banks world-over, the question that is being repeatedly posed is whether the boards of directors of these banks could have foreseen the oncoming crisis or whether they should have taken steps to forestall a slide in their financial position. Fingers…
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Consolidation in the Indian Financial Sector
[Posted by Umakanth Varottil] The financial services sector in India (both in the banking and non-banking finance industry) has witnessed consolidation over the last few years through various mergers & acquisitions. This trend will perhaps continue in the future as well. A recent speech by V. Leeladhar, Deputy Governor of the Reserve Bank of India…
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Reverse Mortgages Explained
[Posted by Umakanth Varottil] Today’s Business Standard carries a column by Stanley Pinto that looks at reasons why reverse mortgages have failed in India. More importantly, it contains a lucid explanation of the concept: “The reverse mortgage facility allows senior citizens to unlock the value of their most valuable asset, their home, by mortgaging it…
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Northern Rock: Bank Nationalisation
[Posted by Umakanth Varottil] As the Economist reports, Britain’s Government has decided to nationalise the ailing Northern Rock Bank, after unsuccessful efforts to sell it to a private player. The strategy followed recently by the Reserve Bank of India in the case of ailing Indian Banks has been somewhat different. It has usually exercised its…