Wednesday, October 31, 2001

DoP, DEA differ over FDI in money transfer business - NRI
IS foreign investment allowed in services for domestic and cross border transfer of money? The Foreign Investment Promotion Board suddenly finds itself in a quandry with the department of posts and department of economic affairs coming up with varying suggestions on a proposal by the US-based Western Union Financial Services to set up a wholly owned subsidiary for domestic and cross border money transfer activities.

While the department of economic affairs has suggested rejection of the proposal, the department of posts says that there is no statutory restrictions for a private party to undertake money transfer under the Indian Post office Act.

The department of posts has, however, pointed out that the FIPB should acertain from the finance ministry and RBI whether or not the said activity is a financial service. It may be pointed out that the department of posts has an ongoing alliance with Western Union Financial Services for inward remittances into the country.

The department of economic affairs is, however, very direct in its approach. It says that based on its consultations with RBI, the department felt that the proposed activity of Western Union Financial Services did not fall under the approved NBFC activity and was a service activity to provide infrastructure and network for undertaking money transfer services both within India and cross border.

The RBI only allows inward remittances through such foreign companies to their agents in India, it said. As per its application, Western Union Financial Services has said that it wants to set up a wholly-owned subsidiary with an initial capitalisation of $5,00,000 to set up infrastructure and network to provide services for transfer of money within India and cross border money transfers services, which in effect means to provide services for transfer of money to and from India, subject to compliance with the regulatory framework.

Though the FIPB is understood to have deferred the proposal for a while, the secretariat of industrial approvals has made some policy clarifications on the issue simultaneously.

The SIA says that domestic money transfer is not reserved exclusively for the department of posts, and that the proposal of the US-based company was only for providing necessary infrastructure including software and data transfer networking between Western Union Data Processing Systems and its representatives at different locations.

It has also clarified that the Indian subsidiary would be responsible for settlements with Indian representatives at periodic intervals and that since cross border money transfers services have not been permitted by RBI only domestic money transfer services could be considered and the same would be subject to relevant laws.

Monday, October 15, 2001

BoI revises rates of FCNR deposits from Oct 15 - NRI
BANK of India has revised downwards the interest rates on foreign currency non-resident deposits with effect from October 15.

Dollar deposits for one year to less than two years would attract an interest rate of 2.40 per cent (2.80 per cent earlier), BoI said in a release here on Thursday.

The interest rate for deposits of two years to less than three years and for three years would be 3 per cent (3.40 per cent) and 3.60 per cent (4 per cent), respectively, it said.

For Great Britian Pound deposits of duration one year to less than two years the rate has been cut to 4.30 per cent (4.40 per cent) and 4.70 per cent (4.75 per cent) for two years to less than three years.

The bank has revised the rate to 4.90 per cent (5 per cent) for GBP deposits of three years.

Euro deposits of one year to less than two years would carry an interest of 3.25 per cent (3.50 per cent). The rate for deposits of two years to less than three years would be 3.50 per cent (3.60 per cent) and for three years remaining unchanged at 3.75 per cent, BoI said.

However, the rate for yen deposits has remained unchanged at 0.05 per cent for less than three years and 0.10 per cent for three years, the bank added. (PTI)

PNB cuts interest rates on FCNR scheme - NRI
PUNJAB National Bank on Mondoay reduced the rate of interest on foreign currency non-resident (banks) scheme for US dollar to 2.5 per cent from 3 per cent.

The rate of interest for USD maturities of one year to less than years, two years to less than three years and three years has been revised to 3.25, a PNB release said here.

The rate of interst on pound deposits has been revised to 4.25 per cent for first maturity and 4.50 for other maturities.

The interst rate on euro deposits has been revised to 3.25 for the first maturity and 3.50 for other two maturities, the release added. The revised interest rates would be effective from Tuesday. (PTI)

Wednesday, October 10, 2001

Punjab to set up dept for NRIs - NRI
Chandigarh, October 9
To help non-resident Indians (NRIs) speedily solve their problems, the Punjab Chief Minister, Mr Parkash Singh Badal today ordered the creation of a new department in Chandigarh. It will be headed by Ms Geetika Kalha, Secretary, Education (Colleges), as Commissioner in charge. A post of Secretary, NRIs and Industrial Liaison, already exists in New Delhi. The new set-up in Chandigarh will function on the same pattern, according to a press release.

The government has already amended the Punjab Security and Land Revenue Act, 1953, under which NRIs can now get back possession of their agricultural land from tenants or illegal occupants. Similarly, to protect NRI's residential and commercial properly, the Punjab Rent Restriction Act, 1949, has been amended.

The NRIs are entitled to several concessions and incentives on investment. There are also NRI Police Helplines to provide relief to non-resident Punjabis visiting the state. There is one at Indira Gandhi International Airport, New Delhi as well. Punjab has also developed an interactive Internet website.

Sikh NRIs looking for land in Punjab - NRI
Chandigarh, October 9
Shell-shocked by incidents of hate crime after the September 11 terrorist attacks in the USA, Punjabi diaspora in general and Sikhs in particular, have started exploring the opportunities of investments, both in real estate and industry back home.

A substantial Punjabi population settled in North America continues to feel uneasy as it is viewed with suspicion by the average American.

The Sikhs by and large are eager to buy property in India, especially in Punjab, the land of their birth and also make investment in financial and industrial ventures. “You never know when such attacks take epidemic form to put our future at stake in the countries where we have made a new home”, said Mr Satnam Singh Atwal, an American Sikh. “So, it will be in the fitness of things for us to plan for contingency and at least own a house in Punjab to secure our future”, he added.

Mr Satnam Singh along with several other Punjabi NRIs is currently visiting Punjab. His colleagues corroborate his views.

Mistaken for Arabs, Sikhs had been victims of hate crime in the USA, UK, Australia and now even in New Zealand.

In fact, Mr A.R. Talwar, Managing Director of the Punjab Agro Industries Corporation, told The Tribune that his corporation had got a lot of response from Punjabi NRIs for making investment in Food Park to be set up near Sirhind for which tenders have been floated recently.

For Americans, Europeans and other foreigners, it is difficult to distinguish between Sikhs and an Arabs, especially those sporting turbans and beards. Taliban, like most of the Sikhs, have flowing beards and similar physical features.

The Sikhs are perplexed at establishing their distinct identity, which makes them different from Arabs. Mr Balbir Singh Gosal , another American Sikh, said the community was seriously thinking of a solution of this problem.

“I am an American Sikh, God bless America”, such stickers have been distributed by Yogi Harbhajan Singh asking Sikhs to put these on their cars, obviously to convey a message to public at large that they have no connection with Arabs. Besides, Sikhs have been putting American flags on their vehicles and homes.

Mr Jasbir Singh, a Candian Sikh, said the Sikhs normally fund elections in the USA, Canada and UK, at the individual level. Instead , the Sikh community should fund the election campaign of political parties collectively for a strong political clout in the government. In case of any exigency, political parties funded by Sikhs would come to their rescue instantly.

Though Sikh community leaders have been “hyper active” in various areas, but on the media front they have not done much. They should have their own nationally televised channels to relay programmes about Sikh way of life, background and relating to their identity, says Mr Mohinder Singh Gill, a former Olympian, settled in the USA. He said Sikhs should participate in various charity programmes. He along with other Sikhs collected $ 10,000 after the terrorist attacks to contribute to the fund generated to help the families of victims.

Tuesday, September 25, 2001

NRIs to look for 2nd home in India - NRI
FEARING a backlash against Asians in the US, NRIs are likely to look for a second home in India. Property developers are expecting a spurt in the demand for residential proper-ties in the next six months.

This will however not amount to any substantial price fluc-tuations as supply will continue to be more than demand. Nevertheless, the demand-supply gap is likely to narrow down a few months hence.

“Yes, queries from NRIs are coming in droves. Keeping the present circumstances in mind, they are on the look out for a second home in India. We are expecting a surge in demand from NRIs,’’ said T C Goyal, MD of DLF Universal.

Chennai-based property consultant V Nagarajan, also the organiser of real estate road shows abroad, believes that the demand from NRIs will pick up and those planning to buy residential properties in India will now firm up their plans.

“I have received a lot of enquiries from both HIB Visa holders and those settled abroad for years.’’ Nagarajan said. He added that the enquiries are mainly for Pune, Bangalore, Chennai, Hyderabad, Mumbai and Delhi. The US tragedy apart, the economic slowdown is also propelling them to invest in a safe and secure haven.

According to property consultants, Arora & Associates, the US crisis will have some re-flections on the Indian property market as well. Prices are expected to rise by 5 per cent only.

“Properties are still the safest investment option in the present context since all other investment options like shares and gold have taken a strong beating as a conse-quence of the US attacks,’’ said Rajesh Arora, ceo of the company.

He said that unlike the share or the bullion market, the property market after absorbing the initial shock may resurge back and may also be benefited.

The 1 million strong NRI/business community, in order to minimize their costs and overheads, is expected to shift their manpower intensive backend operations to the third world countries.

100% stake likely for NRIs, PIOs, OCBs - NRI
SCAM or no scam, OCB is still a preferred three-letter word. At least in the North Block. The finance ministry is believed to be drawing up a plan to remove the foreign investment cap for NRIs, persons of Indian origin (PIOs) and NRI-dominated Overseas Corporate Bodies (OCBs).

In essence, if the proposal goes through, the alphabet soup of NRIs, PIOs and OCBs can now theoretically invest up to 100 per cent in an Indian company.

Strangely, this proposal comes even as the finance ministry’s other recommendation to permit foreign institutional investors to hold up to 74 per cent in an Indian company is yet to see the light of day.

If both the proposals do come through, then NRIs, PIOs and OCBs (in which NRIs own a stake of 60 per cent and above) will definitely be at an advantage over the FIIs.

Currently, the NRI-PIO-OCB group is allowed to hold up to 24 per cent of the paid-up capital of a company, which can be raised to 49 per cent with the shareholders’ approval. One guess is that the MoF has come up with the 100 per cent proposal as a response to the FII recommendation made earlier.

Significantly, the proposal, which is awaiting clearance of the finance minister Yashwant Sinha, has come at a time when the Sebi first and second interim reports into the securities market scam provide significant evidence of OCB involvement. The first Sebi interim report had found evidence of OCBs joining hands with local operators to rig stock prices.

The high-level committee on capital markets (HLC) — comprising RBI governor Bimal Jalan, finance secretary Ajit Kumar and Sebi chairman D R Mehta, which had discussed the interim report — had then taken the view that following the ban on badla, the scope for abusing market positions had now been minimised.

Sebi has since submitted its second interim report, which now makes a stronger case for curbing the activities of the OCBs. The finance ministry and the HLC secretariat is currently processing the report and some steps may be taken, if found necessary, say officials.

The BJP government has so far displayed a soft spot for NRIs and NRI-promoted companies. The credit for issuing PIO cards and placing foreign passport-holders of Indian origin (some generations removed) on par with NRIs was the BJP government's initiative. Till the BJP-coalition government came to power, the NRIs and OCBs were treated on par with FIIs.

Gradually, they have been accorded a preferential status with greater benefits being extend to them. Investment advantages apart, the NRIs, PIOs and OCBs enjoy many other benefits which are not otherwise available to FIIs.

News Archive

© 1999 - 2001 All Rights Reserved
Ambika Business Communications Private Limited, Punjab, India.
Disclaimer

Daily News are sorted by Makhan, from Regional Newspapers Groups like :
The Tribune (TT) , The Indian Express(IE), The Daily Ajit(DA), The Punjab Kesari(PK),
The Jagran(TJ), The Amar Ujala(AJ). Times of India (TOI), Hindustan Times (HT)
Punjablinks cannot be held liable for the authenticiy of the news.
For Further Details Refer to Disclaimer.