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Banks to pay 3% IGST on gold imports, says CBEC

Clarifying issues on the goods and services tax (GST) related to gems and jewellery, the government on Monday said that banks importing gold and precious metals will have to pay 3 per cent tax in the new indirect tax regime but it can be claimed as input tax credit.

In a fresh set of frequently asked questions (FAQs), the central board on excise and customs (CBEC) said that banks earlier did not pay any value-added tax (VAT) on import of precious metals. They only paid customs duty.

Banks strike on Tuesday

Services at public sector banks may take a hit on Tuesday as all unions under the aegis of UFBU have threatened to go on strike against the government's proposed consolidation move besides raising a host of other demands.

Most banks have already informed their customers that functioning of branches and offices will be impacted if the strike takes off.

Operations at private lenders like ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank are expected to be normal except delay in cheque clearances. As many as 21 PSBs control 75 per cent of the total business.

RBI steps to curb NPAs fall flat

RBI’s efforts to curb rising non-performing asset (NPA) levels in the banking sector seem to have fallen flat.

With the bad loan crisis of banks deteriorating further in the first quarter of current financial year and the expectation that the coming months will be equally bad with small and medium sectors still struggling to repay loans, efforts to tackle bank NPAs look a non-starter.

Insurance cos lead primary market offering

Financial sector companies led by insurance companies, stock exchanges and small finance banks are likely to dominate the primary market offering in the coming months as has been the trend so far in 2017.

BSE was the first company to list in 2017. It was followed by Housing and Urban Development Corporation (HUDCO), Central Depository Services(CDSL) and AU Small Finance Bank.

Lending rates may fall

Banks are pre­paring  for the next round of lending rate cut after setting the ball rolling by cutting savings rates by 25-50 basis points, as barriers to reduce interest rates appears to have dropped, according to bank officials. “Banks cutting saving rates have created a scenario where it looks like you have more of easing,” said Ashutosh Khaju­ria, executive director, Federal Bank.

Jewellery stocks glitter as DGFT curbs round-tripping in gold

Jewellery stocks surged on Wednesday as India banned export of gold products with purity above 22 carats. Industry experts said the curb imposed were intended to crack down on irregularities in the trade.

PC Jewellers, TBZ, Thangamayil Jewellery, Tara Jewels and Rajesh Exports gained in the range of 4-13 per cent on the BSE (See chart).

The Directorate General of Foreign Trade issued a notice limiting shipments of jewellery, coins and medallions to 22 carats or below, without giving a reason.

Gold imports from South Korea to attract 12.5% safeguard duty

The government may soon levy a 12.5 per cent safeguard duty on gold imports from South Korea as the domestic refineries have come a complete stop after surge in inbound shipments of the precious metal from South Korea at zero customs duty.

MMTC Pamp, India’s largest gold refiner, has diverted a consignment to its refinery to Switzerland instead of taking delivery in India while some other refiners have cancelled their order or postponed the delivery. This is the reason why the government wants to bring back the safeguard duty at the earliest.

DeMo saw excess deposits of up to Rs 4.3L cr in first 2 months

Scheduled banks saw unusual cash deposits to the tune of Rs 1.6 lakh crore to 1.7 lakh crore in specific accounts, including basic saving accounts, Jan Dhan accounts and bullion trader/jewellers’ accounts, during the first two months of demonetisation, shows a study undertaken by the Reserve Bank of India (RBI).

RBI mega currency bid, now wants to make in India

With the nation’s narrative being hijacked by FICN (Fake Indian Currency Notes) and Demonetisation over the last year or so, as part of its larger Make in India initiative, Government of India wants to indigenise currency note production with improved security features.

RBI’s problem of plenty

The Reserve Bank of India (RBI) will likely have to drain up to $22 billion in excess liquidity from the financial system as surging foreign investments forces the central bank to absorb the dollar inflows and sell rupees to cap gains in the local currency.

Foreign investments into debt and shares have reached a net $31 billion this year, compared with $2.7 billion in sales last year, due to factors including India’s low inflation and improving economic growth.

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