29th May 2009

CUSTOMS
Customs duty exemption for Tamiflu drugs
Delhi : The Central Board of Excise and Customs (CBEC) has allowed duty free import of one million capsules of Tamiflu 75 mg (Oseltamivir Phosphate).The imports would be carried out by Roche India Ltd on behalf of the Indian government. This has been allowed to create a buffer stock of the drug, Oseltamivir Phosphate, which is used for the treatment of H1N1 influenza.An official release said that the buffer stock is to be maintained by Roche India Ltd on behalf of the Indian Government for supply to the Government only.The customs duty exemption order has been issued on the recommendations of the Department of Health and Family Welfare, the release added.

EXCISE
More excise sops only after review of end-user benefits
Delhi : Further cuts in excise and service taxes this fiscal will depend on whether industry has passed on the benefits of the cuts so far to consumers. The finance ministry has started taking stock of the extent to which various sectors have passed on the benefits of the sops already announced to end-users. “We have to assess to what extent the industries have passed on the benefits of the cuts to end-users before taking a call on further cuts. We are starting the stock-taking process,” finance secretary Ashok Chawla said. As part of the third stimulus package, the government had announced a 2% cut in excise duty for all products that attracted an excise rate of 10%. Service tax was also cut by 2%. This was besides the 4% across-the-board cut in excise duty in December 2008

SEBI
SEBI may relax rules to help companies raise funds for their arms
Maharashtra : The Securities and Exchange Board of India (Sebi) is considering a proposal to exempt infrastructure companies from the current rule that restrains parent companies from raising money through public issue of debentures for funding group companies. Industry officials say the move is aimed at boosting the corporate debt market by making it easier for companies to tap this mode of fund raising. Also, many infrastructure companies are waiting to tap the debt market to fund their projects housed in special purpose vehicles.

RBI
Banks must promote financial literacy: RBI
Chandigarh : Reserve Bank of India has asked both the private as well as public sector banks to set up more Financial Literacy and Credit Counselling Centers (FLCC) in every district and has suggested the lead banks to hold a public meeting every quarter in each district to address grievances of the bank customers.RBI’s high level committee headed by deputy governor Usha Thorat has made this recommendation in its report based on the feedback that barring a few, most of the operational centers were not performing the intended role and were promoting the bank’s products, providing investment advice etc. Also arm’s length distance with the parent bank was not maintained by some centers, which often gave an impression that such centers were an integral part of the bank. Lead banks are lenders assigned by RBI in a specified area to promote banking services and financial literacy.

IRDA
Irda plans valuation roadmap in 15-20 days
Maharashtra : At a time when some life insurers are planning to list on Indian bourses, the Insurance Regulatory and Development Authority (Irda) is working on a methodology to arrive at their valuations. According to senior Irda officials, the regulator will come up with the roadmap in 15-20 days. Irda is in talks with the Institute of Chartered Accountants of India (ICAI) for coming out with a uniform method for valuations.

Finance & Money Markets
Govt banks say room for rate cut
Maharashtra : In view of Finance Minister Pranab Mukherjee’s remark that he will ask banks for a “benign plan of action” to stimulate economic growth, public sector banks have indicated that there is room for further cuts in lending rates. Private sector banks, however, say they will first focus on reducing their cost of funds.Bapi Munshi, president, treasury at India’s third-largest private sector lender, Axis Bank, said, “We cut our prime lending rate (PLR) by 50 basis points (bps) recently after a 50 bps cut in April. We have not cut our deposit rates recently, unlike some other banks. We need to first take a call on deposit rates.”
Sensex jumps 3.83% on firm global cues
Maharashtra : The key benchmark indices clocked smart gains after Finance Minister Pranab Mukherjee said reviving growth momentum is a top priority for the government. Media reports that the government is considering a proposal to do away with fringe benefit tax, aided the rally. Firm global markets also supported the domestic bourses. World stocks rose on a strong US consumer confidence index.Banking, metal and realty stocks led the rally. The BSE 30-share Sensex was up 520.41 points or 3.83%. The barometer index moved past psychological 14,000 mark.The market was volatile. Stocks surged in early trade tracking firm Asian equities. After extending gains in mid-morning trade, the market came sharply off the higher level in early afternoon trade. The market firmed up again later. It surged in late trade.
Cos’ overseas borrowings fall 73% to $298.63 m in April
Maharashtra : Resource mobilisation by India Inc through external commercial borrowings/foreign currency convertible bonds in April was sharply down by 73 per cent to $298.63 million vis-À-vis $1.113 billion in the previous month.Indian companies’ ability to raise funds from overseas markets is a function of investors’ appetite to take long-term exposure and interest rate arbitrage. Bankers pointed out that last month many overseas investors refrained from taking an exposure to India due to the ‘event risk’ on account of the general elections. Moreover, it was cheaper to raise funds in rupees than in foreign currency.

INTERNATIONAL BUSINESS
GM Debt-Equity Swap Fails Before Bankruptcy Deadline
General Motors Corp. failed to get 90 percent of its bondholders to swap their claims for stock, pushing the largest U.S. automaker closer to bankruptcy.The principal amount of notes tendered was “substantially less than the amount required by GM” and, as a result, “the exchange offers will not be consummated,” the company said today in a statement. GM faces a government-imposed June 1 deadline to restructure or file for bankruptcy.

MERGER & ACQUISITION
Automatic CCI nod for M&As of sick cos Delhi : The Competition Commission of India (CCI), which will soon start scrutinising and clearing big corporate M&As, will give automatic approval to such deals if one of the parties involved is in financial distress, the regulator told ET. CCI, which has already opened its doors to complaints of anti-competitive practices suchascartelisation and predatory pricing, is now finalising the merger regulations. Once these are notified, it will be mandatory for all big corporate deals to get CCI’s endorsement that they will not adversely affect competition in the market. The regulator can also direct the parties to exclude certain businesses from the purview of the deal to protect healthy competition in the market.