CBDT Signed Four more Unilateral Advance Pricing Agreements
- The Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance has entered into four more unilateral Advance Pricing Agreements (APAs) on February 6, 2017.
- The four APAs signed pertain to the Manufacturing, Financial and Information Technology sectors of the economy. The international transactions covered in these agreements include Contract Manufacturing, IT-enabled Services and Software Development Services.
- The APA Scheme was introduced in the Income-tax Act in 2012 and the “‘Rollback’ provisions were introduced in 2014. The scheme endeavors to provide certainty to taxpayers In the domain of transfer pricing by specifying the methods of pricing and determining the prices of international transactions in advance.
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RBI Set-up Panel to Review Cyber Threats
- The Reserve Bank of India (RBI) announced the setting-up of an Inter-disciplinary Standing Committee on Cyber Security on February 27, 2017.
- The 11 -member Committee, which will be chaired by the RBI ED Meena Hemchandra has been entrusted to review the threats emerging form use of technology, study adoption of new technology standards and suggest appropriate policy interventions to strengthen cyber security and resilience.
- Last year in June the the RBI had issued guidelines to banks mandating them certain cyber security preparedness rules for addressing risks emerging form new technology.
RBI Allowed Multilateral FIs to Invest in Masala Bonds
- The Reserve Bank of India (RBI), permitted multilateral financial institutions to invest in rupee denominated bonds popularly known as ‘masala bonds’ issued by Indian entities on February 16, 2017.
- The RBI has withdrawn the instruction regarding submission a fortnightly return on Forward Rate Agreement (FRA) and Interest Rate Swap (IRS) to Monetary Policy Department with a copy to various departments of the central bank.
- In order to provide more choices of investors to Indian entities issuing rupee denominated bonds abroad, it has been decided to also permit multilateral and regional financial institutions where India is a member country, to invest in these rupee denominated bonds. The term is used to refer to rupee-denominated borrowings by Indian entities in overseas markets.
Sixth Bimonthly Monetary Policy Review Released
- The Reserve Bank of India (RBI) kept the policy rate unchanged at the sixth bimonthly monetary policy review on February 7, 2017.
- The RBI maintained its key policy rate unchanged at 6.25%. The reverse repo rate stood at 5.75%. The RBI secs the inflation number at 4-4.5% during the April-September period. GVA growth for 2016-17 is projected at 6.9%.
- The Current Account Deficit (CAD) is likely to remain muted and below 1% of GDP in 2016-17. There will be no limit on cash withdrawal from March 13, 2017.
- The RBI will also raise the withdrawal cap to Rs 50000 a week from t 24000 a week for savings accounts with effect from February 20.
Union Government Approved SBI Merger with 5 Associate Banks
- The Union Cabinet on February 15, 2017 approved the merger of State Bank of India with five of its associate banks including State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore.
- The merger is likely to result in recurring savings, estimated at more than Rs 1000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds.
- The merger is likely to result in recurring savings, estimated at more than Rs 1000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds.
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