January 30, 2019

Foreign Direct Investment Limit in India.

FDI Limit In India

(1) White level ATM (Automated Tellor Machine): 100 percent. 

(2) Single Brand Retail: 100 percent.

(3) Telecom Sector: 100 percent. 

(4) Pharmaceutical Sector: 100 percent 

(5) Education Sector: 100 percent. 

(6) Medical Devices: 100 percent. 

(7)Agriculture Sector: 100 percent .

(8) Couriers service: 100 percent. 

(9) Assets Reconstruction: 100 percent 

(10) Tourism Sector: 100 percent.

 (11) Railway Infrastructure: 100 percent. 

(12) Stock Exchange: 49 percent. 

(13) Defence Sector: 49 percent .  

(14) Power Sector: 49 percent. 

(15) Civil Aviation: 49 percent. 

(16) Insurance and Sub-activities: 49 percent.

(17) Pension Sector: 49 percent.

(18) Print Media: 26 percent. 

(19) FM Radiation: 26 percent. 

(20) Public Sector Bank: 20 percent . 

(21) Multi Brand: 51 percent.

 (22) Private Sector Bank: 74 percent. 

(23) Credit Rating or Information Sector: 74 percent .     

Negotiable, nonnegotiable and Semi Negotiable Instruments.

There are three types of instrument pertain with banking sector- 

(I) Negotiable instrument(Transferable instrument): Dividend warrant, Exchange bill, Promissory note,Bank draft,Commercial paper,Bearer debenture, Treasury bills, Pay order or Banker's cheque, Warehouse receipts,Bank note,Share warrant etc. 

(II) NonNegotiable instrument (NonTransferable instrument): Money order, Postal order, Credit Card, Share certificate, Airway bills, Deposit receipt, Crossed cheque etc. 

(III) SemiNegotiable instrument (semiTransferable): Railway receipt, Bill of Landing, warrant, Letter of credit, Dock,Carrier receipt etc.

Country and their Currency

Some important Country and Currency-
United State America-Dollar. 
Singapore-Dollar.
 Hong Kong-Dollar .
 Canada- Dollar .
 Australia-Doller. 
France- Euro.
 Germany-Euro.
 Lithuania- Euro.
 Netherlands- Euro. 
Portugal- Euro . 
Vatican- Euro. 
Zimbabwe-Dollar . 
Argentina- Peso. 
Chile- Peso. 
Cuba- Peso .
 Mexico- Peso.
Philippines- Peso . 
Egypt- Pound.
 Syria- Pound.
United Kingdom- Pound. 
Denmark- Krone.
Norway- Krone.
 India- Rupee. 
Nepal- Rupee. 
Pakistan- Rupee. 
Sri Lanka- Rupee. 
Afghanistan- Afghan. 
China- Rimindbi,Yuan.
 International Monetary Fund-   Special Drawing Rights. 
 Japan- Yen.
 Malaysia- Ringgit.
 North Korea- Won. 
South Korea- Won.
Brazil- Real . 
Iran- Real.
 Thailand- Baht. 
United Arab Emirates- Dirham. Saudi Arabia- Riyal. 
Qutar- Riyal. 
Indonesia- Rupiah.
Maldives- Rufiyaa.
 Russia- Ruble.
 South Africa- Rand 
Switzerland- Franc.
Turkey- Lira.
 Austria- Euro . 
Bhutan- Ngultrum . 
Bangladesh- Taka .  
Iraq- Dinar . 
 Ukraine- Hryvnia.                                

January 29, 2019

Some important Credit Rating Agencies

 About Credit Rating Agencies-                                                                             

Credit Rating Agencies: Credit rating is the process of credit risk valuation for the corrate debt instruments reflection borrower's expected capability and inclination to pay Interest and principle in a timely manner. The concept was first time introduced by John Moody in 1909.                                               

 Methodology:-A ration exercise is done at the request of the company, It applies to a particular debt obligation of the company and is not a general purpose evolution of the company.                                                                        
Credit Rating Agencies in India    

Credit Rating Agencies (CRA) assess creditworthiness of organisation and different entities. In simple words, these agencies analyse a debtor’s ability to repay the debt and also rate their credit risk. All the credit rating agencies in India are regulated by SEBI (Credit Rating Agencies) Regulations, 1999 of the Securities and Exchange Board of India Act, 1992. There are a total of six credit agencies in India viz, CRISIL, CARE, ICRA, SMREA, Brickwork Rating, and India Rating and Research Pvt. Ltd.   Top Credit Rating Agencies in India
(1) Credit Rating Information Services of India Limited (CRISIL): - CRISIL is one of the oldest credit rating agencies in India. It was launched in the country in 1987 following which the company went public in 1993. Headquartered in Mumbai, CRISIL ventured into infrastructure rating in 2016 and completed 30 years in 2017. CRISIL acquired 8.9% stake in CARE credit rating agency in 2017. It launched India's first index to benchmark performance of investments of foreign portfolio investors (FPI) in the fixed-income market, in the rupee as well as dollar version in 2018. The company’s portfolio includes, mutual funds ranking, Unit Linked Insurance Plans (ULIP) rankings, CRISIL coalition index and so on.
(2 ) ICRA Limited :- ICRA Limited is a public limited company that was set up in 1991 in Gurugram. The company was formerly known as Investment Information and Credit Rating Agency of India Limited. Before going public in April 2007, ICRA was a joint venture between Moody’s and several Indian financial and banking service organisations. The ICRA Group currently has four subsidiaries - Consulting and Analytics, Data Services and KPO, ICRA Lanka and ICRA Nepal. At present, Moody’s Investors Service, the international Credit Rating Agency, is ICRA’s largest shareholder. ICRA’s product portfolio includes rating for - corporate debt, financial rating, structured finance, infrastructure, insurance, mutual funds, project and public finance, SME, market linked debentures
(3) Credit Analysis and Research limited (CARE):- Launched in 1993, CARE offers credit rating services to areas such as corporate governance, debt ratings, financial sector, bank loan ratings, issuer ratings, recovery ratings, and infrastructure ratings. Headquartered in Mumbai, CARE offers two different categories of bank loan ratings, long-term and short-term debt instruments. The company also offers ratings for Initial Public Offerings (IPOs), real estate, renewable energy service companies (RESCO), financial assessment of shipyards, Energy service companies (ESCO) grades various courses of educational institutions. CARE Ratings has also ventured into valuation services and offers valuation of equity, debt instruments, and market linked debentures. Moreover, the company has launched a new international credit rating agency ‘ARC Ratings’ by teaming up with four partners from South Africa Brazil, Portugal, and Malaysia. ARC Ratings has commenced operations and completed sovereign ratings of countries, including India.
(4) Brickwork Ratings (BWR):- Brickwork Rating was established in 2007 and is promoted by Canara Bank. It offers ratings for bank loans, SMEs, corporate governance rating, municipal corporation, capital market instrument, and financial institutions. It also grades NGOs, tourism, IPOs, real estate investments, hospitals, IREDA, educational institutions, MFI, and MNRE. Brickwork Ratings is recognised as external credit assessment agency (ECAI) by Reserve Bank of India (RBI) to carry out credit ratings in India.
(5) India Rating and Research Pvt. Ltd. :- India Ratings is a wholly-owned subsidiary of the Fitch Group. It offers credit ratings for insurance companies, banks, corporate issuers, project finance, financial institutions, finance and leasing companies, managed funds, and urban local bodies. In addition to SEBI, the company is recognised by the Reserve Bank of India and National Housing Bank.
(6) Small and Medium Enterprises Rating Agency of India (SMERA): - Established in 2005, SMERA is a joint initiative of SIDBI, Dun & Bradstreet India and leading banks in India. SMERA has joined hands with prominent institutions such as IIT Madras, The Bangladesh Rating Agency Limited, CAFRAL, CoinTribe, and SIES. Apart from its shareholder banks, SMERA has also entered into MoUs with over 30 Banks, Financial Institutions and Trade Associations of the country.                                                                                                         #Credit rating agency-Established year- service- Head quarter.              (1) Credit Information Bureau India limited(2000): Research, Risk and Policy Advisory -Mumbai.                   

(2) Small and Medium Enterprises Rating Agency(2005): Research, Risk and Advisor-Mumbai .                       

(3) Credit Analysis and Research Limited (1993): Credit Rating Risk- New Delhi.                                           
 (4) Investment Information and Credit Rating Agency (1991):Credit Rating and Financial Consulting-Gurgaon(Haryana).                            
(5) Bric Work India (2007): Research, Risk and Advisory-Bangalore(Karnataka).                        

(6) Credit Rating Information Services of India Limited (1987): Research, Risk and Policy Advisory-Mumbai.                                               
(7) Moodys Investor Service (1909): Bond Market- New york , USA City.   

(8) Fitch Rating (1913): Financial Services-New York City, USA and London, UK .                                       

 (9) Standard and Poor (1860): Financial Services-New York city, USA City. 

Banking Related Committee

Some important banking committee-(1)Vaghul Committee: Mutual fund scheme.
(2) Abid Hussain Committee: Development of Capital Markets.
(3) Wanchoo Committee: Direct Taxes.(4) Bhagwati Committee: Unemployment.
(5)  Bhagwati Committee: Public Welfare .
(6) Thingalaya Committee: Restructuring of Regional Rural Bank .
 (7) C Shah Committee: Non Banking Financial Company .
(8) Tandon Committee: working capital Term Loan .
 (9) Tandon Committee: Industrial Sickness .
(10) B Sivraman Committee: Institutional Credit for Agricultural and Rural.
(11)  SS Tarapor Committee: Capital Account Convertibility .
(12)  C Rao Committee: Agricultural Policy.
 (13) Shome Committee: General Anti Avoidant Rule (GAAR). 
(14) Chatalier Committee: Finance to small scale Industry . 
(15)  RK Hajare Committee: Differential Interest Sector .
(16) Cook Committee (under Basel Committee): Capital Adequacy of banks.(17) Rajamannar Committee: changes in banking laws, bouncing of cheques etc. (18) Rajamannar Committee: Center-State fiscal relationships.
(19)Dharia Committee: Public Distribution System.
(20) Raja Chelliah Committee: Tax Reforms.
(21)  DR Gadgil Committee: Agricultural Finance .
(22)  Gadgil Committee (1969): Lead banking system.
(23)  P Selvam Committee: Non Performing Assets of Banks. 
(24) Dutta Committee: Industrial Licencing.
(25)  Narsimaham Committee: Financial system (reduction CRR and SLR) .
 (26) Goporia Committee: Customer service in banks .
(27) M V Nair Committee: Priority sector Lending.
(28) Hathi Committee: soiled banknotes. (29) Mrs. KS Shere Committee: electronic fund transfer.
 (30)  Hazari Committee (1967): Industrial Policy. 
(31)  ML Dantwala Committee: Regional Rural Banks.
(32) Khanna Committee: non performing assets.
(33) Mahalnobis Committee: income distribution. 
(34) Marathe Committee: Licencing of New Banks . 
(35) LK Jha Committee: Indirect Taxes .

Stock exchanges and their Index

Some important stock exchanges and their Index-                        
 
 (1) NSE(National Stock Exchange): Nifty-50 , It is the largest stock exchange consists of 50 Companies in India.  
  
   (2)  BSE(Bombay Stock Exchange): SENSEX(Sensitive Index), It is oldest stock exchange consists of 30 companies in Asia located at Dalal Street in Mumbai
 
(3) NASDAQ (National Association of Securities Dealers Automated Quotation System): NASDAQ-100, It is the first electronic stock market in the world located in New York.      
 
(4) NYSE(New York Stock exchange): Dow Jones, It is world's first and largest stock market.                  
 
(5) LSE (London Stock exchange): FTSE-100 (financial times and London  stock exchange).   
 
(6) Shanghai Stock exchange: composite index of China.              
 
(7)  SGX(Singapore Exchange): STI(straits times Index).                
 
 (8)  Tokyo Stock Exchange:Nikkei-225, Japan                              
 
(9) Hong Kong Stock Exchange: Hang Deng .
 
(10)  Korea Stock Exchange: Kospi, South Korea-seoul.              
 
  (11) German Stock Exchange: DAX(Deutsche Aktein Index).              
 
 (12)   Shenzen Stock Exchange: composite index of China.          

 (13) France Stock Exchange: CAC-40 (Citation Assisteen Continuous).  

January 27, 2019

NITI Aayog

Some important points about NITI Aayog-                                                                       
  Introduction: The Government of  India has decided to set up NITI Aayog in place of the erstwhile Planning Commission, as a means to better serve the needs and aspirations of the people of India. The new  institution will be a catalyst to the developmental process- Nurturing an overall enabling environment, through a holistic approach to development going beyond the limited sphere of the Public sector and Government of India. 
This will be built on the foundation of :
(a) An empowered role of States as equal partners in national development; operationalizing  the principle of Cooperative Federalism. 

(b) A knowledge hub of internal as well as external resources; serving as a repository of good governance best practices, and a think Tank offering domain knowledge as well as strategic expertise to all levels of government. 

(c) A collaborative platform facilitating Implementation; By monitoring progress, plugging gaps and bringing together the various Ministries at the Center and in States, in the joint pursuit of development goals.                                                                                   
India's Planning Commission renamed as " NITI Aayog" (National Institution for restructure the institution that the government believes has run it course. The name replaced " Yojana(Planning) " with " NITI ( Policy). 
The Planning Commission had suggested to a group Chaired by Prime Minister Narendra Modi that its replacement body structured to meet the need of changing economic paradigm and comprise sectoral experts and States representative. The restructured plan panel is a combination of three or four divisions. 
 Full Name of NITI is National Institution for Transforming India.                                                                                    
Some key points-
 * Prime Minister of India as the Chair Person. 
* Governing Council comprising the Chief Ministers of all the States and Lt. Governors of Union Territories.
 * Regional Councils formed to address specific issues and contingencies impact more than one state or a region. The regional councils convened by the Prime Minister and comprise the Chief Minister of States and Lt. Governors of Union Territories in the region. These are Chaired by the chairperson of the Niti Ayog.                           
* Specialists, experts and practitioners with relevant domain knowledge as special invitees nominated by PM. 
* Vice-Chairperson: Appointed by Prime minister.                                                                 
* Full-time members: appointed by government of India . Time duration for these members and number of members not decided it depends on Government of India. 
* Part-time members: Maximum of 2 from leading universities, research organization and other relevant institutions in an ex-officio capacity.
* Ex-officio members: Maximum 4 members of the Union Council of Ministers to be nominated by the PM.
* Chief Executive Officer: appointed by the PM for a fixed tenure, in the rank of secretary to the Government of India.

January 26, 2019

GST and Indian Tax System

What is GST?
 Full form of GST:- Goods and Service Tax.  

Meaning of GST: GST is an indirect tax that will lead to the abolition of all other taxes such as service tax, central sales tax, stated level sales tax,excise duty and value-added tax (VAT). Both Central and state governments will impose GST on almost all goods and services produced in India or imported into the country. Exports will not be subjected to GST. Direct taxes such as corporate tax, capital gain tax and income tax will be affected. The highest rate of GST will be around 15 percent in the first year but after first year come down to 12 percent for second year. 

GST council: The GST  council will be chaired by Union Finance Minister and have a Minister of state for Finance Ministers as its members. While the center will have one-third votes, States together will have two-third say. To adapt a resolution , third-fourth majority would be required. The approval came on the day when the constitution Amendment Act on GST came into effect. GST is a single indirect tax, which will subsume most of the central and state levies such as value added tax,Excise duty,Service tax,Central sales tax,additional Customs Duty and special additional duty of customs.  The GST can be implemented only through a Constitution (122nd Amendment) Bill,2016 which means it needs to be approved by not less than two-thirds of the members present and voting in each House of Parliament. The GST must also be ratified by the legislatures of at least one-half of the States. According to the Article 279A(1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A 
 
GST Bill :- The GST constitution amendment bill needs to be ratified by at least 16 of the 31 states assemblies, including the assemblies of Union Territories Delhi and Puducherry. It would receive a presidential confirmation when that is done and the empowered committee of finance ministers would turn into the GST council to draft the subsequent Bills to be tabled in Parliament in the winter session to enable a rollout of GST by April 1,2017 , however, Congress and Left leaders believe the April deadline to be unrealistic given that much of GST related infrastructure is not ready yet. Date of implementation:-  The Union Government has set target to roll out of the GST from 1st April 2017. 

Administration of GST in India:- There will be two components of GST- central GST and State GST in order to comply with federal structure of India. Thus both center and state have authority to simultaneously levy GST across the value chain. GST will be levied on every supply of goods and services. State will levy and collect the state Goods and Services Tax on all transactions within a state and center will levy and collect Central Goods and Services.
 
GST Rates:- A Committee headed by Chief Economic Advisor Arvind Subramanian has suggested a standard GST rate of 18 percentage, while assuming the low end of the rate at 12 percentage and upper end at 40 percentage on sin goods that are seen as harmful to the society. 

About other taxes- 

( I ) Direct Taxes-  

Income Tax: Income tax levied on personal income. 
Capital Gain Tax: it is part of income tax levied on income of shares, house property etc.  
Corporate tax: Corporate tax is levied on registered companies and corporations 30 percent. 
Wealth tax: it is levied only on unproductive assets such as guest houses, jewellery, residential bungalows.           On Gift Tax ,Minimum Alternative Tax, Zero Tax  we have no proper facts.         

(II) Indirect Taxes:-  Customs Duty: it is levied on Exports and Imports. About 99 percent of customs comes from import duties.
 Stamp Duty: it is levied on sale of the assets and properties
Central.
 Excise Duty: it is levied on domestic production of goods. 
Sales Tax: Largest yield to state government comes from State tax (VAT). VAT tax recommended by LK Jha in  1976 and implemented from 2003-04. 
Service Tax: this tax was recommended by Raja Chellaiah Committee from 1994-95. 
 Luxury Tax: it is levied on who stayed customers in star hotels etc. 
 Land Tax: it is levied on agricultural lands.
 Advertisement Tax: levied on Media and other advertisements.

Licensing of Foreign Banks in India and some important foreign banks with their county,

 Important points for foreign banks that they can set up banking operations in India-    

(1) The initial minimum capital for wholly owned subsidiary will be Rs.500 crore.                                     
 
(2) RBI said that the wholly owned subsidiary will be required to follow Basel-III requirement 9 percent Tier-I capital right from day one. For the first three years, the wholly owned subsidiary will have to maintain Tier-I capital at 10 percent.                      
(3) The new bank should open at least 25 percent of its branches in rural where banks are not established.                                       
 
(4) The Priority Sector Lending requirement will be 40 percent for wholly owned subsidiarys, such as domestic scheduled commercial banks .                                                   

Important Foreign banks and their Countries- 

(1) BNP Paribas Bank: France.            

(2)DBS Bank : Singapore.   

(3)Deustsche  Bank: Germany.  

(4)Societe Gadnerale Bank : France. 

(5)China Trust Commercial Bank: Taiwan.                                       
 
(6)ABN AMRO Bank: Netherlands.

 (7) JP Morgan Chase Bank: United State Kingdom.                                 

 (8) Bank of America: United State America.                              

(9)Standard and Chartered Bank: United Kingdom.                  

 (10)Scotia Bank: Canada.     

(11)Royal Bank of Scotland: United Kingdom.                                 

(12)Bank of Ceylon: Sri Lanka. 

(13)Barclays Bank: United Kingdom. 

(14) Citi Bank: United State Kingdom.  
(15)Abu Dhabi Commercial Bank: United Arab Emirate.            

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