20 april 2001
uti gets relief on tax demand
mumbai: the whopping rs. 1,100 crore tax demand that hung over it's had like a damocles sword, has been removed. uti, the country's largest mutual fund, won an appeal against the order when the bombay high court quashed the tax demand which sought to levy tax for the assessment years 1992-93 to 1999-2000.
although the court's order states that tax department has the right to levy tax prospectively, it would not affect uti since the government has stopped levying interest tax from april 1, 2000. however, in future if the government reintroduces interest tax, uti will be liable to pay the tax.
uti has not been paying tax on its interest income on the grounds that it is exempt from payment of tax on any income, profits or gains derived from any source, under the uti act (section 32). according to uti, the interest earned by it is nothing but income earned and hence exempt from taxation.
i-t sources said the department would move the apex court challenging the order of high court.
18 april 2001
rbi bans deals as more banks report failure
mumbai: the reverberations of the madhavpura bank scam it seems will never end. now four more cooperative banks have reported failure and rbi has sent circulars to all banks-private, public and foreign-asking them not to have dealings with the failed banks.
the four new blacklisted banks are the mumbai-based friends cooperative bank, western cooperative bank, sitara cooperative bank and first city cooperative bank. apart from these, two other banks, classic cooperative bank and city cooperative bank, have failed in the recent past.
rbi, in a circular sent to the banks has instructed "restriction on dealing with banks," the rbi has indicated that since these banks are under watch, it was advisable for other banks not to have any commercial transaction with them.
these four banks had been categorised as weak for quite some time by the rbi which had also limited withdrawal of deposits to rs 1,000. this meant that depositors could only withdraw rs 1,000 per head.
sources said that apart from the western cooperative bank, which failed because it lent rs 20 crore to an individual borrower on a deposit base of rs 3 crore, the other banks failed due to mismanagement of funds.
17 april 2001
kapol bank; another victim of madhavpura bank crisis?
mumbai: the latest victim of the madhavpura bank crisis appears to be the kapol co-operative bank. two of the bank's directors have resigned and have moved the reserve bank of india for supersession of its board, alleging misuse of funds by the management.
himatbhai goradia and ashwin bhuva, supported by bjp mla hemendra mehta, have requested the rbi to initiate an inquiry into the alleged misuse of funds and take over the administration of the bank.
mehta said that, "the non-performing assets (npas) of the bank are around rs 63 crore -- much more than the actual figure shown by the bank. the npas are unrecoverable.
kapol bank chairman kd vora has denied the allegations, "our npas are pegged at only seven per cent -- around rs 22 crore," vora said. the bank has a deposit base of rs 294 crore and advances of rs 191 crore, he said.
mehta however alleged that the bank had dismantled the system of clearing of advance proposals by a four-member committee and were now cleared by the chairman or vice-chairman.
according to vora, kapol bank lost deposits of about rs 70 crore within five days. he said, "the bank had deposits of rs 350 crore till march 24 and after the madhavpura expose we lost rs 70 crore in just five days between march 25 and 31," he told reporters in mumbai today.
vora claimed that presently the bank's deposit base had stabilised at rs 280 crore and that the depositors were coming back to its branches.
clarifying on kapol bank's involvement in madhavpura scam, vora said, "as a part of normal banking operations we had lent rs 8 crore to mmcb in the form of call money and hope to soon recover the amount from the bank".
16 april 2001
ifc approves of changes in global trust
new delhi: the international finance corporation, which is the second largest shareholder in the troubled global trust bank, endorsed the management changes which saw the appointment of mr. rs hugar, as the new chairman and managing director of the bank. the changes have been brought about by the resignation of mr. ramesh gelli, who was embroiled in a share price rigging scandal.
mr. geli stepped down from the post of chairman and managing director following the controversy over his alleged involvement with broker ketan parekh resulting in price manipulation of the scrip prior to its proposed merger with uti bank.
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