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Govt
to introduce 'Refund Banking'
New Delhi: The government is planning to introduce
Refund Banking, which is on the concept that instead of
receiving refunds from the Income Tax Department, the
government is considering a tie-up with a bank or a few
banks, which will transmit the refunded amount in the
account of the assessee. This will also reduce the interface
between the asessing officers and the assessee.
At present, the procedure is that an assesse files his
return with the Income Tax Department, which after processing
the case refunds the amount through a cheque. Officials
said the entire process will be computerised. After assessees
file the return, it will go to the back office, which
will have centrally-controlled operations in three or
four locations.
The revenue department is at present talking to the RBI,
the chief accounts officer of the government of India,
as well as officials of the Treasury Department regarding
the new scheme. Officials said at present, a part of the
refunds is handled by the State Bank of India, but once
'Refund Bankers' are appointed, tax refunds would be institutionalised.
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Bonds
fall
Bangalore: Bonds crashed during the week due to fears
of inflation, foreign institutional investors exiting
the India market and high international oil prices.
The fears of inflation are very real at present and bankers
said, barely two days after retail prices were revised,
the Reserve Bank of India hiked the reverse repurchase
and repo rates to 5.75 and 6.75 per cent respectively.
Despite this hike, the RBI's mop-up at the weekend Liquidity
Adjustment Facility auctions was high, close to Rs57,000
crore. Clearly, there was no dearth of liquidity in the
banking system. Despite the surfeit of liquidity, yields
remained firm at the weekly Treasury Bill auctions. The
yield on the 91-day Treasury Bill rose to 5.74 per cent.
The yield on the 364-day T-Bill was 6.48 per cent.
G-secs-The 10-year yield to maturity (YTM) also hardened
to a four- year high of 7.84 per cent up sharply from
last week's 7.67 per cent.
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