In a meeting conveyed by Finance minister Pranab Mukerjee, on Saturday, the minister showed optimism in banks refraining from increasing lending rates in-spite of the fact that some public sector banks including SBI indicated probable hikes in lending and deposit rates.

Mr. Mukerjee said, “Though there is some tightening of monetary policy by the RBI we do not expect banks to raise the lending rates. The banks are aware of the actual liquidity position. They (banks) seem to have adjusted their lending plans accordingly.”

In the recent monetary policy unveiled by RBI on July 27, it is found that for commercial banks short-term borrowing and lending rates (repo rate and reverse repo rate) have been heightened. This is done to adjust the excess liquidity in the money market. With such hikes there is apprehension that banks will raise lending rates as cost of borrowing has increased. Lending rates of PSU banks such as Punjab National Bank and Union Bank of India have increased. SBI so far did not make hikes in lending or deposit rates.

O P Bhatt, SBI Chairman, present in the meeting, said, “RBI is always sensitive enough to see that liquidity level is always maintained at reasonable level to meet the fund requirements of banks.” When asked what could be the possible hike in rates, Bhatt said, “It will differ from bank to bank depending on individual bank’s business strategy. But we think if at all there will be any hike it will be marginal—much less than 75 basis points.”

Reviewing the performance of PSU banks, Mukherjee appealed to banks to step up credit disbursements to sectors of the economy like agriculture and industry especially the job oriented SMEs. The minister also urged banks for issuance of Kissan Credit Cards (KCDs) by 20 per cent increase in the current fiscal.

Tags: Banks, Disapprove Rate Hikes, Kissan Credit Cards, money market, public sector banks, Punjab National Bank, RBI, Union Bank of India
Other related topics Small Business Legislation, Small Business Taxes | No Comments »

Private Equity (PE) investment in SMEs took a sharp dip by almost 68% at US$ US$ 580 million in calendar 2009. It made it difficult for small firms to seek safe financial support for executing their growth plans, reveals a Paper on Private Equity on Small and Medium Enterprises (SMEs).

The total number of PE deals signed by SMEs in 2009 stood at 81, while in 2008, it was 187, highlighting a sharp decline.  The fall in PE investments have largely been credit to slowdown, says Mr. D S Rawat, Secretary General ASSOCHAM while releasing findings of the Paper here today.

The report states that in year 2009 was a hard-hitting year for SMEs in India as they not only had to face losses, but also encountered difficulties in accessing adequate equity capital from investors.

The meltdown made PE investors wary of investing in small businesses as there is a great deal of risk involved when it comes to funding cash-strapped companies. Poor returns on investments in the midst of challenging times have forced fund managers to think twice when it comes to putting too much into the sector, added  Mr. Rawat.

Overall, PE deals in India during 2009 numbered 287 amounting to $4.43 billion as against 502 amounting to $ 11.9 billion in 2008. The total value and volume of PE deals reduced by 50% and 40% respectively as compared to 2008.

In the year 2009, 650 Private Equity and M&A deals with a total announced value of $ 26.98 billion compared to 948 deals worth $52.33 billion in the year 2008 and 858 deals.

Tags: adequate equity capita, PE investments, PE investors, Private Equity, returns on investments, small and medium enterprises, small firms
Other related topics Marketing Tips, Small Business Legislation, Small Business News | 1 Comment »

The Finance Minister announced an investment-linked tax incentive scheme for farm produce and warehouses in the Union Budget. The scheme proposes that all capital expenditure to build and operate such facilities would be fully eligible for small business tax deductions. Business expenditures on land, goodwill and financial instruments would not be eligible for the deductions, said LiveMint.com.

The proposal is aimed at reducing waste of perishables and attracting investment into the sector. The scheme was welcomed as a big boost to the cold chain and warehousing sector. Currently, small businesses are eligible for a subsidy and the Income Tax Act allows several exemptions and deductions. These, however, are not sufficient to invite investment. порно xxx

Tags: capital expenditure, cold chain and warehousing sector, Income Tax Act, investment-linked tax incentive scheme, small business tax deductions. Business expenditures, small businesses, Union Budget
Other related topics Small Business Legislation, Small Business News | No Comments »

The Development Commissioner (MSME) announced a support scheme for MSMEs through incubators for entrepreneurial and management development. The main objective of the scheme is promoting technological and knowledge-based ventures to create innovative new business ideas, said the SME Times.

The Ministry of MSME, which oversees entrepreneurship and creation of employment, is heading up the initiative.

For details on the guidelines of the scheme, application form for submission of proposals,

visit: http://www.dcmsme.gov.in/schemes/NMCPscheme.htm

Tags: entrepreneurial and management development, Ministry of MSME, support scheme for MSMEs, technological and knowledge-based ventures
Other related topics Small Business Legislation, Small Business News | No Comments »

A policy revision for units in Karnataka special economic zones (SEZs) has withdrawn an earlier blanket exemption on service tax. Units will now have to pay service tax and claim refunds later. This has raised concerns among the units that they would require more cash in their kitties, as previous experiences in getting refunds have meant long delays. There is already a pending notification of Clause 10AA announced by the finance ministry in the interim budget concerning revised income tax exemptions. The good news is that the policy now requires SEZ units to be exempt from paying stamp duty up to 8 per cent and will be fully exempt from paying value added tax (VAT). VAT was to be earlier refunded.

Tags: Clause 10AA, special economic zones, value added tax
Other related topics Small Business Legislation, Small Business News | 2 Comments »

The India government has revised foreign direct investment (FDI) norms in what is being seen as populist pre-election move. The revision will permit a foreign investor with a non-controlling stake in an Indian company, to also invest in minority stakes of other Indian companies which are stake holders in the target company.
The move is being met with resistance by several lobbies and is being seen as intended loophole to FDI caps. Retail and telecom are seen as the top beneficiaries of the move.

Tags: foreign direct investment (FDI)
Other related topics Small Business Legislation, Small Business News | No Comments »

All 28 public sector banks have reduced interest rates. While Indian small and medium enterprises will receive a reduction of 50 basis points, micro enterprises will receive a rate reduction totalling 100 basis points in interest.

Tags: Indian small and medium enterprises
Other related topics Interest Rates, Small Business Legislation, Small Business Loans, Small Business News | No Comments »

Officials at the Orissa State Level Bankers Committee meeting urged bankers to fulfil their MSME loan targets for this financial year, increase loan extensions under the Credit Linked Capital Subsidy Scheme and tap into micro-finance institutions to service rural markets.

In order to extend credit beyond the mining industry, the Committee also recommended that the Khadi and Village Industries Board raise lending targets set under the Pradhanmantri Employment Guarantee Programme (PMEGP).

Tags: Credit Linked Capital Subsidy Scheme, Khadi and Village Industries Board, MSME loan targets, Orissa State Level Bankers Committee, Pradhanmantri Employment Guarantee Programme (PMEGP)
Other related topics Small Business Legislation, Small Business Loans, Small Business News | No Comments »

The Reserve Bank of India (RBI) and the government of India are requiring banks to double their 2005 credit flow by 2010 to support the Indian small business sector during the economic downturn.

The mandate originated at a Officials of the State Level Bankers Committee (SLBC) meeting, held in Karnataka to discuss issues related to Small and Medium Enterprises (SMEs) during the economic downturn.

Tags: Indian small business, Reserve Bank of India (RBI), State Level Bankers Committee (SLBC)
Other related topics Small Business Legislation, Small Business Loans, Small Business News | No Comments »