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Thursday, November 27, 2014

Modified DBTL scheme for LPG Gas cylinders

 The DBTL scheme was earlier launched on 1st June 2013 and finally covered 291 districts. It required the consumer to mandatorily have an Aadhaar number for availing LPG Subsidy. The government has comprehensively reviewed the scheme and after examining the difficulties faced by the consumer substantively modified the scheme prior to launch. The modified scheme is now being re-launched in 54 districts on 15.11.2014 in the 1st Phase and in the rest of the country on 1.1.2015. The modified scheme is given as under:

Options to receive LPG subsidy
Under the modified scheme, the LPG consumer can now receive subsidy in his bank account by two methods. Such a consumer will be called CTC (Cash Transfer Compliant) once he joins the scheme and is ready to receive subsidy in the bank account. The two options are:

Option I (Primary): Wherever Aadhaar number is available it will remain the medium of cash transfer. Thus, an LPG consumer who has an Aadhaar Number has to link it to the bank account number and to the LPG consumer number.

Option II (Secondary): If LPG consumer does not have an Aadhaar number, then he can directly receive subsidy in his bank account without the use of Aadhaar number. This option which has now been introduced in the modified scheme ensures that LPG subsidy is not denied to an LPG consumer on account of lack of Aadhaar number. In this option,Either consumer canPresent bank account information (bank account holder name /account number /IFSC code) to the LPG distributor for capture in LPG database OR Present LPG consumer information (17 digit LPG consumer ID) to his bank

LPG Consumers who are already CTC prior to launch on modified DBTL
Domestic LPG Consumer who had already joined the earlier DBTL scheme by linking their Aadhaar to bank and LPG database don’t need to take fresh action for receiving subsidy as the subsidy will be transferred to their bank accounts via Aadhaar based on the previous seeding. Such CTC consumers cannot exercise Option II above.

Pricing under DBTL
In the DBTL district(s), domestic LPG cylinders will be sold to CTC domestic LPG consumers at Market Determined Price (does not include subsidy) from the date of launch of the scheme.
Amount transferred to consumer 

The total cash applicable on LPG cylinder will then be transferred to the CTC consumer for each subsidized cylinder delivered (up to the cap) as per his entitlement. 

Grace Period
Non-CTC consumers will be allowed 3 months from the date of launch of DBTL to become CTC. During this period such consumers will receive their entitlement of subsidized cylinders at the then applicable subsidized retail selling price. 

Parking Period
After the grace period of 3 months, all non-CTC LPG consumers will get an additional 3 month Parking Period, during which the sale will happen at Market Determined Price for all LPG consumers..

But for non-CTC consumers the total cash on the sale made to such consumers (as per their entitlement) shall be held back with the respective OMC to be transferred to the LPG consumers’ bank account in case consumer becomes CTC anytime during the Parking Period.

In case consumer does not become CTC during this Parking Period, the parked funds will lapse and consumer shall become ineligible to receive the parked funds and sale will continue at market determined price till consumer becomes CTC.

After the expiry of the Grace Period of 3 months, and thereafter an additional Parking Period of 3 months, all non-CTC consumers will receive cylinders at marker determined price and will not be entitled to total cash until they become CTC. When non-CTC consumers become CTC beyond the parking period they will be eligible to get one time permanent advance and total cash entitlement on balance subsidized cylinders in that financial year.

Permanent Advance
A one-time Advance will be provided to every CTC consumer joining DBTL.

The Advance will be notified, from time to time and will remain fixed for a financial year.
It will remain with the consumer till the time of termination of connection, when it will be finally adjusted.

LPG consumers who were provided permanent advance on a previous scale will not be eligible for any differential payment on account of the revision in the permanent advance.

RBI make more easy to take loans for low cost home

Reserve bank of India make more easy to take home loans for low cost home as allowed banks to extend loans against long term infrastructure bonds. RBI issued a note dated 27 November 2014 regarding this issue. Full note is as under.

Please refer to our circular DBOD.BP.BC.No.25/08.12.014/2014-15 dated July 15, 2014 on the captioned subject. In continuation of the same, banks are advised as under:

2. In order to provide liquidity to retail investors in such bonds, it has been decided that banks can extend loans to individuals against long-term bonds issued by them under the provisions of the above-mentioned circular. Boards of the banks should lay down a policy in this regard prescribing suitable margins, purpose of the loan and other safeguards. Further, such loans should be subject to a ceiling, say, Rs.10 lakh per borrower, and tenure of loan should be within the maturity period of the bonds. It is also clarified that banks are not permitted to lend against such bonds issued by other banks.

3. Further, in the formula for ‘Eligible Credit (EC)’ as given in paragraph 7 of the above-mentioned circular dated July 15, 2014, ‘B’ (one of the two factors of EC) has been explained as Outstanding ‘standard’ loans to Infrastructure sector (project loans) and affordable housing on the date of issuance of the bonds. On a review, it has been decided that ‘B’ should be read as Outstanding ‘standard’ loans to the Infrastructure sector (project loans) and affordable housing on the date of reporting to RBI (reporting Fridays for reserve requirements and March 31 of a year for computing priority sector obligation). Other instructions in this regard remain unchanged.

Monday, November 24, 2014

RBI put some conditions only with banks charge minimum balance charges

Reserve bank of India put some conditions on banks with only banks can charge minimum balance penalty on non maintenance of minimum balance in saving bank account. RBI issued a direction no. 47 dated 20 November 2014 regarding this issue. Full direction is as under.

 Please refer to our circular DBOD.Dir.BC.53/13.10.00/2002-03 dated December 26, 2002 on ‘Minimum Balance in Savings Bank Accounts’ advising banks to inform customers, in a transparent manner, regarding the requirement of minimum balance in savings bank account and levy of penal charges for non-maintenance of the same at the time of opening the account.

2. In this connection, a reference is invited to paragraph 30 of Part B of First Bi-monthly Monetary Policy Statement, 2014-15 announced on April 1, 2014, regarding ‘Developmental and Regulatory Policies’ proposing certain measures towards consumer protection. One of the proposals contained therein was that banks should not take undue advantage of customer difficulty or inattention. Instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available on such accounts to those available to Basic Savings Bank Deposit Accounts and restore the services when the balances improve to the minimum required level. A reference is also invited to the recommendations of Damodaran Committee on customer service in banks which, inter-alia, recommended that ‘banks should inform the customer immediately on the balance in the account breaching minimum balance and the applicable penal charges for not maintaining the balance by SMS/Email/letter. Further, the penal charges levied should be in proportion to the shortfall observed’.

3. The policy announcement has been reviewed after extensive consultation with banks. Consequent to these deliberations and after taking into consideration the recommendation of Damodaran Committee, it has been decided that while levying charges for non-maintenance of minimum balance in savings bank account, banks shall adhere to the additional guidelines given in Annex. The guidelines come into effect from April 1, 2015.

4. These guidelines should be brought to the notice of all customers apart from being disclosed on the bank’s website.

5. In the meantime, all banks are advised to take immediate steps to update customer information so as to facilitate sending alerts through electronic modes (SMSs/emails etc) for effective implementation of the guidelines.

Yours faithfully

(Lily Vadera)
Chief General Manager


Levy of charges for non-maintenance of minimum balance in savings bank account shall be subject to the following additional guidelines:

(i) In the event of a default in maintenance of minimum balance/average minimum balance as agreed to between the bank and customer, the bank should notify the customer clearly by SMS/ email/ letter etc. that in the event of the minimum balance not being restored in the account within a month from the date of notice, penal charges will be applicable.

(ii) In case the minimum balance is not restored within a reasonable period, which shall not be less than one month from the date of notice of shortfall, penal charges may be recovered under intimation to the account holder.

(iii) The policy on penal charges to be so levied may be decided with the approval of Board of the bank.

(iv) The penal charges should be directly proportionate to the extent of shortfall observed. In other words, the charges should be a fixed percentage levied on the amount of difference between the actual balance maintained and the minimum balance as agreed upon at the time of opening of account. A suitable slab structure for recovery of charges may be finalized.

(v) It should be ensured that such penal charges are reasonable and not out of line with the average cost of providing the services.

(vi) It should be ensured that the balance in the savings account does not turn into negative balance solely on account of levy of charges for non-maintenance of minimum balance.

Banks will charge more for using ATM from December

Banks will charge more for ATM withdrawal or checking your balance at ATMs from 1 December 2014. The free limit is limited to 5 in own bank ATM and above   for a financial transaction may cost you over Rs 20 and a non-financial transaction will attract over Rs 8.5 as penalty. Several banks have already announced that they will charge customers for additional transactions.

As per the directive issued by the Reserve Bank of India (RBI) dated August 14 and then on October 10, 2014, with effect from November 1, 2014, the number of free transactions at your ATMs of your own bank has been limited to 5 in a month (as against unlimited free transactions till now). In case of other bank’s ATM, the number of free transactions have been brought down from five to three (in the six metros) while it has been kept at 5 for non-metros.

The six cities that RBI has identified as metros for the same are —Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad.

“Banks are advised that at least five free transactions (inclusive of financial and non financial transactions) per month should be permitted to the savings bank account customers for use of own bank ATMs at all locations,” said the RBI directive which has put a cap of Rs 20 (plus service tax) as charge for every additional transaction.

Several banks including State Bank of India, HDFC Bank, Axis Bank have already announced that they will be levying charges on ATM usage over and above the minimum permitted by the RBI, beginning December 1, 2014. ICICI Bank has, however, not yet announced the same.

The impact
If you live in one of the metros and visit your ATM once in two days to withdraw cash then you will exceed your monthly free withdrawal limit (including own and other bank ATM) by 7 times which means that you will have to pay a penalty of over Rs 140 in the month which comes to Rs 1,680 in a year.

Ways by which you can reduce your ATM visits
There are however some ways by which bank customers seek to bring down their ATM visits and thereby avoid paying the penalty on such transactions.

Most monetary transactions and a lot of non-financial transactions such as cheque book requests, credit card payments, checking your account balance or generating a mini statement can be done by logging into the net banking account and customers can avoid visiting ATMs for such purposes.

Some banks including HDFC Bank, ICICI Bank and Axis bank offer a missed call service for non-cash transactions where the customer can call a dedicated number from their registered mobile number following which an SMS is sent by the bank. Customers can use it for balance enquiries , checking mini-statements, cheque books and making account statement requests.

All that a customer needs to do is to store the toll free numbers of his/her bank and call on it. Customers can also go for more debit card transactions rather than cash transactions as it reduces the need for cash withdrawals.

Saturday, November 22, 2014

Excel loan EMI loan tenure and loan rate of interest calculator

Sometimes we need a three in one calculator which can calculate the loan EMI, loan tenure as well as the rate of interest on which the loan charges. This is the excel based loan EMI, loan tenure and loan rate of interest calculator which will calculate all three. The features of this calculator is as follows.

Friday, November 21, 2014

TDS statement filed for Q1 but not filed Q2 FY 2014-15-TRACES

As per the records of the Centralized Processing Cell (TDS), you have filed TDS Statements for Q1, FY 2014-15, however, no TDS Statements have been filed for Quarter 2 as of November 1, 2014.

If you are not required to submit the relevant statement, you are requested to submit a declaration by taking appropriate action as suggested under "Action to be taken" in this communication. Otherwise, your urgent attention is invited to relevant CBDT Circulars and provisions of the Income Tax Act, mandating filing of TDS Statements and Issuance of TDS Certificates downloaded from TRACES.

1. Mandatory filing of TDS Statements:

Please refer to the provisions of section 200(3) of the Income Tax Act, 1961 read with Rule 31A, which reads as follows:

Every person responsible for deduction of tax under Chapter XVII-B, shall, in accordance with the provisions of sub-section (3) of section 200, deliver, or cause to be delivered, the following quarterly statements to the Director General of Income-tax (Systems) or the person authorised by the Director General of Income-tax (Systems), namely:
Statement of deduction of tax under section 192 in Form No. 24Q;
Statement of deduction of tax under sections 193 to 196D in -
Form No. 27Q in respect of the deductee who is a non-resident not being a company or a foreign company or resident 
but not ordinarily resident; and
Form No. 26Q in respect of all other deductees.
It is, therefore, advised to file the applicable TDS Statements at the earliest to comply with the above provisions.

2. Implications of Non/ Late filing of TDS Statements:

For Deductors:

In case of late filing of TDS Statements, a fee shall be levied on the deductor u/s 234E of the Act, which reads as under:

Where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.
For Tax payers:

Non/ Late filing of TDS statements results into the TDS Credit not being available to the deductees. They, therefore, will not be able to claim the credit for tax already deducted from the payments made to them. Please note that TDS Certificates will not be available until the TDS Statements are duly filed

3. Actions to be taken:

Please file the relevant TDS Statement without any further delay.
If you are not required to file the same, please submit a declaration for Non-filing on TRACES. For this purpose, you can login to TRACES, navigate to "Statements/ Payments" menu and submit details under "Declaration for Non-Filing of Statements"
Issue TDS certificates after generating and downloading the same from TRACES. TDS Certificates downloaded only from TRACES Portal will be valid.

Thursday, November 20, 2014

Now you can deposit and withdraw money from same ATM machine

AXIS Bank announced launch of smart terminal which can be used both to deposit and withdrawal of money like ATM. This smart terminal is self service like ATM which deposit as well as withdraw cash for the customers.

Customers can use this smart terminal without debit or credit card and the money will be deposited instantly as it accepts the money. There is no cap in depositing money in an account as far as the customer shared PAN information with the bank.

The concept of depositing money as well as withdrawing from the same machine will be very useful for the customers as they needn’t to visit branch and stand in queue. This concept is very useful for Banks too as they needn’t refill the ATM machine so often because cash deposited will be used for cash withdrawal. Moreover there will be less rush at branches.

Speaking on the occasion, Rajiv Anand, Group Executive & Head- Retail Banking, Axis Bank, said, "Axis Bank has been a pioneer in launching customer-friendly technology initiatives in the banking space. The self-service terminal is another innovative product by the bank, which will help customers carry out all financial and non-financial transactions in a convenient and hassle-free manner."