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Sensex down by over 200 points; banking, finance stocks fall




The Indian stock market traded in the negative zone on Thursday after the recent surge to record high levels.

Investors took to profit booking after the market surged to fresh highs, analysts said. Heavy selling pressure was witnessed in banking and finance stocks.

Around 10.10 am, Sensex was trading at 43,358.23, lower by 235.44 points or 0.54 per cent from its previous close of 43,593.67.

It opened at 43,291.89 and has touched an intra-day high of 43,543.96 and a low of 43,290.63 points so far.

The Nifty50 on the National Stock Exchange was trading at 12,688.85, lower by 60.30 points or 0.47 per cent from its previous close.

Manish Hathiramani, technical analyst with Deen Dayal Investments, said: “The Nifty seems to be taking a breather, which is natural and healthy for a trend to sustain. If it gets past yesterday’s high, it will resume its uptrend.”

“The overall target for the index could be in the vicinity of 13,000 and hence corrections can be fruitfully utilised to enter the markets. We have a good support at 12,000 and till that holds, we can aim for higher targets,” he said.


Cabinet nod to pact with Caribbean nation to fight offshore tax evasion




In a bid to curb offshore tax evasion, the Union Cabinet has approved an agreement between India and the Caribbean nation — Saint Vincent and The Grenadines.

Under the pact, both the countries will exchange information and assistance in respect of collection of taxes.

An official statement said this is a new agreement between the Republic of India and Saint Vincent and The Grenadines and there was no such agreement in the past between the two countries.

“Agreement mainly proposes to facilitate exchange of information between the two countries and to provide assistance to each other in collection of tax claims,” it said.

The agreement also contains tax examination abroad provisions which provide that a country may allow the representatives of the other country to enter its territory, to the extent permitted under its domestic laws, to interview individuals and examine records for tax purposes.

According to the Finance Ministry statement, the agreement will help in facilitating the exchange of information between the two countries, including sharing of information held by the banks and other financial institutions encompassing the information regarding the legal and beneficial ownership.

It will also facilitate the assistance in collection of the tax claims between the two countries.

“Thus, it will strengthen India’s commitment to fight offshore tax evasion and tax avoidance practices leading to generation of unaccounted black money,” it said.

India has been negotiating this agreement for a long time, said the ministry statement, adding that Saint Vincent and The Grenadines finally agreed to conclude this agreement with India which will promote tax cooperation between the two countries through exchange of information and assistance in collection of outstanding tax claims between the two countries.

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PSBs to get Rs 9k cr from assets of economic offenders, FM assures cases being actively pursued




State-run banks will get a total of Rs 9,041.5 crore through the sale of assets belonging to economic offenders such as Vijay Mallya, Nirav Modi and Mehul Choksi, attached or seized by the Enforcement Directorate under the provisions of PMLA.

Taking to Twitter, Union Finance Minister Nirmala Sitharaman on Wednesday said that fugitives and economic offenders will be actively pursued and dues would be recovered by attaching their properties.

“Fugitives & economic offenders will be actively pursued; their properties attached & dues recovered. #PSBs have already recovered Rs 1357 Cr by selling such shares. A total of Rs 9041.5 Cr shall be realised by banks through sale of such attached assets,” she said.

The Enforcement Directorate (ED) earlier on Wednesday handed over assets worth Rs 9,371 crore belonging to fugitive businessmen Vijay Mallya, Nirav Modi, Mehul Choksi to state-run banks to realise the losses on account of the fraud committed against them.

The ED has booked the three on the basis of the FIR filed by the Central Bureau of Investigation (CBI).

The ED statement said that it has attached or seized assets worth Rs 18,170.02 crore which included assets worth Rs 969 crore in foreign countries.

“The quantum of the attached and seized assets represents 80.45 per cent of total bank loss of Rs 22,585.83 crore,” it said, adding that the investigation by the ED has proved that a substantial part of these assets were held in the names of dummy entities, trusts, third persons, relatives of these accused.

“Today, DRT on behalf of SBI led consortium, has sold shares of United Breweries Limited for Rs 5,824.50 crore,” it said, adding that further realisation of Rs 800 crore by sale of shares is expected by June 25.

It also said that due to the cooperation and help extended by the ED, Public Sector Banks have already recovered Rs 1,357 crore by selling the shares earlier.

“Thus, the banks shall be realising total amount of Rs 9,041.5 crore through sale of a part of assets attached/seized by ED under the provisions of PMLA,” the ED said.

“As on date, out of total attached or seized assets of Rs 18,170.02 crore under provisions of PMLA, assets worth Rs 329.67 crore have been confiscated and assets worth Rs 9,041.5 crore, representing 40 per cent of total loss to the bank have been handed over to the Public Sector Banks,” it added.

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SBI may need to raise only up to Rs 9K cr in capital in FY22




Country’s largest bank State Bank of India may raise only up to Rs 9,000 crore in capital through additional tier I bonds (AT1 bonds) in current financial year (FY22) and could consider additional raising plan only next year to further enhance it’s capital adequacy profile.

Official sources said that the bank is sitting with a sound capital adequacy ratio (CAR) of 13.74 per cent and expects loan growth to touch close to 9 per cent in FY22. This would prevent the bank from raising full quanta of Rs 14,000 crore Tier-I capital raising plan that its board approved early this year.

The SBI Central Board on Monday approved plan to raise up to Rs 14,000 crore in capital through additional tier I bonds (AT1 bonds) by way of issuance of Basel lll compliant debt instrument in rupee and/or US dollar in FY 22.

Sources said that most of the capital raised by the SBI would be used to finance the maturity of AT1 and Tier-II bond coming up this year. The maturity amount works to about Rs 9,000 crore that could be financed through the capital raised by the bank this year.

An SBI executive said that permission for Rs 14,000 crore capital raising plan is an enabling provision and the actual issuance will depend on the market conditions and credit growth in the system.

Sources said that the centre has approved the capital raise plan of the bank, but it could not be verified with the officials. Concurrence of the centre is important as it is promoter of the bank with 57.63 per cent stake as of March 31, 2021.

SBI’s Common Equity Tier I (CETI) was 10.02 per cent in March 2021 higher than regulatory requirement of 7.97 per cent. Its AT-1 level was 1.42 per cent in March 2021, up from 1.23 per cent in March 2020.

With CETI higher than regulatory requirements, SBI is not hard pressed to raise capital and would approach the board and shareholders for requisite approvals as and when need arises.

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