Marking its entry into the lucrative broking space of the Indian market, HSBC , through its subsidiary HSBC Securities and Capital Markets (India) is buying out 73.21% stake in broking and investment banking firm, IL&FS Investsmart for around Rs.1000 crore at Rs.200 per share.

HSBC will acquire 43.85% stake from the largest shareholder, E*Trade, Mauritius and 29.36% from IL&FS. HSBC will also pay Rs 82 crore to IL&FS for a 3-year non-compete agreement.

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Infrastructure Development Finance Corporation (IDFC) has outbid other bidders such as Shinsei Bank, Indiabulls to emerge as winner in race to acquire Standard Chartered Mutual Fund for $205 million.

Earlier, RBI had disallowed Swiss Bank UBS to acquire Stanchart AMC. UBS at that time was paying $120 mn for the deal. Now with a local player acquiring the MF biz, getting regulatory approval would be much easier.

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In yet another step forward towards mobile banking, Reliance Communications and HDFC Bank have launched India’s first virtual credit card.

Anyone who has a HDFC Bank credit card and a Reliance mobile can use this service and as per current estimates, around 15 lakh people qualify under this. The card do away with the need for carrying a physical card but instead the mobile phone work as the payment instructor.

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To take on Zee’s Indian Cricket League, the recently formed Indian Premier League (IPL) by BCCI is on the verge of attracting big money and for the first time introducing corporate flavour to Indian sports.

IPL is scheduled to start in April 2008 and there would be eight teams representing an Indian city playing 56 matches in T20 format. The floor price for each team is set at $50 million for a 10–year franchise, though this figure could reach much higher levels.

Most of the bidders are for Mumbai team followed by Delhi and Bangalore as these teams are expected to have the best Indian and foreign players under its fold.

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1. Interest on RBI 8% Savings Bonds, 2003 though taxable was till now exempted from TDS since they are Govt. securities. Effective 1.7.2007, any interest over Rs 10,000 in a financial year from such bonds would be subject to  TDS @ 10%.

2. The threshold limit for deduction of TDS by banks and cooperative banks in respect of ‘interest other than interest on securities’ paid to the depositors has been raised from Rs.5000 to Rs.10000 w.e.f. 1.06.07. The amendment applies only where the payer is a banking company or a co-operative society engaged in carrying on the business of banking or a post office in respect of notified schemes. In other cases, the threshold limit shall be retained at Rs. 5,000. Similarly in such cases, the returns, Form 15G/15H shall be filed in accordance with the increased limit.

3. W.e.f. 1.06.07, the payment by individual/HUF having turnover exceeding the limit prescribed in Section 44AB in respect of payment to contractors shall be subject to TDS.

4. TDS shall be deducted at the following rates w.e.f. 1.04.07:

(a) Payment to Contractors @ 2.266% if surcharge is applicable, otherwise the rate will be 2.06%.

(b) Payment to Sub-Contractor @ 1.133% if surcharge is applicable, otherwise it will be 1.03%.

(c) Payment of Interest -In case of non-corporate payee @ 11.33% if surcharge is applicable and otherwise 10.30%. In case of corporate payee @ 22.66% if surcharge is applicable and otherwise 20.60%.

(d) Payment for Professional/Technical Services/Commission/ Brokerage - From 01.04.2007 to 31.05.2007 @ 5.665% if surcharge is applicable otherwise 5.15%. From 01.06.2007 onwards @ 11.33% if surcharge is applicable, otherwise 10.30%.

(e) Payment of Rent for Land and Building - If paid to an individual or HUF @ 16.995% if surcharge is applicable otherwise 15.45%. If paid to a person other than individual or HUF @ 22.66% if surcharge is applicable otherwise 20.60%.

Standard Chartered is acquiring US-based American Express Bank for $860 million in a cash deal. But the sale does not include the primary business of Amex which is credit cards and travel-related businesses. Amex is the world’s third largest credit card network after Mastercard and Visa.

Standard Chartered is the largest foreign bank in India with 81 branches and with this acquisition, it would add the much-need branch licences for 7 branches of American Express Bank. On the other hand, its competitors, HSBC and Citibank have 47 and 39 branches, respectively, giving it a sizeable network advantage.

The merged entity in India will have assets of Rs 62,896.84 crore and will boost StanChart’s presence in the private banking space. Standard Chartered has also been laying greater focus on its Indian operations as the share of Indian operations is 12.6% in the bank’s global profits. 

The deal would also help Stanchart in growing its business in India and get access to areas such as estate planning, payment processing and investment management to investors and the wealthy in India.

For American Express, it would help it in growing its chief business of credit cards and as a result is disposing off non-core businesses.

As the last date for filing returns for the Asstt.Year 2007-08 is drawing to close, a lot of issues confuse the assessees as they fill the new forms. Herein certain clarifications are provided to ease the filling process.

The new ITR forms are applicable only for the financial year 2006-07, so the old Saral forms for filing returns can only be used for the prior years.

The forms are completely annexureless and do not require attaching of TDS certificates even in case of refunds (inspite of several media reports asking for TDS certificates to be enclosed or else refund process would be delayed).

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Recently formed Tata Capital is picking up a 4.6% stake in Development Credit Bank (DCB) for about Rs.85 crore fueling speculation that this may be a beginning of Tata Sons’ interest in establishing a banking entity.

Presently, Tata Capital’s investment is financial in nature though they can derive common synergy through financial services products such as mutual funds, insurance..

The Tatas are among a group of five investors who will collectively invest around Rs 310 crore in the private sector bank.

DCB is raising Rs. 310 crore though 16.6% stake to 5 investors which would improve its capital adequacy ratio from 10.5% to 18%. DCB has been a turnaround story as it made a net profit of Rs.7.3 crore in FY07 as compared to net loss of Rs.85 crore in FY06.

Tatas are not new to banking as before nationalization, it had a stake in Central Bank of India. Currently RBI does not permit Indian companies to operate a bank but come 2009, these norms are to be relaxed, paving the way for increased banking activity.

With India having a rich tradition of respect and care for the elders, there is little need to diligently plan for the retirement. It is generally presumed that the extended family would take care of the financial responsibility for the older generation. But now with globalization (new opportunities around the world) and breaking apart of the joint family system, suddenly older Indians have become more responsible for their individual retirement security.

The main criterions to bear in mind while planning for the twilight phase of one’s life are security and stability of returns, liquidity, capital preservation and lower risks. One needs to plan for every need and contingency. Liquidity assumes great significance. With no salary or business income to fall back upon, the portfolio should be designed in such a manner that it provides a cushion for the regular expenses. Bank saving accounts give a nominal interest of 3.5% but they offer great liquidity as money can be withdrawn at any time.

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Gone are the days, when all the financial matters were left up to the husband and women took least interest in planning and investment decisions. But modern retro women are ultimate multi-taskers and are not averse in being a better half when it comes to managing money. They efficiently shoulder all the family financial responsibilities with their husband alongwith household jobs.

The best way to make money in the long term is to identify your talents and skills and put them to good use to earn the maximum. Working from home is not a limiting factor. If you are a good artist or have interest in cookery or dances, you can start the classes for the same. If you are a qualified C.A., start by writing accounts for small clients. For those good at selling skills, direct marketing for products like Amway, Modicare, Tupperware, Avon etc. is a nice option. Moreover, internet today opens a myriad opportunities right from online share trading to selling hand made items across the world through Ebay. Taking up such a career will provide with a decent regular income.

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