Mumbai: Jet Airways pilots body, the National Aviator’s Guild, Monday appealed the State Bank of India (SBI) to release Rs 1,500 crore, which was proposed to be infused in the ailing carrier as part of a debt-restructuring plan last month.
The airline is operating just 6-7 planes, with almost its entire fleet being grounded due to non-payment of rentals to lessors amid severe paucity of cash.
“We would like to appeal SBI to release Rs 1,500 crore funds for the airline to help it continue operations. We also appeal Prime Minister Narendra Modi to save 20,000 odd jobs at the airline,” National Aviator’s Guild ( NAG) vice president Adim Valiani told reporters at the airline’s headquarter, Siroya Centre, here Monday.
Earlier, the airline’s pilots, engineers and cabin crew members assembled at the headquarters to show their solidarity.
The airline’s pilots along with engineers and senior staff were last paid for December, 2018. This apart, the airline has also defaulted on the March salary of other categories of employees as well.
Last month, an SBI-led consortium of lenders had taken management control of the airline post a debt-recast deal, following which the lenders had proposed to infuse as much as Rs 1,500 crore to the carrier to keep it afloat till the time it gets a investor.
The Monday meeting with lenders is reportedly expected to take a final decision on the quantum of funds to be infused immediately to avert a possible shut down. A meeting between the airline management and its major lender SBI last Friday could not take a decision on the fund infusion issue.
Rise in govt borrowing can weigh on corporate sector: RBI Dy Governor
Bengaluru: An increase in government borrowing runs the risk of flooding the debt market, while making it expensive for companies to borrow, according to outgoing Reserve Bank of India Deputy Governor Viral Acharya.
In a lecture shared by the RBI, Acharya said India`s borrowing relative to its output has ranged from 67% to 85% since 2000 and has outpaced many emerging markets including China.
“As more government debt floods markets, the relative safety and liquidity premium attached by investors to high-rated corporate bonds diminishes, raising the cost of borrowing especially for AAA-rated borrowers and making it relatively less sensitive to policy rate cuts,” Acharya said.
Acharya is leaving the central bank on Tuesday, six months before the scheduled end of his term in office, citing personal reasons.
The Reserve Bank of India (RBI) cut the repo rate to 5.75% on June 6, its third cut in 2019, while also changing its policy stance to “accommodative,” after data showed the economy growing at its slowest in over four years.
India should cut back on subsidies and programs that are not delivering long-term growth and divest more of its public sector holdings, Acharya said.
“The much-needed land, labour and agricultural reforms could be undertaken, all of which can help crowd-in private sector growth,” Acharya said.
There could be efficiency gains if there are more private investors playing an effective role in the governance of public sector enterprises, he added.
Aiming to attract investments, which are at its lowest level in years, Prime Minister Narendra Modi
s government has proposed giving foreign investors a bigger role in Indias insurance and aviation sectors, which have been tightly controlled for decades.
18 pc GST on flat owners paying monthly maintenance of over Rs 7,500
New Delhi: Flat owners will have to pay GST at 18 per cent if their monthly contribution to resident welfare association (RWA) exceeds Rs 7,500, the Finance Ministry said.
As per the rules, RWAs are required to collect GST on monthly subscription/contribution charged from its members if such payment is more than Rs 7,500 per flat per month and the annual turnover of RWA by way of supply of services and goods exceeds Rs 20 lakhs.
In a circular issued to field offices on how should the RWA calculate GST payable where the maintenance charges exceed Rs 7,500 per month per member, the Finance Ministry said the exemption from GST on maintenance charges charged by an RWA from residents is available only if such charges do not exceed Rs 7,500 per month per member.
“In case the charges exceed Rs 7,500 per month per member, the entire amount is taxable. For example, if the maintenance charges are Rs 9,000 per month per member, GST @18 per cent shall be payable on the entire amount of Rs 9,000 and not on (Rs 9,000-Rs 7,500) = Rs 1,500,” it said.
On how the tax liability would be calculated for a person who owns two or more flats in the housing society or residential complex, the Ministry said in such cases the ceiling of Rs 7500 per month per member shall be applied separately for each residential apartment owned by him.
“For example, if a person owns two residential apartments in a residential complex and pays Rs 15,000 per month as maintenance charges towards maintenance of each apartment to the RWA (Rs. 7500/- per month in respect of each residential apartment), the exemption from GST shall be available to each apartment,” it said.
The Ministry further clarified that RWAs are entitled to take input tax credit (ITC) of Goods and Services Tax (GST) paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input services such as repair and maintenance services.
Payments banks fall by the way on tight regulatory requirements
Mumbai: Despite digital transactions in India growing rapidly, the number of payments banks is coming down. Last week, Aditya Birla Idea Payments Bank (ABIPB), a venture between Idea Cellular and Aditya Birla Nuvo, announced closing of its operations from October 18, 2019. The payments bank that was only 18-month old said the closure was prompted by “unanticipated developments in the business landscape that have made the economic model unviable” and has asked its customers to transfer their balances before July 26.
Out of the 11 organisations that were given licences in August 2015 by the Reserve Bank of India for setting up payments banks, with the objective to promote digital payments and boost financial inclusion, four surrendered their licences early. Of the remaining seven players, a licence each was given to Vodafone and the Aditya Birla Group, which leveraged its Idea Cellular network to float a payments bank. At the time of the merger between Vodafone and Idea, the management had said it did not make sense to keep two licences, and they would eventually return one.
The number of active payments banks is now down to five—Airtel Payments Bank, Fino Payments Bank, Paytm Pay-ments Bank, India Post Payments Bank and Jio Payments Bank.
Says an analyst, “Banks themselves are offering mobile banking products and are aggressively promoting them besides there are technology companies too in this space. So why will a bank customer want to open another account with a payments bank unless the PB is offering a big value proposition?”
According to Soumya Kanti Ghosh, Group Chief Economic Advisor, State Bank of India, the future is “uncertain” for payments banks. There are many reasons for payment banks losing steam and players choosing to shut shops. “First, there is lack of proper awareness about it amongst people and whatever little awareness is there has not been able to translate people into customers. Second, tighter regulatory restrictions and third, no innovations in products and services.”
PBs are not allowed to lend, deposit acceptance is capped at Rs 1 lakh besides the capital requirement is quite steep at 15 per cent despite the business being free from credit risks. Thus, due to strict regulatory guidelines, payments banks’ business operations are restricted to only mobilise deposits and invest in government bonds, which has led to substantial losses in their operations.
The operational payments banks showed net losses of Rs 516.5 crore for FY18, while ‘Paytm’ PB has declared a profit of Rs 19 crore in FY19.