Tips to save IPO listing gains tax!
In the years 2023 and 2024, many IPOs brought huge earnings for the investors. But tax also has to be paid on this! What is the tax rule on booking listing gains from IPO? How can tax liability on listing gains be reduced? How will the tax be calculated on selling IPO shares?
The “in-principle” approval given by the Reserve Bank of India (RBI) to Centrum Financial Services Ltd (CFSL) to set up a small finance bank (SFB), paving the way for it to take over the scam-ridden Punjab and Maharashtra Co-operative (PMC) Bank with its partner BharatPe, came in as a silver lining for around 9 lakh depositors of the bank.
The move paves the way for ending nearly two anxious years for the PMC depositors whose over Rs 10,727 crore are still stuck in the crippled cooperative bank that has been under RBI administrator since September 2019.
Access to deposits
The RBI announcement seems like the light at the end of the tunnel for PMC Bank depositors. However, many have pointed out that there is no clarity as yet on when they can get their money back as the said entity has just got an “in-principle” approval they are yet to receive a banking license.
“The RBI has given us 120 days to complete the other “fit and proper conditions” to seek the final license, which I am very confident of meeting well in time. In fact, we will be seeking the final license as soon as possible,” said Jaspal Bindra, executive chairman of Centrum Group.
Once the entity secures a banking license the assets and liabilities of PMC Bank will have to be merged with the new entity. Ashneer Grover, Co-founder and Chief Executive Officer of BharatPe, told Moneycontrol in an interview that they were “hopeful (that) by the fourth quarter of this calendar year, we should have the bank up and running and everyone should be able to access the deposits and business as usual.”
The entity has set aside Rs 1,800 crore capital to be infused in the small finance bank. The allocated amount is nine times more capital over the RBI mandate of Rs 200 crore for the SFB shows the seriousness of the promoters.
So far, the RBI has had a history of fully securing the interest of depositors in such cases. When the SBI-led consortium bailed out YES Bank last year, none of the depositors suffered any loss of money.
The scam
In September 2019, RBI found that more than 73% of a total of over Rs 8,800-crore in loans made by PMC Bank had gone to just one entity, the Mumbai-based Housing Development Infrastructure Ltd and all of them had turned dud. As an inquiry was launched, it came to light that bank officials had created an elaborate scheme of fudging lending data by creating fake accounts and hiding the actual loan amounts. Looking to bring the situation under control, RBI applied restrictions on the withdrawal of money by depositors and superseded the PMC Bank board.
As of March 2020, PMC’s deposits stood at Rs 10,727.12 crore, advances at Rs 4,472.78 crore and gross NPAs at Rs 3,518.89 crore and a net loss of Rs 6,835 crore, with a negative net worth of Rs 5,850.61 crore.
A good portion of the deposits are of senior citizens and cooperative societies including an RBI officer’s association. Its share capital is Rs 292.94 crore.
(With inputs from PTI)