Aadhaar­less bank a/cs to be invalid by year end

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NEWDELHI: Bank accounts that are not linked to Aadhaar will be frozen and no new accounts can be opened without the 12-digit biometric identity number after December 31, according to new government rules.

Aadhaar cards along with Permanent Account Numbers (PAN) or Form 60 for those outside the tax net will also be mandatory from now on for transactions above ~50,000. Those who don’t have the documents will have to prove they have applied for them.

The latest regulations, issued by the revenue department on June 1, come as amendments to rules related to the anti-money laundering law that the government is seeking to tighten to fight black money and terror funding.

Frozen accounts can be reactivated by linking to Aadhaar details. “The money will be safe but the accounts will not be operational. Once the account holder shows the required documents they will be unfrozen,” a finance ministry official said.

The new rules apply to individual account holders and the authorised signatories where accounts are in the name of companies and partnerships firms.

Some 65% of India’s estimated 70 crore savings accounts are Aadhaar-linked. Similar official data for current and other kinds of accounts wasn’t immediately available. The government issued one billion Aadhaar cards till April 2016, the latest year for which data is available.

The government has also moved to watch more closely small accounts with deposits under ~50,000.

 

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Centre will not fund farm loan waivers, says Jaitley

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NEWDELHI: Union finance minister Arun Jaitley hinted on Monday that the central government will not help with money for farm loan waivers, underscoring a major economic challenge for Maharashtra, which promised to write off loans equal to nearly 80% of its fiscal deficit, and for at least four other states facing similar demands.

Maharashtra, Madhya Pradesh, Haryana, Rajasthan and Punjab have witnessed growing resentment in the agriculture sector where stagnant incomes have left millions with piling debt. The crisis has triggered violent protests recently, with a debt write-off a central demand in all the regions.

Protests in Madhya Pradesh left five people dead last week and cultivators in Maharashtra held a more than a week-long agitation that ended on Sunday only after the government agreed to waive off loans for 1.34 crore farmers.

There have also been rumblings in Haryana, Rajasthan and Punjab, weeks after Uttar Pradesh’s new government wrote off ₹35,500 crore in loans to small farmers.

“States which want to go for these kind of schemes, will have to generate them from their own resources. Beyond that as the central government, I have nothing to say,” Jaitley said.

An HT analysis shows that if the governments agree to waive off loans, most states will almost double their fiscal deficit and be left with practically no money for welfare projects (see box).

“The waiver will translate into a cut in development spending by 30%”, said a Maharashtra finance department official.

Officials in UP say the loan waiver has led to pruning of allocations of all departments as the Centre was not willing to share the burden.

In almost all major agrarian states, the loans of small farmers are close to 80% of the fiscal deficit last year.

The last big farm debt waiver came in 2009, when the UPA government waived ₹72,000 crore before the general election.

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RBI keeps REPO RATES same; Eases Home Loan provision

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The Reserve Bank of India has made it possible for banks to lend more to Home buyers, and at lower rates, in a move that should benefit customers as well as real estate developers. The  central bank did this by reducing the amount of money banks have to set aside (as security)  on home loans. The reduction also means lower home loan rates. Previously, the banks had to set aside 0.4% or Rs. 400 per lakh . This has now been reduced to 0.25%, or  Rs. 250 per lakh.

 

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SBI CUTS TERM DEPOSIT RATES BY UP TO 50 BPS

Mumbai: State Bank of India(SBI) has cut its term deposit rates by up to 50 basis points for various maturities. The rates have been revised for medium and long term deposits and for amount below rs. 1 crore . For two to less than three years deposits, SBI will offer 6.25%, compared to 6.75% earlier, for a similar maturity period, the deposit rates for senior citizens have been cut to 6.75% from 7.25%. For deposits maturing between three years and ten years, the rates have been lowered by 25 basis points to 6.50%. The lender will be offering the new rates for fresh deposits and renewals and are applicable from April 29,2017. The bank is offering 6.90% for one year to 455 days term deposits.

 

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