Financial Daily from THE HINDU group of publications
Thursday, May 18, 2006
Financial Daily from THE HINDU group of publications Thursday, May 18, 2006 |
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Financial Policy Industry & Economy - Income Tax Money & Banking - RBI & Other Central Banks RBI gets more flexibility on CRR, SLR; Bill passed Our Bureau
New Delhi , May 17 The Lok Sabha on Wednesday passed a Bill to provide more operational flexibility to the Reserve Bank of India in specifying the cash reserve ratio (CRR) and the statutory liquidity ratio (SLR). The Bill, which was passed by a voice vote, would facilitate the removal of existing ceilings or floors on the CRR and SLR. While CRR refers to the minimum amount that commercial banks must keep as cash reserves, SLR specifies the minimum amount that banks must invest in government securities. Apart from the operational flexibility on the CRR and SLR front, the Reserve Bank of India (amendment) Bill 2005 would also enable the central bank to deal with derivatives, lend or borrow securities, undertake repo or reverse repos and other instruments for checking excess or inadequate liquidity. "The amendments will arm the RBI with greater authority to monitor the financial sector," Mr P. Chidambaram, Union Finance Minister, told the Lok Sabha on Wednesday.
Taxation laws Bill
Meanwhile, the Lok Sabha also passed the Taxation Laws (amendment) Bill 2005 that seeks to amend the income-tax law to streamline the approval and monitoring process for certain charitable entities, scientific research institutions. This Bill also provides for filing of return by certain charitable entities with aggregate annual receipts below Rs 1 crore. Amendments have also been introduced in this Bill to ensure that deductions to the donor will not be denied on the ground that subsequent to the donation, approval granted to the donee entities/programmes/projects or schemes has been withdrawn by tax department.
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