NRI Remittances Keep CAD Within Limits

The Reserve Bank has discarded the fears that India's current account deficit (CAD) would contribute to global imbalances, saying it is presently 1.7 percent despite a trade deficit of close to seven percent due to remittances from Indians working abroad.

Remittances provide an in-built cushion to balance of payments and help keep the cad within sustainable limits, RBI Governor Y V Reddy said, adding in this sense, the Indian economy has not contributed to the current global imbalances.

Addressing a gathering at the bank of Japan recently, he said: "the level of foreign exchange reserves is extremely modest compared to that of Japan, our reserves exceed each - a full years imports as well as the entire external debt."

On further reforms, Reddy said deregulation in the financial sector should be in tune with progress in the real and fiscal sectors.

"As we progress further in the reform process, the main focus would be to ensure that the pace of further deregulation and liberalisation remains consistent with the progress of reform in the real and fiscal sectors," he said. Reddy emphasised the need for proper implementation of the reforms in the banking sector and said the implementation should be in tune with national and global developments".

"In practice, within the given legal framework, priorities have to be appropriately set ensuring implementation of intended reforms in banking sector in tune with the evolving domestic and external developments," he said.

NRI Deposits Fail To Pick Up Despite Rising Rupee

NRIs park their foreign currency savings in either the non-resident (external) rupee accounts (NR(E)RA) and the foreign currency non-resident (bank) accounts (FCNR(B)). Of these, the FCNR (B) deposits do not involve any exchange-related arbitrage since the accounts are denominated in foreign currency.

A rising rupee appears to have failed to catch the attention of NRIs. A stronger rupee gives them exchange-rate benefit when they convert dollars to open rupee accounts. Bankers feel that a lower rate of interest offered on such deposits seems to have taken away the sheen from such deposits, and inflows have slowed down since February. The rupee has strengthened by more than Rs 3.50 a dollar since March this year, as it now trades at Rs 40.50 against the greenback compared to Rs 44.25 in March.

In case of NR(E)RA deposits, once the foreign currency deposit is made, it gets converted into rupees. And, it again gets reconverted into dollars at the time of redemption. Consider this: An NRI had made a deposit of $100 for one year in May 2006, when the value of the dollar was Rs 45.88. This gets translated into a rupee deposit of Rs 4,588. One year down the line, even if there was a zero interest rate, the rupee funds would fetch him more dollars as Rs 4,588 at the current dollar rate of Rs 40.50 would translate into $113.28 on maturity.

Despite this advantage, there seems to be little interest in these deposits. A senior official from a private sector bank said, “Despite the rising rupee, lowering of rates has made such deposits very unattractive and we are rather seeing a slowdown. Also, interest rates have been rising in developed markets, which may seem to be more lucrative.” According to Bank of India executive director KR Kamath, NRI depositors normally take a long-term view on the rupee. “We expect a growth in such flows, but it has not yet happened,” he said.

Of late, RBI has further capped the interest rates. In April this year, RBI has capped the interest rates on the 1-3 year NR(E)RA term deposits at the London Inter-bank Offer Rate (Libor) prevailing on the last working day of the previous month.

Source: Economictimes

ICICI Bank hikes interest rates on NRI deposits

Largest private sector bank of the country ICICI Bank on Thursday revised upwards intrest rates on deposits of Non Resident Indians (NRIs).

As per the revised rates, the Non Resident External (NRE) Fixed deposits of maturity period 12 months to less than 18 months, 18 months to less than 24 months, 24 months to less than 36 months will all attract interest rate of 6.43 per cent.

For deposits of 36 months to 120 months, the new interest rates would be 6.45 per cent.

The new rates for Foreign Currency Non Resident (FCNR) deposits in US Dollars for 12 months to less than 24 months will be 5.43 per cent, for 24 months to less than 36 months will be 5.43 per cent, 36 months to less than 48 months will be 5.45 per cent, 48 months to less than 60 months will be 5.47 per cent and for 60 months it will be 5.51 per cent, a release here stated.

Source://Hindustantimes

Fund Infusion into Pune Real Estate

Real estate Pune is on a roll, with real estate mutual funds and private equity investors investing in various projects in the city. The latest investment comes from the HDFC Real Estate Fund which has purchased a 10% stake in Pune’s leading real estate firm Paranjape Schemes.
Worth Rs. 75 crore, the funds would be utilised by Paranjape for their upcoming real estate projects in Pune. The developer has an array of projects on the anvil, for which capital would also be raised from the market. Plans for an IPO are afoot. One of the projects of Paranjape, an integrated township in Pune, would be financed by GE Capital.

The deal was signed by the two partners to the project for Rs. 250 crore recently. The GE investment is exclusively for the project, without GE having any holding in the company.
Paranjape Schemes is an established real estate company in Pune and has executed 100 projects till date, including a special project for senior citizens, offering unique advantages to elders.
The company also offers exclusive services to NRIs investing in their residential projects in Pune - these include housekeeping and travel services HDFC’s real estate arm, launched in 2005 is India’s first real estate fund, and already has assets valued at Rs. 1,000 crore.

It had recently purchased stakes in Vascon Engineers, another Pune-based real estate developer. The HDFC Real Estate Fund managed by HDFC Venture Capital, which in turn has SBI holding 19.5% of its stocks, invests in various realty projects in the planning, construction and completed stage. Both commercial and residential projects are covered in its ambit.

Source://www.nrirealtynews.com

NRIs and IT Drive Property

Until a few years back the banyan city, Vadodara, hardly figured on the list of hot real-estate destinations. Land, commercial and residential property was easily available at highly affordable rates. But in recent years, the huge inflow of industrial investment from across sectors and growing interest of real estate developers, retailers and IT giants in the tier-III cities has put Vadodara on the growth trajectory. It’s difficult to find a good piece of land in the best areas at the right price in the city with a population of just over 15 lakh.

The Gujarat government is already working on a plan to develop Vadodara as a knowledge city to attract several l leading companies such as DLF, Raheja, Infosys and Satyam to invest in the city. The IT boom is also further driving the housing demand in the city. However, Vadodara still is facing tough competition from tier-II cities. “Vadodara has huge growth potential but it faces competition from Ahmedabad and other tier-II cities which are preferred investment destinations for leading IT players.

The non-resident Gujarati (NRG) investment pouring into the city is also expected to drive the real estate growth,” says Sanjay Dutt, deputy managing director of Cushman & Wakefield (India). With key cities in the state becoming more populated, the state government is also working on a twin-city development project wherein Vadodara and Anand will be developed together. Through such initiatives, the government is encouraging residential development in places around the key cities.

Land prices in Vadodara have appreciated by almost 50% in the last two-three years. The residential and commercial property prices in Vadodara too have shot up in the last two years. The cost of office spaces have increased to Rs 2500-Rs 3000 per square feet now from Rs 1500- Rs 1700 two years ago. The residential property prices have jumped to Rs 1500-2000 per square feet in key areas as against Rs 1000-2000 per square feet two years ago.

In Vadodara, investment in residential projects mainly comes from the actual buyers as the concept of second home is yet to pick up here. “The retail as well as office space demand is expected to gain momentum. Several tier-III cities in the population bracket of 60,000 to one million is on the radar of the leading retailers. However, we don’t expect oversupply of retail space in the city,” said Shubhranshu Pani, vice president, retail services of Trammell Crow Meghraj. The newly developing areas such as Sindhrot, Waghodia road, Padra road, Ajwa Road and Sevasi are emerging as promising options for investors.

The proximity of the city to Ahmedabad and Surat, the key investment hot spots and the improving civic infrastructure too are fuelling the growth. Under the Jawaharlal Nehru Urban Renewal Mission (JNURM), the ministry of urban development has already approved investment proposals of around Rs 3000 cr by the Vadodara Municipal Corporation (VMC) and Vadodara Urban Development Authority (VUDA).

“A lot of national retail and IT players are now investing in Vadodara. Also several international funds too are investing in the local real-estate firms enabling them to further expand locally,” says developer Rajiv Patel of Sun Worshipers. However, despite good purchasing power, entry of lot of retailers in the city is expected to create an oversupply, feels Dutt.

Source: Economictimes

PAN Cards for NRIs

Issued by Income Tax Office, PAN is a national identification number, given to all taxpayers of India. Holders can bring this number into use for a number of activities such as opening an account, to get a phone connection, property deals, receiving salary or professional fees.

PAN aims at preventing tax evasion by keeping a track record of monetary transactions. Moreover, it’s another advantage lies in its being national and permanent and unaffected by a change of address, even among states. A person holding PAN may take it as his/her social security number.

Following are the particulars you require to submit to get a PAN Card. It includes

• Full Name (initials must be expanded)
• Date of Birth (in case of individuals)
• Date of incorporation or company formation (in case of companies or firms etc.)
• Father's full name (in case of individuals). Married women should also give their father's full name with expanded initials.
• Mailing Address

Source: nrirealtynews.com

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NRIs can Apply for PAN Card and can track status of PAN Application as well, through NSDL website.

For Online Application for PAN Card - https://tin.tin.nsdl.com/pan/index.html (Download application form for PAN (Form 49A))

NSDL has also launched an SMS based facility to keep the applicant updated about the status of his PAN application, described

The applicant can send an SMS to 3030 with a message containing the word PAN followed by a space and the 15-digit acknowledgement number provided at the time of submission of application i.e., PAN ACKNOWLEDGEMENT NUMBER (e.g., PAN 123456789012345 – this is an illustrative acknowledgement number. Actual acknowledgement number should be provided in the SMS).

Via- tin-nsdl.com/pressrel_160107.asp

Sahara Care House Offers to 'Share' NRI Responsibilities

Sahara India Pariwar, the Lucknow, U.P.-based conglomerate that owns the commercial airline Air Sahara, announced last week that it will launch its Sahara Care House service for NRIs living in the U.S. The service will allow Indian Americans to take care of relatives and manage property in India through "relationship ambassadors," who are on call 24 hours a day.

Sahara India Pariwar founder Subrata Roy was inspired to start the service two years ago, when he was visiting the U.S. "He was talking to NRIs at dinner parties across the country, and people kept telling him to do something for them," Sahara Care House CEO Romi Datta told India-West. "He then went back, wrote up a basic document, and we did focus group studies. What we found was that all NRIs-whether they spend five days or 20 years abroad-can benefit from our services."

Source: Indiawest

NRIs Fuel Realty Boom in Nagpur

Twenty-five-year-old Manish Vinchukar has no time for himself these days. The deals are waiting to be struck, and the property dealer is on the bandwagon to make money. Nagpur’s realty market is hot with prices shooting through the roof.

Next month, Manish is set to fly to Dubai to make a presentation on Nagpur realty - and he’s sure to get a good response from the Indians working there. "They are among the preferred customers," he says. Next, he plans to land in the US to woo the Indians working there.
The realty frenzy is crossing the seven seas in Nagpur. More number of Non-Resident Indians (NRIs) are buying properties here - a trend that has fueled realty prices in the past year, say real estate agents. The developers and real estate brokers are also on the move to tap a large base of NRIs, who’ve their roots in the city or region.

Thousands of deals are struck every day, and vast stretches of agriculture and non-agriculture developed land are changing hands, say the city’s property dealers. "About 20 per cent of our clientele is from outside India," says Sanjay Kaikade, one of the directors of city-based Vastu Vihar Developers Private Limited. "Most of the NRI customers are originally from Nagpur, but others are also buying," adds Kaikade.

"Currently, the NRI investment in the city real estate is quite robust, which contributes to the price rise," says another well-known builder Mahesh Dabholkar. Many real estate brokers and agents make trips abroad to hold marketing fairs to attract the NRI investors from Middle-east, UK and even the US.

"Almost 25 per cent of our bookings are by NRIs," says Satish Bais, a managing partner in Rudra Real Estate. Bais, an old timer in the construction business, adds, "Internet is proving to be a tool in facilitating the deals. Many of us advertise on the realty-websites and get good clients from abroad, who give power of attorney to their relatives here for the registration of deeds,"

"In one of my row-houses and bungalow schemes, customers from the US went for bookings together. All of them are originally from Nagpur," says Bais.

Obviously, the stamp duty collections on registration of sale deeds in rural areas of the district have also shot up. The duty collected from Nagpur-rural area was about Rs25 crore in the 2005-06 as against Rs18.6 crore collected during 2004-05. The figures for the 2006-07 are not available yet, but rough estimates suggest a phenomenal 40 per cent rise.

Source://dnaindia

NRI Ties Up With London Firm For Mini-Townships

Foreign investment in the booming real estate sector of West Bengal gets a boost with a London-based company joining hands with an NRI entrepreneur to invest $20 million in two mini-townships here.

London-based REIT Asset Management, which plans to create $1 billion assets in India in the next three years, has tied up with Eden Realty Ventures Private Limited, led by US-based Indrajit De, to set up the projects at Bonhooghly in north and Maheshtala in south in greater Kolkata area.

"The cash investment in the two projects is $20 million besides collaterals for bank finances," Eden Realty managing director Sachchidanand Rai told media agency. "REIT India chairman David Cohen finalised three projects in India out of 140 proposals and of the three two are developed by us here," said Rai, an alumnus of IIT Kharagpur. REIT, the London-based real estate management trust, owns $6.8 billion worth assets in Europe.

The twin project in Kolkata in collaboration with Eden is their maiden venture with an Indian partner since their other project at Pune is a 100 per cent FDI. According to David Cohen, the chairman of REIT property Management India, the projects are the beginning of "a long-standing relationship with the state and the city". "We are proud to be associated with REIT," said Indrajit De, the NRI entrepreneur, from USA. Rai said of the two projects in Kolkata might be the state's highest cash investment in the form of FDI by any foreign company on real estate.

In the northern project at Bonhooghly, to be known as Bonhooghly Tenement Scheme, 18 acres of area would be developed after the same was obtained from the West Bengal government's Refugee Relief and Rehabilitation Department. "We will be giving about 800 flats free to the equal number of refugee families living there now in a deplorable state.

The flats would be much bigger than they are living now and they would also be provided open parking space for 200 cars besides community facilities like club, gym, treated water, good sewerage. "While 6 acres would be for rehabilitation with not even stamp duty fee, the remaining 12 acres would be commercially developed with 25 tall buildings offering 1476 flats. We will also beautify the lake inside," said Rai.

In the southern project at Mahestala, which is a joint venture with Mahestala Municipality, 21.22 acres of land has been acquired near Nungi station on the Kolkata outskirts to build 2240 MIG flats in 44 buildings, said Rai.

"We are also offering a full fledged football ground, a centre for sports, science and culture to be donated to the municipality. We have also proposed to build a 2.5 km road in the area besides widening a 5 km stretch of road," he said. "Our aim is to develop through innovations. We want to come forward with deep projects," said Rai.

Source: Economictimes

Rs 850-cr township comes up in Kerala

n a bid to capitalise on the NRI investments as well as the gold trade that together drive Thrissur’s local economy, Bangalore-based real estate developers Sobha Developers launched one of the largest fully integrated townships in Kerala on Saturday.

Called Sobha City, the 55-acre township is being built at an investment of Rs 850 crore. The township, covering 3 million sq ft will be built around a 6.5 acre man-made lake and will have 78% residential and 22% commercial areas.

To be completed by May 2011, the price ranges from Rs 2 crore for a villa (spread over 4,040 sq ft) to Rs 67-85 lakh for a three/four bedroom apartment (1,800-3,000 sq ft). While there will be 25 villas, the configuration of the three and four-bedroom apartments would be 423 and 216.

On why Thrissur was chosen over the commercial capital of Kerala, Kochi, for launching the project, P N C Menon, chairman, Sobha Group, said, “With 40% of Thrissur’s economy being run on NRI investments and the remaining on the gold trade, the city was a perfect bet over Kochi, where land rates would be much higher. ”

Source://FinancialExpress

NRI's not eligible for OCI certificate: Minister

Non-Resident Indians are not eligible for grant of Overseas Citizens of India (OCI) registration as they are Indian Citizens, the Minister of State for Home Sriprakash Jaiswal informed the Rajya Sabha today.

In a written reply, he said the category of persons who are eligible for OCI registration as provided in Section 7A of Citizenship Act, 1955 are the ones who are citizens of another country, but were the citizens of India at the time of, or at any time after the commencement of the Constitution.

The scheme has been made operational with effect from December 2, 2005, he said. In reply to another question, Jaiswal said there are 363 Pakistani nationals of Indian origin staying on long term visa in Kerala.

He said a total of 2,272 Pakistani nationals residing in different parts of India have been granted Indian citizenship during the last three years. However, Jaiswal said this figure does not include the number of Indian Citizenships granted to Pakistani nationals by the state of Rajasthan and Gujarat under the powers delegated to them. Source: Punjabnewsline

Land scam lands Indian American physician in jail

Police in Florida have arrested an Indian American doctor. Ketan Ashvin Patel, 37, is accused of a $100,000 land scam.

Patel, who was arrested on Tuesday, allegedly took money for a large land transaction in Washington few months ago and then diverted the money for his personal use.

The alleged victims of the doctor said they haven't recovered any of their money, media reported.

Source: Hindustantimes

ICICI opens office in Qatar

ICICI bank has inaugurated its branch in Doha, the first by an Indian bank in Qatar. India's second largest bank and the country biggest private money-lender opened its office at the Qatar Financial Centre yesterday।

The bank has a strong presence in the region। It had set up the Dubai representative office in October 2003. The bank enhanced its presence in Dubai by setting up a wealth management branch in the Dubai International Financial Centre (DIFC) in December 2005.

Operations at the Bahrain offshore banking unit commenced in October 2004 following the granting of license from the Bahrain Monetary Agency with a special permission to provide NRI banking services.

K V Kamath, Managing Director and Chief Executive Officer, told reporters that the Doha branch is the 18th outside India।

"This is a part of our focus to build up our international presence," he was quoted as saying in Peninsula newspaper।

The bank is targeting Non-Resident Indians (NRIs) and Indian businesses. The licence given by the QFC is a Category 4 one, but allows for credit facilities and investments. The bank's overseas operations now account for 18 per cent of its global balance sheet, a figure that should go up to 25 per cent over the next few years। Kamath stated Bahrain is a money-spinner for ICICI Bank as far as revenues are concerned, and accounts for 22 per cent of income from international operations। ICICI bank has US$ 4 billion to US$ 4.5 billion in assets in Bahrain.

Source: Hindu

HSBC Introduces New Banking Solution for NRIs

HSBC announced today a new banking solution for global Non-Resident Indians (NRIs)। The comprehensive solution allows the NRI community to conduct cross-border banking transactions and choose from a variety of tailored US and Indian deposit, mortgage and investment products.

In addition to helping NRIs better facilitate their banking transactions in the US and India, the solution also offers the following benefits:

Assistance in account opening with HSBC India(a) while in the US, and assistance in account opening with HSBC USA, while in India।

FastCheque - Free remittances to HSBC India from the US, at competitive exchange rates, by USD checks।

FastClick – Free remittances from the US to India through internet banking, whereby customers banking with both HSBC USA and HSBC India can remit monies to their NRI Accounts held with HSBC India, in a speedy and convenient manner।


Assistance in choosing from a wide array of HSBC USA personal and commercial products
Assistance in choosing from a variety of deposit and mortgage products offered by HSBC India.
"Today, there are 22 million Non-Resident Indians around the world who expect, and indeed demand, global banking expertise and the highest levels of service,” said Naina Lal Kidwai, Group General Manager and Country Head, HSBC India। "Between the US and India, HSBC currently serves more than 160,000 NRI customers and the new joined-up solution with HSBC USA will make this process even more seamless.”

“We believe in providing an appropriate and market leading level of service to all our customers in the US and this new offering will ensure a seamless banking experience for the NRI community,” said Kevin Newman, Group General Manager and Head, Personal Financial Services HSBC USA। “HSBC recognizes the specific needs of our global customers and this solution is designed to exceed those needs.”

सोर्स://Businesswire

ECB & NRI deposits: Half the outstanding external debt

If the Reserve Bank of India took measures in the past months to curb internal liquidity in order to check inflation, it has now taken measures to reduce the flow of external funds to strengthen its effort। In its latest annual monetary policy statement presented last Tuesday, the central bank has sought to discourage capital inflows by slashing rates on NRE and FCNR deposits.

The bank has also taken measure to reduce the existing liquidity by enhancing the prepayment limit of external commercial borrowings (ECBs)। Prepayment of ECBs up to $400 million is now allowed against $300 million earlier by authorised dealer banks without prior approval of RBI, subject to compliance with stipulated minimum average maturity period as applicable to loans.

These measures may have come at a time when the priority of the bank is to curb liquidity in order to check inflation, but what is significant is that they would play a big role in reducing the country’s external liabilities also। The outstanding external debt of the country has been rising sharply and was estimated at Rs 6,38,181 crore last September against Rs 5,48,100 crore in September 2005 — up by 16.4%. It increased by 4.7% in 2005-06 over 2004-05.

ECBs and NRI deposits are two key drivers of the growth in external debt stock in recent years and measures to curb their flow will automatically reduce the overall debt position too। The share of commercial borrowings in total outstanding external debt has been hovering around 22% in the current decade against about 14% in the mid-nineties.

Commercial bank borrowings accounted for about half of the ECB loans, while the other half was accounted for by securitised borrowings, including FCCBs। As such, the rise in the share of commercial borrowings indicates a change in the nature of India’s external debt. This also indicates a change in India’s image abroad and its growing acceptability as investment destination.

But the reality is that the sharp rise in ECBs has led to a rise in external debt too। The share of NRI and FC (B&O) deposits at the other end has risen at an even rate during this period. From less than 14% in 1999-2000 the share of NRI deposits in total outstanding external debt has increased to about 28% in 2005-06. In actual terms, NRI deposits have increased by more than two and a half times in last five years from Rs 59,137 crore in 1999-2000 to Rs 1,56,715 crore in 2005-06.

Similarly, government’s bilateral borrowings, too, have declined by 4।5 percentage points from 14.2% in 1999-2000 to 9.7% in 2005-06. And not only has the government’s share in external debt declined, but what is probably more important is that the larger part of the debt is concessional. The share of multilateral concessional debt of the government was estimated at 18.8% in 2005-06 against only 5% of non-concessional loans. The bilateral loans, at the other end, have come almost entirely under concessional terms.

सोर्स:economictimes.indiatimes.com

RBI revises priority sector lending norms for banks

Mumbai: The Reserve Bank of India (RBI) has revised the lending norms for priority sector, allowing banks to include direct finance to corporates for agriculture and allied activity of up to Rs1 crore as priority sector (PSL) exposure as against the earlier limit of Rs20 lakh.
Home loans up to Rs20 lakh (excluding loans granted to by banks to their own employees), will also now qualify to be classified under priority sector advances compared to the earlier limit of Rs15 lakh।

Besides, loans given for repairs to damaged houses of families up to Rs1 lakh in rural and semi-urban areas and up to Rs2 lakh in urban and metropolitan areas would also be included as priority sector advances, it said।

The central bank, while maintaining the overall priority sector lending limit to 40 per cent, has also increased the lending cap for educational loans to Rs10 lakh for studies in India and Rs20 lakh for studies abroad. Earlier, the limits were Rs7.5 lakh and Rs15 lakh respectively.
"Only those sectors which are employment-intensive such as agriculture, and tiny and small enterprises should be eligible for inclusion under the priority sector," the RBI said। The targets for PSL will be linked to adjusted net bank credit (ANBC) or credit equivalent amount of off-balance sheet exposures (OBE), whichever is higher, at the end of the previous financial year (March 31)। The outstanding NRI deposits (FCNR (B) and NRNR) will not be deducted for computing obligation for priority sector lending।

The existing investments by banks in non-SLR bonds in the held to maturity (HTM) category will not be considered for calculating ANBC up to March 31, 2010. However, fresh investments by banks in non-SLR bonds (held in HTM category) will be counted for determine PSL targets.
The outstanding deposits placed with NABARD/SIDBI by banks for not meeting PSL norms for agri and SME sector will be eligible for classification as indirect finance (under PSL) up to March 2010 only। Fresh deposits will not enjoy this categorisation, RBI said.

NRI deposits such as FCNR (B) and NRNR deposits balances will no longer be deducted for computation of adjusted net bank credit (ANBC) for priority sector lending purpose.
The revised norms will be effective with immediate effect, RBI said।

Any bank which has difficulty in complying with the revised guidelines may approach the central bank with appropriate reasons and time frame for compliance, it said.