Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT RATES :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: TDS :: empanelment :: cpt :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd
 
 
« General »
 Tax Department To Launch 2nd Phase Of Bank Accounts' Scrutiny Next Month
 How to claim tax benefit on tuition fees under Section 80C
 Online Income Tax grievance redressal facility launched at 60 offices
 Demonetisation impact on government tax revenue marginal; direct tax personal income grew at above budget estimates
 ICAI seeks more accountability, transparency in defence sector
 Will Budget help double farmers’ income?
 Verify online deposits made post demonetisation, income tax department asks taxpayers
 Union Budget 2017: Best budget is do not change anything, do no harm, implement well
 Why salaried class deserves standard deduction
 3 new taxes that Modi government could introduce, but won't
 Tax gains may showcase demonetisation windfall

Advance tax payments may add to liquidity woes
September, 05th 2013

A strong demand for money to pay the second tranche of advance tax by September 15 may put further pressure on liquidity.

Given the pain on corporate balance sheets due to the sluggish economic growth, the tax outgo may be subdued, treasury executives said. Yet demand for additional funds from corporations would exert pressure on the already tight liquidity conditions. The tax outgo is pegged just over Rs 50,000 crore.

A senior State Bank of India official said liquidity would be under strain for a few days in the run-up to tax payment date. The cost of funds will be high this time due to steps taken by the Reserve Bank of India (RBI) to keep liquidity under tight leash.

Suspecting part of liquidity was being used to speculate in the rupee-dollar market, RBI began to put curb on bank borrowing through the overnight borrowing window to stem the rupee fall.

G Chokkalingam, managing director and chief investment officer with Centrum Wealth Management, said overall liquidity in the market was under pressure. As corporations seek funds from banks for tax payments, the liquidity could tighten further. Banks would borrow from the money market to arrange for funds, pushing up short-term money market rates further.

Bank borrowings from RBI – liquidity adjustment facility (LAF) and marginal standing facility (MSF) – have been on rise. The combined borrowing by banks was Rs 90,719 crore on September 2, 2013, according to RBI data.

The overnight rates are at present ruling around (10.25 per cent), a rate at which RBI is dispensing overnight money to banks under MSF.

A treasury head with a Mumbai-based public sector bank said while corporate demand would add to pressure on liquidity, some government bonds were maturing up to September 10. This should bring in fresh funds in the system, marginally improving the supply of money. Plus, the cash management bills to the extent of Rs 45,000 crore are being redeemed in the third week.

There is expectation that under the leadership of the new governor, RBI may unwind some of the liquidity squeeze steps to ease the pressure, bankers said.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions