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Memorandum of Understanding between Insurance Regulatory and Development Authority of India and the Insurance Authority, United Arab Emirates



Memorandum of Understanding between Insurance Regulatory and Development Authority of India and the Insurance Authority, United Arab Emirates
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post facto approval for the Memorandum of Understanding (MoU) between Insurance Regulatory and Development Authority of India (IRDAI) and the Insurance Authority of United Arab Emirates. The MoU was signed in February, 2016.

The MoU provides for enhanced cooperation between the two authorities in the field of insurance supervision by providing a framework for co-operation such as channels of communication. It will also result in increasing mutual understanding through the exchange of regulatory and relevant supervisory information including confidential information to enforce or ensure compliance with their respective laws and regulations. 

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Multi-Disciplinary Team for Probing the Panama Papers Leaks
Recently, information about certain offshore entities held by various Indian persons has appeared in media. Such information is attributed to be part of ‘Panama Papers’ leaks. The International Consortium of Investigative Journalists (ICIJ), a Washington based organization which has reportedly made the revelations pertaining to the Panama Papers, has put a caveat on its website (www.icij.org) by mentioning that it should not be assumed that everyone who appears in the Panama Papers is involved in tax avoidance or evasion and there are legitimate reasons to create a company in an offshore jurisdiction and many people declare them to their tax authorities when that is required.

The Government has taken necessary measures for expeditious investigation in such cases including through enhanced international cooperation. Further course of action depends upon outcome of the investigation in respective cases.

The Special Investigation Team (SIT) on black money, already constituted by the Government under Chairmanship and Vice-Chairmanship of two former Judges of Hon’ble Supreme Court in May 2014, is looking into the above matter also. With a view to facilitate co-ordinated and speedy investigation in the aforesaid cases of Indian persons, the Government has constituted a Multi-Agency Group on 4th April 2016. The Group consists of the officers of Investigation Division of the Central Board of Direct Taxes (CBDT), Foreign Tax & Tax Research Division of CBDT, Enforcement Directorate (ED), Financial Intelligence Unit (FIU) and Reserve Bank of India, and its Convenor is Member (Investigation), CBDT.

The Multi-Agency Group has been asked to report the progress of investigation in such cases by relevant law enforcement agencies, on regular basis.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha yesterday. 

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Tax Evasion by Indian Citizens Named in Panama Papers
Recently, information about certain offshore entities held by various Indian persons has appeared in media. Such information is attributed to be part of ‘Panama Papers’ leaks. The International Consortium of Investigative Journalists (ICIJ), a Washington based organization which has reportedly made the revelations pertaining to the Panama Papers, has put a caveat on its website (www.icij.org) by mentioning that it should not be assumed that everyone who appears in the Panama Papers is involved in tax avoidance or evasion and there are legitimate reasons to create a company in an offshore jurisdiction and many people declare them to their tax authorities when that is required.

The Government has taken necessary measures for expeditious investigation in such cases including through enhanced international cooperation.

Determination of total volume of money that has been evaded by Indian persons in violation of laws/applicable regulations is subject matter of investigation and other follow-up actions, which is an on-going process. Such follow-up actions under direct taxes law include assessment of income, levy of tax, interest & penalty and filing of prosecution complaints before criminal courts, wherever applicable. Other law enforcement agencies such as Enforcement Directorate, Central Bureau of Investigation, etc. also take action in relevant cases under respective laws administered through them, depending upon facts of each case. However, details regarding the amount of money involved in all such cases are not maintained centrally.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha yesterday. 

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Constitution of SIT on Panama Papers Leaks
The Government has constituted a Multi-Agency Group on 4th April 2016, inter alia, for facilitating co-ordinated and speedy investigation in the cases of Indian persons allegedly having undisclosed foreign assets and whose names are reportedly included in Panama Papers leaks. The Group consist of the officers of Investigation Division of the Central Board of Direct Taxes (CBDT), Foreign Tax & Tax Research Division of CBDT, Enforcement Directorate (ED), Financial Intelligence Unit (FIU) and Reserve Bank of India, and its Convenor is Member (Investigation), CBDT. It has been asked to report the progress in such cases on regular basis.

The investigation team has been ordered to conduct a time bound inquiry into the allegations alleged in the Panama Papers leaks.

The Government has taken necessary measures for expeditious investigation in such cases including through enhanced international cooperation.

Investigation in such cases is at preliminary stage. Besides, the International Consortium of Investigative Journalists (ICIJ), a Washington based organization which has reportedly made revelations pertaining to the Panama Papers leaks, has put a caveat on its website (www.icij.org) by mentioning that it should not be assumed that everyone who appears in the Panama Papers is involved in tax avoidance or evasion and there are legitimate reasons to create a company in an offshore jurisdiction and many people declare them to their tax authorities when that is required. In view of the above, further course of action depends upon outcome of the investigation.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha yesterday. 

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The Measures taken by the Government to Curb Black Money in the Country
The Government has taken several measures to effectively deal with the issue of black money, particularly black money stashed away abroad. Such measures include policy-level initiatives, more effective enforcement action on the ground, putting in place robust legislative and administrative frameworks, systems and processes with due focus on capacity building and integration of information and its mining through increasing use of information technology.

Recent major initiatives of the Government in this regard include – (i) Constitution of the Special Investigation Team (SIT) on Black Money under Chairmanship and Vice-Chairmanship of two former Judges of Hon’ble Supreme Court, (ii) Enactment of a comprehensive new law - The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 which has come into force w.e.f. 01.07.2015 to specifically and more effectively deal with the issue of black money stashed away abroad, (iii) Introduction of the Benami Transactions (Prohibition) Amendment Bill, 2015 to amend the Benami Transactions (Prohibition) Act, 1988 with a view to, inter alia, enable confiscation of Benami property and provide for prosecution, (iv) Proactively engaging with foreign governments with a view to facilitate and enhance the exchange of information under Double Taxation Avoidance Agreements (DTAAs)/Tax Information Exchange Agreements (TIEAs)/Multilateral Conventions, (v) According high priority to the cases involving black money stashed away abroad for investigation and other follow-up actions including prosecutions in appropriate cases, (vi) While focusing upon non-intrusive measures, due emphasis on enforcement measures in high impact cases with a view to prosecute the offenders at the earliest for credible deterrence against tax evasion/black money, (vii) Proactively furthering global efforts to combat tax evasion/black money, inter alia, by joining the Multilateral Competent Authority Agreement in respect of Automatic Exchange of Information and having information sharing arrangement with USA under its Foreign Account Tax Compliance Act (FATCA), (viii) Constitution of a Multi-Agency Group under the Convenorship of Member(Investigation), Central Board of Direct Taxes on 4th April 2016, inter alia, for facilitating coordinated and speedy investigation in the cases of Indian persons allegedly having undisclosed foreign assets and whose names are included in Panama Papers leaks.

Whenever the cases involving remittance of black money abroad or illegal remittance of money abroad are detected, appropriate action is taken by relevant law enforcement agencies such as Income Tax Department, Enforcement Directorate (ED), Central Bureau of Investigation (CBI) etc. Such action includes action against banks and financial institutions if their involvement is found. However, data regarding all such cases and the amount of money sent abroad in each such case is not maintained centrally.

There is no official estimation of the amount of black money present in the country and taken outside the country. However, the Government had commissioned a study, inter alia, on estimation of unaccounted income and wealth inside and outside the country, through National Institute of Public Finance and Policy (NIPFP), National Council of Applied Economic Research (NCAER) and National Institute of Financial Management (NIFM). Reports received from these Institutes are under examination of the Government.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha yesterday. 

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Recommendations of Kelkar committee on Public Private Partnership
The Government has reviewed the recommendations of the Kelkar Committee on Public Private Partnerships. The Committee Report in the public domain at http://finmin.nic.in/reports/ReportRevisitingRevitalisingPPPModel.pdf included recommendations for action by Central and State Governments, financial institutions, private sector (industry and consultancy services) etc. Further, some of the action recommended entails ongoing steps.

The recommendations to set up the 3P-India is under consideration. Funds earmarked in the 2014-15 Budget for 3P India could not be utilized as the proposed entity was not established during that financial year.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha yesterday. 

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FM: Government has taken various measures to deal with the issue of Non Performing Assets (NPAs) in Banking Sector
The Union Finance Minister, Shri Arun Jaitley said that the Government has taken various measures to deal with the issue of Non Performing Assets (NPAs) in Banking Sector especially in case of Public Sector Banks (PSBs). The Finance Minister said that there are two categories of defaulters, viz. those who are unable to pay back due to economic slowdown both in domestic and global market and other reasons outside their control as well as wilful defaulters including loans sanctioned without due diligence by the banks. The Finance Minister said that the Government has taken various measures to deal with both these categories of defaulters. The Finance Minister Shri Jaitley was making his Opening Remarks at the Second Meeting of the Consultative Committee attached to the Ministry of Finance on the subject: “NPAs in Banking Sector” here today.

The Finance Minister Shri Jaitley further said that in order to deal with default due to economic slowdown, the Government has taken various measures to revive the stressed sectors which mainly include steel, textiles, power and roads among others. Shri Jaitley said that the Government has also done recapitalization of banks by providing Rs. 25,000 crore in the last year Union Budget 2015-16 as well as in this year’s budget 2016-17. He said that transparency and professionalism has been brought in appointment process for top management positions in the PSBs including Chairmen and Managing Directors. He said the Government has taken various measures to make the management professional, has given full autonomy to the banks in taking commercial decisions without any interference from the Government..

The Finance Minister Shri Jaitley said that Bankruptcy Law has been cleared by the Joint Parliament Standing Committee and is likely to be discussed in the current Budget Session of the Parliament. The Finance Minister also said that SARFAESI Act and DRT Act have been amended to make the recovery process more efficient and expedient. The Finance minister said that wherever it was observed that number of cases in which action taken by the banks against guarantors for recovery of defaulted loans is insufficient, the Government has advised the banks to take action against guarantors in the event of default by borrowers under relevant Sections of SARFAESI Act, Indian Contract Act and RDDB & FI Act. The Finance Minister said that a direction to this effect has been issued to the banks last month. The Finance Minister also highlighted the various measures taken by the Government for revival of stressed sectors such as steel, road, power and textile sectors among others.

Later the Members of the Consultative Committee gave their suggestions with regard to recovery of loans and bringing NPAs under control. Members suggested that there is need for bringing more transparency in the system and list of all the defaulters whose loans have been written off by the PSBs be made public. They asked for exemplary action against the wilful defaulters so that others do not indulge in similar activities. Some members appreciated the Government’s effort to make the appointment process for the top management positions of banks professional. Some members also suggested that there is need for restructuring of agricultural loans in order to help the farmers. Members also suggested that there should be no employment cut due to any amalgamation or merger of banks. Members asked the Government to ensure level playing field to all Indian entrepreneurs across the board. They suggested that due to wilful default by some prominent business men, others may not be considered and treated in a similar fashion. Some members suggested that a committee be constituted to finalise recovery process in case of loans given to big corporate houses by various PSBs.

The Members of the Consultative Committee who participated in the aforesaid Meeting include Shri Anirudhan Sampath, Shri Baijayanta Jai Panda, Shri Dilip Kumar Mansukhlal Gandhi, Shri Kailkesh Narayan Singh Deo, Smt. Poonam Mahajan, Shri PrabhatsinhPratapsinh Chauhan, Shri Ram Charitra Nishad, Shri Sriram Malyadri, Shri Subhash Chandra Baheria, Smt. Supriya Sadanand Sule, Shri Suresh Chanabassappa Angadi (all members of Lok Sabha); Shri Anil Desai, Shri Digvijaya Singh, Dr. K.P. Ramalingam, Shri Rajkumar Dhoot, Shri Ranvijay Singh Judev, Shri Satish Chandra Misra, Kumari Selja and Shri Sukhendu Sekhar Roy (all members of Rajya Sabha).

Along with the Finance Minister, the Minister of State for Finance Shri Jayant Sinha, Shri Ratan P. Watal, Finance Secretary, Shri Shaktikanta Das, Secretary, DEA, Dr. Hasmukh Adhia, Revenue Secretary, Ms. Anjuly Chib Dugal, Secretary, Financial Services, Shri Neeraj Kumar Gupta, Secretary, DIPAM, Dr. Arvind Subramanian, Chief Economic Adviser (CEA), and other senior officers of the Ministry of Finance attended the aforesaid Consultative Committee Meeting.  

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