PSU Banks in India

In the backdrop of banking sector reforms in India, merger of few banks were announced. After this massive amalgamation, the total number of Public Sector Banks (PSBs) in India has come down from 27 banks in 2017 to 12 in 2021. But its still 10 too many to remember!. Also, for a layman. its a lot of confusion on which bank merged with which. Here is a snap shot of the Major PSU Banks as on date.

Incentives Schemes under the FTP

CA Harikrishna Puranik

Recently the GoI has extended various cut off dates for claiming incentives such as SEIS/MEIS. This may be your chance to encash such benefit, adding to your arsenal in fighting the CoVid Crisis.

Govt Of India, in order to facilitate and encourage the industry towards achieving positive Current Account Deficit, and level the playing field for Indian Exporters to compete in the global Market, announces various schemes for exporters of good and services.

Major Schemes are:

1 Duty Exemption Schemes (such as AA and DFIA)

2 Duty Remission Schemes (Currently Duty Drawback scheme)

3 Incentive schemes such as MEIS/SEIS.

Though there are lot many articles about incentive schemes, they mainly concentrate at conventional schemes such as Drawbacks (DBK) and Advance Authorisation (AA). In the current article, we will try to explain in simple terms, the concept and procedure of benefitting from SEIS Schemes.


Central government notified a scheme called Service Exports from India Scheme (“SEIS”) under Foreign Trade Policy 2015-20 (“FTP”). This scheme replaced its predecessor ‘Served From India Scheme (“SFIS”) under which the benefit was not available for foreign brand of the Indian companies. Exporters of the notified services will be awarded an incentive ranging from 3-7% of your Net Foreign Exchange Earning. These incentives are in the form of Duty Credit Scrips, which can be used for payment of import duties such as BCD. Don’t throw down the hat yet, saying we don’t have any imports, to use these duty scrips. The scrips are transferable and are usually purchased in the market at a marginal discount. So you can still pocket the remaining cash.


1.      The Services fall under the broad classification as; 

  1. Cross border trade of eligible services from one country’s to the other country.
  2. Consumption of eligible services abroad.
  3. Services rendered in the commercial presence of one country in the territory of another is not eligible.
  4. Presence of natural person of one country providing their service in the territory of another is also not eligible.

2.      Types of Services Notified in Schedule under Appendix 3D;

Sl. No.Name of the ServicePercent of incentive
Professional services
a.Legal Services7
b.Accounting, auditing and book-keeping services7
c.Taxation services7
d.Architectural services7
e.Engineering services7
f.Integrated engineering services7
gUrban planning and landscape architectural services7
hMedical and dental services7
I.Veterinary services7
jServices provided by midwives, nurses, physiotherapists, and paramedical personnel7
Research development services
a.R&D services on natural sciences7
b.R&D services on social sciences and humanities7
c.Interdisciplinary R&D services7
Rental/Leasing services without operators
a.Relating to ships7
b.Relating to aircraft7
CRelating to other transport equipment7
d.Relating to other machinery and equipment7
Other business services
a.Advertising services5
b.Market research and public opinion polling services5
c.Management consulting service5
d.Services related to management consulting5
e.Technical testing and analysis services5
f.Services incidental to agricultural, hunting and Forestry5
g.Services incidental to fishing5
h.Services incidental5
I.Services incidental to manufacturing5
J.Services incidental to energy distribution5
k.Placement and supply services of personnel5
l Investigation and security5
m.Related scientific and technical consulting Services5
n  Maintenance and repair of equipment (not 8861-8866 including maritime vessels, aircraft or other transport equipment)5
o.Building cleaning services5
PPhotographic services5
qPackaging services5
r.Printing, publishing5
s.Convention services5
Audio-visual services
a.Motion picture and video tape production and distribution service7
b.Motion picture projection service7
c.Radio and television services7
d.Radio and television transmission services7
eSound recording.7
General construction work for building7
General construction work for civil engineering7
Installation and assembly work7
Building completion and finishing work7
 Primary education services7
 Secondary education services7
 Higher education services7
 Adult education7
 Sewage services7
 Refuse disposal services7
 Sanitation and similar services7
Hospital services7
A. Hotels and Restaurants (including catering)
b.Restaurants (including catering)5
B. Travel agencies and tour operators services7
C. Tourist guides services7
8RECREATIONAL, CULTURAL AND SPORTING SERVICES (other than audio-visual services)
AEntertainment services (including theatre, live bands and circus services)7
BNews agency services7
CLibraries, archives, museums, and other cultural services7
DSporting and other recreational services7
AMaritime Transport Services
a. Passenger transportation7
b. Freight transportation7
c. Rental of vessels with crew7
d. Maintenance and repair of vessels7
e. Pushing and towing services7
f. Supporting services for maritime transport7
BB. Air transport services
a. Rental of aircraft with crew7
b. Maintenance and repair of aircraft c. Airport operations and ground handling7
CC. Road Transport Services
a. Passenger transportation
b. Freight transportation7
c. Rental of commercial vehicles with operator7
d. Maintenance and repair of road transport equipment7
e. Supporting services for road transport services7
DD. Services auxiliary to all modes of transport
a. Cargo handling services7
b. Storage and warehouse services7
c. Freight transport agency services7

3.  Exclusions:

i) Foreign exchange remittances other than those earned for rendering of notified services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible.

ii) Following Foreign Exchange remittances shall not be considered for calculation of entitlement under this scheme:

I) Related to Financial Services Sector include

a) Raising of all types of foreign currency Loans,

b) Export proceeds realization of clients,

c) Issuance of Foreign Equity through ADRs/GDRs or other similar instruments,

d) Issuance of foreign currency Bonds,

e) Sale of securities and other financial instruments,

f) Other receivables not connected with services rendered by financial institutions

II) Earned through contract/regular employment abroad (e.g. labour remittances) would include

a) Payments for services received from EEFC Account,

b) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc.,

c) Foreign exchange turnover by Educational Institutions like equity participation, donations etc.,

d) Export turnover relating to services of units operating under EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units,

e) Clubbing of turnover of services rendered by SEZ / EOU /EHTP / STPI / BTP units with turnover of DTA Service Providers

f) Exports of Goods

g) Foreign Exchange earnings for services provided by Airlines, Shipping lines service providers plying from any foreign country X to any foreign country Y routes not touching India at all

h) Service providers in Telecom Sector

4.      Other Conditions

  • Service provider must be located in India.
  • Net Free Foreign Exchange Earning during the year must be higher than $15000($10000 in case of Sole Proprietorship)
  • Must have a Valid IEC number.
  • Incase of entities engaged in both manufacturing as well as service then the net foreign exchange earned by such entity shall be considered for services only (although you can claim MEIS on the goods exported)
  • Earnings in INR is also considered as equalling FC where exports are made in INR.
  • Earning via credit card is also eligible.
  • You must posses a DSC registered with DGFT since the application should be submitted online.

Aatmanirbhar Bharat Abhiyan – Summary

As we were all eagerly waiting on how the FM will spend off Mr. Modi`s 20 Lakh Crores kitty, here is the summary of announcements.

Although todays package mostly revolved around MSMEs, It can broadly divided into 6 categories as below;

  1. MSME
  2. EPF
  3. NBFC & MFI and Discoms
  4. Contactors
  5. Real Estate
  6. Direct Tax


  • In a most welcomed move, FM announced the revision of MSME norms which were long overdue. The revised MSME criteria looks as below now:

Micro: Limit revised upward Investment  upto 1 cr. or  Turnover upto 5 cr.

Small: Limit revised upward Investment  upto 10 cr. or  Turnover upto 50 cr.

Medium: Limit revised upward Investment  upto 20 cr. or  Turnover upto 100 cr.

Note: There is no Differentiation between Manufacturing and service enterprises.

However, this still looks lesser compared to the current economic growth India had witnessed prior to Covid setback.

  • Collateral Free Automatic Loan to MSME. No guarantee required. Period 4 Years. No principal repayment for 1 year.
  • Stressed MSME: Subordinate Debt 20,000 crore
  • MSME doing viable business: 50,000 cr. equity infusion for expansion
  • Government Tenders: Global tenders will be disallowed upto 200 cr.
  • E-market linkage for MSME. Within next 45 days all payments will be made to MSME.

2. EPF

  • Government to continue to contribute PF for firms with 100 staff, earning less than Rs 15,000
  • To provide more take-home salaries and increase cash-in-hand for employers statutory PF contribution reduced from 12% to 10%. However for state PSUs, govt will continue to pay 12%, while govt staff pays 10%
  • Liquidity relief to be given for all EPF establishment
  • Govt support towards EPF contribution extended by another 3 months – June, July, August
  • Relief of Rs 2,500 crores to be provided to benefit 70.22 lakh employees

3. NBFC, MFI and Discoms

  • Rs 30,000 crore special liquidity scheme announced
  • Investment to be made in primary & secondary investments
  • The debt papers will be fully guaranteed by government of India
  • Government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs
  • Emergency liquidity injection of Rs 90,000 crore to Discoms

4. Contractors

  • All GoI agencies, such as railways, roadways, will provide 6 month extension to contractors
  • No cost extension of upto six months for govt contractors to comply with contract conditions construction work, goods and services contract, completion of work

5. Real Estate

  • Covid period should be treated as a force majeure and relax timelines
  • Registration and completion date should be extended suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications

6. Taxes

  • All pending refunds to charitable trusts, non-corporate business, LLPs and co-operatives will be processed immediately
  • Due date of all IT Return filings extended from July 31 to November 30
  • Vivaad say Vishwas scheme extended upto December 31, 2020. No extra payment sought.
  • Date of assessments getting barred as on September 30, 2020 now being extended to December 31, 2020. Those getting barred on March 31, 2021 extended by six months.
  • In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates.

Mr. Modi has pledged almost 10% of the nation`s GDP towards this package, matching that of the developed countries like Germany. However, two questions looms on the horizon, how will the govt raise funds to nurture this ambitious package, and will it be enough?? What do you think?


The financial technology (fintech) industry is thriving globally and received $17.4 billion in investment last year alone.undefined
According to EY’s Fintech Adoption Index, a third of consumers worldwide are using two or more fintech services, with 84 percent of customers saying they are aware of fintech (up 22 percent from the previous year).
But users are often unaware that the financial services applications they use count as “fintech”, or may not know what exactly fintech and its accompanying jargon means.

What is Fintech?

Financial technology is broadly defined as any technological innovation in financial services. Those engaged in the industry develop new technologies to disrupt traditional financial markets. Various start-ups have been involved in the process of creating these new technologies, but many of the world’s top banks including HSBC and Credit Suisse have been developing their own fintech ideas as well. Fintech companies utilize technology as widely available as payment apps to more complex software applications such as artificial intelligence and big data.
In this Post, let’s try to understand what impact Fintech has on our Lives. I will try to keep out the Jargons and simplify as much as possible, so that it serves as a guide rather than a white paper.

State of Fintech in 2017

I have listed below some of the hot topics in Fintech buzzing currently. I will hopefully try to cover these topics in the future posts:
 Cryptocurrency
 Bitcoins
 Block Chain
 Ethereum.
 Disruptive Innovation
 Initial Coin Offering
 Open Banking
 Financial Inclusion
It’s also now easier than ever for small businesses to accept payments. Even Small farms in the middle of nowhere can accept credit and debit cards with tools like Square and PayPal. And while there are fees, the entrepreneur doesn’t have to do a particular volume of business to qualify for an account. Anyone, anywhere can safely and easily accept credit card payments, making it easier to do business.


As per a report by pwc, 77% of the respondents expect to adapt blockchain as a part of the production system/process by 2020.

So, are you ready to adapt it?

Fintech in India

The Biggest Disruptor in India was the 2016 Demonetization

Payments and lending remain priorities in India. Fintech interest grew in
India during Q1’17, with Paytm attracting Asia’s largest funding round of
$200 million. Payments and lending drove investment during the quarter,
although interest in AI also increased. On the blockchain front, a number of banks formed consortia with fintechs to develop blockchain proof of
concepts. Interest in blockchain seems to have also increased in the
insurance space. Over the next quarter, insurtech is likely to come into its
own in India and the government is expected to release regulations for
fintech, particularly related to peer-to-peer lending, which could lead to
additional activity.

Caution with Bitcoins

As bitcoin prices skyrocket, it seems like everyone around wants to join the bandwagon, irrespective of the lack of understanding of the instrument and the risks involved. While the sharp rise in bitcoin prices may look attractive, you need to be careful while deciding to invest in them. To start with, do a thorough check while choosing the company from where you want to buy. No one wants to put money in something where they may get cheated. In the last couple of years, there have been multiple incidences of fake cryptocurrencies. Bitcoins or any other cryptocurrency in the form of
payment, check if the company has a history of making payments in this
manner and if your banker has an outlet to convert this into currency if required.

Crowd Funding

Acclaimed due to its use in Indian Film Industry, Crowd Funding is gaining importance in India

There are more than 600 crowdfunding platforms around the world, with fundraising reaching billions of dollars annually, according to the research firm Massolution.

How it works: The most common type of crowdfunding fundraising is using sites like Kickstarter and Indiegogo variety, where donations are sought in return for special rewards. That could mean free product or even a chance to be involved in designing the product or service.
It is also possible to use crowdfunding to assemble loans and royalty financing. The site LendingClub, for example, allows members to directly invest in and borrow from each other, with the claim that eliminating the banking middleman means “both sides can win” in the transactions. Royalty financing sites appear to be rarer, but the idea is to link business owners with investors who lend money for a guaranteed percentage of
revenues for whatever the business is selling. The Holy Grail is to sell company shares or ownership stakes in the company on crowdfunding sites, because it could be like a mini-IPO without the traditional hurdles.

Upside: Crowdfunding provides another strategy for startups or early stage companies ready to take it to the next level — such as rolling out a product or service. Before, a business owner was subject to the caprices of individual angel investors or bank loan officers. Now it is possible to pitch a business plan to the masses. A successful crowdfunding round not only provides your business with needed cash, but creates a base of customers
who feel as though they have a stake in the business’ success.

Downside: If you don’t have an engaging story to tell, then your crowdfunding bid could be a flop. Sites such as Kickstarter don’t collect money until a fundraising goal is reached, so that’s still a lot of wasted time that could have been spent doing other things to grow the business. It could be even worse if you meet your goal but then realize you underestimated how much money you needed. A business risks getting sued if it promises customers products or perks in return for donations, and then fails to deliver. There is also an argument to be made that angel investors and even bank officers provide more than just money. They provide entrepreneurs with needed advice. Business owners miss out on
such mentorship when they ignore traditional investors and turn to the

Tips for Successful Crowd Funding

  1. Have at least a small network of enthusiastic friends and family
    willing to help get the ball rolling by giving and urging others to give.
  2. If you’re giving out perks in return for money, make sure the perks are cool.
  3. Present a serious business plan and an explanation of why the money will take your enterprise to the next level.
  4. Demonstrate that you have your own skin in the game because of
    the personal funds you have already poured into the business.
  5. Include a video pitch and keep it short and concise, with a call to
  6. Be prepared to essentially live online, staying active on social
    media sites, until the crowdfunding campaign is complete.

Crowd Funding Models:
The well-known models of Crowd Funding
are Donation, Reward, Equity (similar to IPO
of any company) and Peer to Peer Lending
(Borrowing from other than banks and