New rules for banking, insurance sectors that could affect you

A look at the recent rulings that can affect you.

MARKET

The market regulator has asked mutual fund houses to provide investors the option to hold their units under open-ended schemes in electronic format in demat accounts. Fund houses will have to offer the option to hold investments in paper or electronic format for both existing and new schemes from 1 October 2011.

The Securities and Exchange Board of India has relaxed provisions for change in names by firms. Any listed company seeking a change in name to reflect its new profile can do so provided that their investment in projects associated with the new area is at least 50% of their total assets. Earlier, at least 50% of the past one year's revenue was required to be from related activities.

14% is the jump in advance tax payments made by 100 firms based in Mumbai for April-June, allaying fears of moderation in growth.

INSURANCE

Releasing the report of a committee on bancassurance (insurance products sold through banks), the Insurance Regulatory and Development Authority has proposed a joint regulatory mechanism that empowers both Irda and the central bank to supervise bancassurance products.

BANKING

Indian firms will have more flexibility in managing their overseas joint ventures (JVs) and wholly-owned subsidiaries. The central bank has allowed listed companies to write off 25% capital, loans and other receivables of their JVs and subsidiaries through the automatic route. Unlisted firms have also been allowed this write-off, but will have to seek permission. In case of JVs, the Indian promoters should own at least 51%.