Business News

Markets watchdog Sebi on Friday proposed allowing investment advisers and research analysts to use liquid mutual fund units, with a lien marked in favour of the regulatory body, to meet their deposit requirements. This would be in addition to the option to maintain the deposit with the bank. Under the Sebi rules, investment advisers (IAs) and research analysts (RAs) are required to maintain a deposit with a bank, which is marked as a lien in favour of the relevant supervisory body. The compliance with the deposit requirement is one of the conditions for the registration as IA or RA. This requirement needs to be fulfilled on a continuous basis to keep the registration in force. Currently, they are required to comply with this requirement by June 30, 2025. However, Sebi has received representations from IAs and RAs, whereby they highlighted about facing practical issues about opening fixed deposit accounts and a lien marking the same in favour of the Administration and Supervisory Body. They cited difficulties such as inconsistent procedures across bank branches, delays in issuing required documents, confusion around Sebi's lien marking rules and limited awareness among bank staff. Accordingly, in its consultation paper, Sebi has "proposed to accept lien marked liquid mutual fund units as deposit for compliance with the deposit requirement under IA Regulations and RA Regulation. Lien on such units of mutual fund shall be marked for at least one year". Sebi noted that liquid mutual funds are generally low-risk and easy to convert to cash. It suggested that these mutual fund units can be held in Statement of Account (SOA) or demat form. The value of these mutual funds, after deducting exit load and a specified haircut, will be counted toward the deposit. The value should be reviewed annually. If it falls below the required threshold or if more deposit is needed due to more clients, the IA or RA should top it up by adding more. The Securities and Exchange Board of India (Sebi) has sought public comments till May 29 on the proposal.

The RBI on Friday said it has imposed penalties on State Bank of India and Jana Small Finance Bank for certain deficiencies in compliance of norms. The Reserve Bank of India (RBI) said a penalty of Rs 1,72,80,000 has been imposed on SBI for non-compliance with certain directions on "Loans and Advances-Statutory and Other Restrictions", "Customer Protection - Limiting Liability of Customers in Unauthorised Electronic Banking Transactions", and "Opening of Current Accounts by Banks - Need for Discipline". In another statement, the central bank said a penalty of Rs 1 crore has been imposed on Jana Small Finance Bank Ltd for contravention of certain provision of of the Banking Regulation Act, 1949. In both cases, the RBI said the penalties are based on deficiencies in compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.

Consolidated net profit of Birla Corporation Limited, the flagship company of M P Birla group, increased 32.7 per cent at Rs 256.60 crore during the fourth quarter of 2024-25 as compared to Rs 193.34 crore in the corresponding previous period. The company informed the bourses after a board meeting held on Friday that consolidated total income increased 6.8 per cent at Rs 2,863.14 crore as against Rs 2,680.13 crore in the previous similar period. Primarily a cement manufacturing company, the board of Birla Corporation approved the proposal for issue of non-convertible debentures (NCDs) aggregating up to Rs 200 crore on private placement basis in one or two tranches. The board also approved capital expenditure towards increasing capacity by way of setting up a greenfield cement grinding unit with a capacity of 2.80 million tonnes per annum at Gaya in Bihar in a phased manner. The debt-equity ratio of the company at the end of March 2025 quarter decreased to 0.56 as compared to 0.67 in the previous corresponding period. Net profit margin of the company at the end of the fourth quarter of the last financial year increased to 9.27 per cent as against 7.42 per cent in the previous similar period.