Report by Santanu Ganguly, New Delhi: Cabinet of India approves Rs 12,517 crores bank recapitalization plan. The Union Cabinet approved the Ministry of Finance proposal on Jan. 11, 2013 for recapitalization of Public Sector Banks as under.
(i) To provide capital funds to Public Sector Banks (PSBs) during the year 2012-13 to the tune of Rs 12,517 crores to maintain their Tier-l CRAR at comfortable level, so that they remain compliant with the stricter capital adequacy norms under BASEL-III as well as to support internationally active PSBs for their national and international banking operations undertaken through their subsidiaries and associates.
(ii) In principle` approval of the Cabinet for need based additional capital infusion in PSBs from the year 2013-14 to 2018-19 for ensuring compliance to Capital Adequacy norms under Basel- III
This will ensure compliance to the regulatory norms on capital adequacy and will cater to the credit needs of productive sectors of the economy as well as to withstand the impact of stress in the economy. This will also support national and international banking operations of PSBs and boost confidence of investors and market sentiments.
The infusion of Rs 12,517 crores in the equity capital of PSBs would enable them to expand their credit growth. This additional availability of credit will cater to the credit needs of our economy and will also benefit employment oriented sectors, especially agriculture, micro & small enterprises, export, entrepreneurs etc. in promotion of their economic activities which would, in turn, contribute substantially to the growth of the economy.
The exact amount, mode of recapitalization and other terms and conditions in each PSB would be decided in consultation with them at the time of infusion.
In the second decision the Cabinet approves 10 per cent stake sale in Engineers India Ltd. The Cabinet Committee on Economic Affairs today approved the disinvestment of 10 percent paid up equity in Engineers India Ltd. (EIL) out of its equity capital holding of 80.40 percent through a prospectus based Further Public Offering (FPO), in the domestic market as per SEBI Rules and Regulations. After this disinvestment, Government of India’s shareholding in the company would come down to 70.40 percent. The paid up equity capital of the company, as on March 31, 2012 is Rs 168.47 crores.
EIL is a listed “Mini-Ratna” Central Public Sector Enterprise under the administrative control of the Ministry of Petroleum and Natural Gas. It is one of India’s largest companies to provide design, engineering and related project management and consultancy services for the hydrocarbon sector and the process plants industry in the country.
In the third decision, the Cabinet approves increase in unit cost of Indira Awas Yojana houses. The Union Cabinet has approved the proposal of the Ministry of Rural Development for increasing the unit cost of houses under the Indira Awas Yojana, keeping in view the steep increase in cost of materials.
The approval is as follows:
(i) Enhancement of unit assistance under the Indira Awaas Yojana (IAY) from Rs 45,000 to Rs 70,000 in plain areas and from Rs 48,500 to Rs 75,000 in hilly and difficult areas.
(ii) Enhancement of unit assistance provided for homestead site to rural Below Poverty Line (BPL) households who have neither agricultural land nor a house site for purchase/acquisition of a homestead site from Rs 10,000 to Rs 20,000.
Indira Awas Yojana is a flagship scheme of the Ministry of Rural Development which aims at addressing rural housing issues by providing grant for construction/upgradation of dwelling units of BPL families especially giving priority to Scheduled Castes/Scheduled Tribes, freed bonded laborers and physically challenged persons with financial assistance.
In another very significant decision the Cabinet has decided that the National Institute of Design, Ahmedabad declared Institution of National Importance. NID can now award degrees, instead of diplomas. The Union Cabinet today approved the declaration of the National Institute of Design (NID) by Parliament by law as an `Institution of National Importance`. The status of `Institution of National Importance` would authorize NID, Ahmedabad to award degree to its students. This, in turn, may prove to be beneficial for students who wish to pursue post graduation. This will fulfill the need to professionalize, standardize and internationally benchmark professional design education in India, so as to take full advantage of opportunities opening up for the design industry, both in domestic as well as in international markets.
(i) To provide capital funds to Public Sector Banks (PSBs) during the year 2012-13 to the tune of Rs 12,517 crores to maintain their Tier-l CRAR at comfortable level, so that they remain compliant with the stricter capital adequacy norms under BASEL-III as well as to support internationally active PSBs for their national and international banking operations undertaken through their subsidiaries and associates.
(ii) In principle` approval of the Cabinet for need based additional capital infusion in PSBs from the year 2013-14 to 2018-19 for ensuring compliance to Capital Adequacy norms under Basel- III
This will ensure compliance to the regulatory norms on capital adequacy and will cater to the credit needs of productive sectors of the economy as well as to withstand the impact of stress in the economy. This will also support national and international banking operations of PSBs and boost confidence of investors and market sentiments.
The infusion of Rs 12,517 crores in the equity capital of PSBs would enable them to expand their credit growth. This additional availability of credit will cater to the credit needs of our economy and will also benefit employment oriented sectors, especially agriculture, micro & small enterprises, export, entrepreneurs etc. in promotion of their economic activities which would, in turn, contribute substantially to the growth of the economy.
The exact amount, mode of recapitalization and other terms and conditions in each PSB would be decided in consultation with them at the time of infusion.
In the second decision the Cabinet approves 10 per cent stake sale in Engineers India Ltd. The Cabinet Committee on Economic Affairs today approved the disinvestment of 10 percent paid up equity in Engineers India Ltd. (EIL) out of its equity capital holding of 80.40 percent through a prospectus based Further Public Offering (FPO), in the domestic market as per SEBI Rules and Regulations. After this disinvestment, Government of India’s shareholding in the company would come down to 70.40 percent. The paid up equity capital of the company, as on March 31, 2012 is Rs 168.47 crores.
EIL is a listed “Mini-Ratna” Central Public Sector Enterprise under the administrative control of the Ministry of Petroleum and Natural Gas. It is one of India’s largest companies to provide design, engineering and related project management and consultancy services for the hydrocarbon sector and the process plants industry in the country.
In the third decision, the Cabinet approves increase in unit cost of Indira Awas Yojana houses. The Union Cabinet has approved the proposal of the Ministry of Rural Development for increasing the unit cost of houses under the Indira Awas Yojana, keeping in view the steep increase in cost of materials.
The approval is as follows:
(i) Enhancement of unit assistance under the Indira Awaas Yojana (IAY) from Rs 45,000 to Rs 70,000 in plain areas and from Rs 48,500 to Rs 75,000 in hilly and difficult areas.
(ii) Enhancement of unit assistance provided for homestead site to rural Below Poverty Line (BPL) households who have neither agricultural land nor a house site for purchase/acquisition of a homestead site from Rs 10,000 to Rs 20,000.
Indira Awas Yojana is a flagship scheme of the Ministry of Rural Development which aims at addressing rural housing issues by providing grant for construction/upgradation of dwelling units of BPL families especially giving priority to Scheduled Castes/Scheduled Tribes, freed bonded laborers and physically challenged persons with financial assistance.
In another very significant decision the Cabinet has decided that the National Institute of Design, Ahmedabad declared Institution of National Importance. NID can now award degrees, instead of diplomas. The Union Cabinet today approved the declaration of the National Institute of Design (NID) by Parliament by law as an `Institution of National Importance`. The status of `Institution of National Importance` would authorize NID, Ahmedabad to award degree to its students. This, in turn, may prove to be beneficial for students who wish to pursue post graduation. This will fulfill the need to professionalize, standardize and internationally benchmark professional design education in India, so as to take full advantage of opportunities opening up for the design industry, both in domestic as well as in international markets.
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