The Reserve Bank of India on Thursday said Rs.7,940 crore earmarked for recapitalisation of PSU banks in the current fiscal is not adequate and has asked the Finance Ministry to increase the quantum of assistance in view of mounting bad loans and to support growth.
“We have been suggesting to the Finance Ministry from time to time that the public sector banks need more capital than what budget has indicated. So, we have been raising this issue at various discussions and forums and it was also formally written by the Reserve Bank of India,” RBI Deputy Governor S S Mundra said here.
“Budgeted amount which is over Rs. 7,000 crore will not be adequate from the both perspective for enabling the bank for clean up of the books which is required and growth when it comes back, to support it,” he said.
Last fiscal, government infused Rs.6,990 crore in nine public sector banks based on their performance.
Asked about additional quantum of infusion needed beyond the budget amount, Mr. Mundra said there is no single way of calculation on the requirement and it is based on various factors.
“We have done some broad calculation for entire part of Basel-III committee implementation... What we are trying to indicate is that at this point of time because of certain stress on the book some capital would be consumed for cleaning of the books,” he said.
That cleaning is vital because when growth returns capital would be needed to support it, he said, adding that growth can be well supported with cleaner balance sheet rather than with a stress on books.
“That is the whole idea of increased capital. It can partly help to clean the balance sheet. Make the balance sheet ready to support when growth returns, additional capital will support the growth also,” he said.
Talking about setting up of a trading platform for receivables, Mr. Mundra said: “We have already invited applications and quite a few applications have been received by the RBI. They are currently under scrutiny.”
If such trading platform is set up, then it would provide cash flow to MSME against such receivables. It will help them overcome cash crunch.
“I would urge and hope that somehow if legislative process is brought in which makes mandatory for large corporates, public sector units and the government departments to compulsorily register on (receivables) trading platform so that when the small and medium units has done any supply to any of these institutions then the payment of receivables on due date becomes legal obligation,” he said.
“I believe recovery of dues is a major challenge for MSME so if it can become a legislative process or part of statute it will go a long way in supporting the sector,” he said. While NPAs are a matter of concern, they need to be dealt with, Mr. Mundra said, adding that a number of measures are being taken to contain it.
“Dealing with NPAs in a growth environment becomes easier than dealing with them in an environment which is either stagnant or decelerating,” he said.
Mr. Mundra further said that there is a need to do away with the credit guarantee scheme.
“Guarantee scheme, enhancing the limit, I would rather say credit guarantee schemes itself is something which will not run forever,” he said.
11-June-2015 17:05 IST
Finance Minister Shri Arun Jaitley to Review the Financial Performance of Public Sector Banks and Financial Institutions for the Year 2014-15
The Union Finance Minister Shri Arun Jaitley would hold the Quarterly Review Meeting of the CEOs of the Public Sector Banks (PSBs) and Financial Institutions (FIs) for the year ending 31st March, 2015 tomorrow in the national capital. The Finance Minister Shri Jaitley would broadly review the Annual Financial Performance of the PSBs during the Financial Year 2014-15. He will also review the performance of banks with regard to their performance in overall credit growth with particular reference to Agriculture Credit, MSE Credit, Education Loans, Housing Loans and NPAs. The Finance Minister will also review the progress of three social security schemes viz. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY) among others. He will also review the progress made with regard to Micro Units Development & Refinance Agency (MUDRA), expeditious disposal of public grievances and Credit Enhancement Guarantee Scheme for Scheduled Castes among others. The meeting will be attended among others by Shri Jayant Sinha, Minister of State for Finance, Dr. Hasmukh Adhia, Secretary, Department of Financial Services, Ms. Snehlata Srivastava, Additional Secretary, Department of Financial Services, CEOs of Public Sector Banks and Financial Institutions (FIs) along with other senior officers of the Ministry of Finance.
11-June-2015 14:27 IST
The Prime Minister, Shri Narendra Modi, today called for a holistic approach towards meeting the target of “Housing for All.”
Chairing a high-level meeting to assess the work done so far, both in the rural and the urban areas, the Prime Minister stressed on the need for all concerned official agencies to adopt a flexible approach, which takes into account local conditions such as building material, habits and lifestyles. “A tribal may prefer a house made from traditional local materials rather than bricks and mortar; and therefore, should be facilitated accordingly,” the Prime Minister said.
The Prime Minister said that in rural areas, the goal should be achieved “village-by-village,” so that the progress is tangible, and can be monitored effectively. He said all common facilities, and required connectivity should also be conceived and delivered, along with housing – so that we move towards the concept of “samasya-mukt gram,” (problem-free village).
For urban areas, Shri Narendra Modi suggested that urban solid waste can be used to make bricks, which would be useful as building material. He said all newly-constructed houses should take into account the required norms in disaster-prone areas.
Minister for Urban Development Shri Venkaiah Naidu, Minister for Rural Development Shri Chaudhary Birender Singh, and senior officers from the Ministries of HUPA, Rural Development, NITI Aayog and PMO were present.
PM assesses preparations towards “Housing For All”
The Prime Minister, Shri Narendra Modi, today called for a holistic approach towards meeting the target of “Housing for All.”
Chairing a high-level meeting to assess the work done so far, both in the rural and the urban areas, the Prime Minister stressed on the need for all concerned official agencies to adopt a flexible approach, which takes into account local conditions such as building material, habits and lifestyles. “A tribal may prefer a house made from traditional local materials rather than bricks and mortar; and therefore, should be facilitated accordingly,” the Prime Minister said.
The Prime Minister said that in rural areas, the goal should be achieved “village-by-village,” so that the progress is tangible, and can be monitored effectively. He said all common facilities, and required connectivity should also be conceived and delivered, along with housing – so that we move towards the concept of “samasya-mukt gram,” (problem-free village).
For urban areas, Shri Narendra Modi suggested that urban solid waste can be used to make bricks, which would be useful as building material. He said all newly-constructed houses should take into account the required norms in disaster-prone areas.
Minister for Urban Development Shri Venkaiah Naidu, Minister for Rural Development Shri Chaudhary Birender Singh, and senior officers from the Ministries of HUPA, Rural Development, NITI Aayog and PMO were present.
11-June-2015 14:40 IST
The Prime Minister, Shri Narendra Modi, today reviewed the progress of the Swachh Bharat Mission at a high-level meeting comprising top officers of the Ministries of Urban Development, Drinking Water Supply and Sanitation, NITI Aayog and PMO.
The Prime Minister was briefed on the progress towards toilet construction in all States. After comprehensively reviewing the situation, the Prime Minister directed concerned officers to specially coordinate with States which are lagging in toilet construction. Reviewing the Namaami Gange programme, he further directed that construction of toilets in habitations on the banks of the River Ganga should receive the highest priority.
Reviewing efforts at generating awareness and attitudinal change towards cleanliness, the Prime Minister said spiritual leaders should be associated with such efforts, especially during major congregational events such as the Jagannath Yatra and the Kumbh Mela. He said motivational incentives such as awards should also be instituted through official channels. In rural areas, the Prime Minister suggested quiz competitions among students to promote awareness.
The Prime Minister also called for leveraging the huge interest that Swachh Bharat has generated among the Indian diaspora.
Minister for Urban Development Shri Venkaiah Naidu, and Minister for Rural Development Shri Chaudhary Birender Singh were present.
PM reviews progress of “Swachh Bharat Mission”
The Prime Minister, Shri Narendra Modi, today reviewed the progress of the Swachh Bharat Mission at a high-level meeting comprising top officers of the Ministries of Urban Development, Drinking Water Supply and Sanitation, NITI Aayog and PMO.
The Prime Minister was briefed on the progress towards toilet construction in all States. After comprehensively reviewing the situation, the Prime Minister directed concerned officers to specially coordinate with States which are lagging in toilet construction. Reviewing the Namaami Gange programme, he further directed that construction of toilets in habitations on the banks of the River Ganga should receive the highest priority.
Reviewing efforts at generating awareness and attitudinal change towards cleanliness, the Prime Minister said spiritual leaders should be associated with such efforts, especially during major congregational events such as the Jagannath Yatra and the Kumbh Mela. He said motivational incentives such as awards should also be instituted through official channels. In rural areas, the Prime Minister suggested quiz competitions among students to promote awareness.
The Prime Minister also called for leveraging the huge interest that Swachh Bharat has generated among the Indian diaspora.
Minister for Urban Development Shri Venkaiah Naidu, and Minister for Rural Development Shri Chaudhary Birender Singh were present.
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