Money & Banking
Budget 2015: Govt to set up autonomous banks' board bureau

The Autonomous Banks’ Board Bureau would help banks to raise capital for meeting expansion needs as well as search and select heads of PSBs

 

In order to improve governance of public sector banks (PSBs), Finance Minister Arun Jaitley on Saturday proposed setting up an autonomous banks’ board bureau to help lenders raise capital for meeting expansion needs.
 
“The bureau will search and select heads of public sector banks and help them in developing differentiated strategies of capital raising plans to innovative financial methods and instruments,” he said while presenting Budget for 2015-16 in the Lok Sabha.
 
This would be a step towards establishing a holding and investment company for banks, he said.
 
This issue was discussed extensively at the Gyan Sangam addressed by Prime Minister Narendra Modi last month.
 
During the two-day bankers’ retreat, heads of financial institutions suggested the creation of a Bank Investment Committee (BIC) and transfer of the Government’s investment in banks to BIC.
 
Creation of BIC would over time enable the Government to reduce ownership to below 51% and help banks generate capital for growth.
 
In December, the Government decided to permit public sector banks to raise up to Rs1.60 lakh crore from capital markets by diluting the Government holding to 52% in phases so as to meet Basel-III capital adequacy norms.
 
Public sector banks alone require Rs2.40 lakh crore by 2018 to meet global Basel III norms.
 

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Budget 2015: Govt to set up five new UMPPs
Jaitley said all clearances and linkages will be in place before the 4,000 MW UMP project is awarded in a transparent auction system
 
 
India will set up five more ultra mega power projects (UMPPs), each of 4000 MW entailing investments of around Rs1 lakh crore, the government said today.
 
Presenting the General Budget 2015-16 in the Lok Sabha, Union Finance Minister Arun Jaitley said all clearances and linkages will be in place before the project is awarded by a transparent auction system. This shall unlock investments to the extent of Rs1 lakh crore, he added.
 
UMPP is coal-based thermal power project that has 4,000 MW generation capacity. The minister, however, did not announce the states where these projects are proposed to be set up.
 
Under the “plug and play” system coal blocks will be auctioned after they are granted various clearances to speed up and simplify mining and get better valuation, Jaitley said.
 
One such project is likely to be set up in power starved state of Bihar. The proposed plant in Bihar may be fed from a mine either in Jharkhand or Odisha.
 
Jaitley said the Government would also consider similar plug-and-play projects in other infrastructure projects such as roads, ports, rail lines and airports. 
 
The Finance Minister also announced that the second unit of Kudankulam Nuclear Power Station will be commissioned in 2015-2016. 
 
Earlier in November, Power Minister Piyush Goyal had said that sufficient number of coal blocks will be allotted for the purpose. Power Finance Corporation (PFC) is the nodal agency for UMPPs in the country.
 
So far, four UMPPs have been awarded, of which Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) have been bagged by Reliance Power. Tata Power is operating the Mundra UMPP in Gujarat.
 

 

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Budget 2015: FMC to be merged with SEBI

The proposed merger of FMC with SEBI would help streamline the monitoring of commodity futures trading and curb wild speculations, Jaitley said 

 

In a significant move, the Union Government Saturday said commodities market watchdog Forward Markets Commission (FMC) will be merged with the market regulator Securities and Exchange Board of India (SEBI).
 
Presenting his maiden full-fledged Budget, Finance Minister Arun Jaitley said the government would merge “FMC with SEBI’’.
 
The proposed merger would help streamline the monitoring of commodity futures trading and curb wild speculations, he added.
 
To implement the merger, the Securities Contracts (Regulation) Act (SCRA) as well as the Forward Contracts (Regulation) Act (FCRA) would need amendments.
 
The Financial Sector Legislative Reforms Commission (FSLRC) had recommended that SEBI, IRDA, PFRDA and FMC should be merged into a single entity into a unified financial agency (UFA).
 
In September 2013, FMC was brought under the Finance Ministry after the emergence of a major crisis at National Spot Exchange Ltd (NSEL).
 
The move came in the wake of the Rs5,600-crore payment crisis at NSEL. Earlier, FMC was with the Consumer Affairs Ministry.
 

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