A number of private deemed universities have obtained a stay on the UGC order from various High Courts
The government will move the Supreme Court to challenge stay orders of High Courts in some states on a UGC direction to all deemed universities that they should not call themselves as universities, reports PTI.
Acting on the instruction of the government, the University Grants Commission (UGC) had last year directed 130 deemed-to-be-universities not to use the word ‘university’ with their names. Rather they should write their names followed by ‘deemed-to-be-university’, the UGC had said.
A number of institutions challenged the order in various High Courts which have stayed the UGC direction.
“Various High Courts, including Madras High Court, have stayed the UGC order. The government will move the Supreme Court to seek vacation of the stay order,” an HRD ministry official said.
The deemed university status is given under Section-3 of the UGC Act to institutions of excellence. Such institutions used to call themselves ‘deemed-to-be-university’ till 2006.
However, these institutions were allowed by the UGC to remove the word ‘deemed’ from their name and identify themselves as universities in 2006. The UGC had given the permission following a recommendation by a committee comprising heads of UGC and All India Council of Technical Education (AICTE) and a former Secretary of Higher Education.
But the UGC decision was later challenged in the Delhi High Court. The petitioner claimed that the notification had created confusion with no visible difference between a university set up under an Act of Parliament or state legislature and a deemed university set up under the University Grants Commission Act, 1956.
The HRD ministry then asked the UGC to withdraw its notification of 2006. The UGC was also asked to direct the deemed universities not to use the word ‘university’ with their names.
A number of private deemed universities have challenged the UGC direction.
A number of banks are reportedly on the verge of exceeding their group exposure limit in the infrastructure segment. Bankers don’t want SPVs to be part of their group exposure limits
India plans a huge expansion in the infrastructure segment, in the coming years. With most of these new infrastructure segments being developed as special purpose vehicles (SPVs), bankers have been raising a serious concern on exceeding their respective group exposure limits. It is being suggested that SPVs for infrastructure projects be excluded from the group exposure limit.
“The present single group exposure limit prescribed is 40% and the single company exposure limit is 20% of the banks’ infrastructure funds. However, there is a flexibility of extending it to around 45%-50% in certain cases. This single-company exposure and single-group exposure is exceeding (the group exposure limit) and thus is a concern,” said Ashish Chandak, executive director, infrastructure banking, corporate finance, Yes Bank.
“On the basis of sanctions, we would be exceeding the exposure limit. The disbursement side will start reflecting (the group exposure limit) in two to three years,” added another official from a public sector bank, who did not wish to be named.
“We don’t hear much on that side (on group exposure limit) at present. By the end of this calendar year we may see such a problem,” said Virendra Mhaiskar, managing director, IRB Infrastructure.
“Typically, the group exposure limit is an issue for the infrastructure segment because in all the other sectors the expansion happens within the same company or under the same company name, with no involvement of SPVs,” said a banker from one of the leading investment banks in India, who did not wish to be named.
To deal with this group exposure limit issue, banks and infrastructure companies have been asking not to consider the SPVs formed as subsidiaries to a group company, as a part of the overall group exposure.
“Banks and infrastructure companies are saying that SPVs are set up for the purpose of delineating the project from the group’s current balance sheet. It is a separate company that is being promoted, even if things were to go bad, no corporate guarantee has been given. If it is SPV-based financing that is happening, then why is the exposure being clubbed in the group limit?” asked Mr Chandak.
“The discussion that is going on is that these special purpose vehicles should be considered as separate SPVs and not as part of the group exposure,” said the public sector banker who preferred anonymity.
However, not including the SPV in the group exposure limit may not be justified. The group company normally shows a consolidated picture—to reflect a better top-line—to impress its investors.
Though exceeding of the group exposure limit remains a concern at present, bankers are optimistic that the issue will be sorted out in the coming days. “I believe so many people have been talking of so many reforms at the moment and there are so many ideas that they are willing to consider now. Thus this should not be a problem in the future, but at this point of time—because it is considered as a part of the group exposure limit—this could create some kind of an issue. However, it will get sorted out,” added the investment banker.
Mr Chandak is also positive that availability of funds for the infrastructure sector will not be a problem, going forward. “People are coming out with ways (to sort out the issue). There are certain mechanisms with which things can be done. Like at Yes Bank, over a period of time, we have gone and raised capital and enhanced the balance sheet, so that we can increase the group exposure limit. Major banks which face the issue of exceeding the group exposure limit could sell a part of their total exposure to a certain group to smaller banks, who have not exceeded their limits.”
However, the government is also looking at ways and means to ease up funding for the infrastructure sector. The new NBFC (non-banking financial companies) norms will allow these entities to lend 25% to a single borrower in the infrastructure sector, up from the current cap of 20%. There could also be refinancing by the India Infrastructure Finance Company Ltd.
“I think the government will ensure certain steps in this direction (to ease up funds for the infrastructure sector),” Mr Mhaiskar said.
Mr Jhaveri will report to Shirish Apte, CEO, Citi Asia Pacific
Citigroup today said it has appointed Pramit Jhaveri as Citi Country Officer (CCO) for its businesses and franchise in India, reports PTI.
Mr Jhaveri succeeds Mark Robinson, who has decided to pursue an opportunity outside Citi. Based in Mumbai, Mr Jhaveri will report to Shirish Apte, CEO, Citi Asia Pacific, a company release said.
Mr Jhaveri will oversee all of Citi's businesses in India including the institutional clients group, consumer banking and global cards and wealth management businesses, the release said.
Prior to joining Citigroup, Mr Jhaveri was head of Global Banking India and vice-chairman, Asia Investment Banking, where he led Citi India's investment banking franchise and the South Asia capital markets business.
"Pramit (Jhaveri) is ideally placed to drive our efforts to continue to invest and grow in India, which remains a priority market for Citi globally," Citi's chief executive officer (Asia Pacific), Shirish Apte, said.