RBI allows MFIs to raise $10 million through ECBs

“Considering the specific needs of the microfinance sector, the existing ECBs policy has been reviewed in consultation with the Government of India and it has been decided that MFIs may be permitted to raise ECB up to $10 million or equivalent during a financial year for permitted end-uses, under the automatic route,” RBI said in a notification

Mumbai: The Reserve Bank of India (RBI) on Monday allowed microfinance institutions (MFIs) to raise up to $10 million through external commercial borrowings (ECBs), as against the earlier limit of $5 million, a move that will widen their fund raising sources, reports PTI.

“Considering the specific needs of the microfinance sector, the existing ECBs policy has been reviewed in consultation with the Government of India and it has been decided that microfinance institutions (MFIs) may be permitted to raise ECB up to $10 million or equivalent during a financial year for permitted end-uses, under the automatic route,” RBI said in a notification.

It has also been decided that non-government organisations (NGOs) engaged in microfinance activities can avail of ECB up to $10 million or equivalent per financial year under the automatic route, up from $5 million or equivalent, RBI said.

Of late, the MFI sector has been facing liquidity crunch resulting in the RBI announcing a working group on restructuring of loans.

Last week, RBI deputy governor HR Khan had said, “all MFIs of all hues will now be permitted to take ECB of (up to) $10 million.”

“Of course, they have to be hedged. If you don’t hedge you get into difficulties,” Mr Khan had said.

As part of eligibility criteria, the MFIs registered as societies, trusts and co-operatives and engaged in microfinance should have a satisfactory borrowing relationship for at least three years with a scheduled commercial bank authorised to deal in foreign exchange.

MFIs would require a certificate of due diligence on ‘fit and proper’ status of the board of the borrowing entity from the designated authorised dealer bank.

The notification further said ECB funds should be routed through normal banking channels. NBFC-MFIs will be permitted to avail of ECBs from multilateral institutions, such as IFC, ADB, etc.

Companies registered under Section 25 of the Companies Act and engaged in microfinance will be permitted to avail of ECBs from international banks, multilateral financial institutions, export credit agencies, foreign equity holders, overseas organisations and individuals, it said.

User

Ministers “clean up” draft of Lokpal Bill changes

The law minister said the government would bring the Lokpal Bill in the current session. There may not be any need to extend it, he felt. He said the final architecture of the changed Bill would be known only after the Cabinet approves it and sends it to Parliament for consideration

New Delhi: A group of senior Indian ministers Monday “cleaned up” the draft of the changes in the Lokpal Bill, which law minister Salman Khurshid says will be introduced in Parliament during the current session, reports PTI.

After a high-level meeting of ministers chaired by home minister P Chidambaram, Mr Khurshid told reporters that “we have finished the cleaning up of the draft. We had instructions to clean up the draft and we have cleaned up the draft”.

He said the actual drafting and finishing of the drafting work is being done by officials and as soon as it is ready, the bill will go to the Cabinet once the prime minister gives the signal.

To a question, Mr Khurshid said the Cabinet was unlikely to meet tonight as the officials have to work on the draft.

“I hope it will be the last night they will have to stay awake (to work on the draft),” he said.

He said the draft changes would go to the Cabinet for approval before which prime minister Manmohan Singh and finance minister Pranab Mukherjee would have a look at it.

The law minister said the government would bring the Lokpal Bill in the current session. There may not be any need to extend it, he felt.

He said the final architecture of the changed Bill would be known only after the Cabinet approves it and sends it to Parliament for consideration.

Apart from Mr Chidambaram, Mr Khurshid and telecom minister Kapil Sibal were present in the meeting to finalise the changes. The three ministers, who are lawyers, were also part of the Joint Drafting Committee which discussed the Lokpal Bill with Team Anna members.

Minister of state for personnel V Narayansamy was also part of the ministerial meeting Monday.

User

Domestic IT market to grow by 13.4% in 2012: Report

“The business environment is expected to remain challenging, thus leading to demand uncertainty and high input costs, but the pressure on IT to perform will mount further,” Coeus Age founder and principal consultant Kapil Dev Singh said in a statement

New Delhi: The Indian IT market is expected to grow at a lower rate of 13.4% to touch a size of about Rs1,30,376 crore in 2012 compared to that in the last year, reports PTI quoting a report by IT consultancy company Coeus Age.

The domestic IT market had grown by approximately 14.5% in 2011 having a size of close to Rs1,15,000 crore, the report said.

According to the report, the context for IT consumption will remain challenging, given the overall uncertainty in the economic and political situation.

“The business environment is expected to remain challenging, thus leading to demand uncertainty and high input costs, but the pressure on IT to perform will mount further,” Coeus Age founder and principal consultant Kapil Dev Singh said in a statement.

Mr Singh added that this would result in a paradoxical pressure on IT to perform with stretched budgets.

Coeus sees most of the growth coming from consumer segment IT spending followed by government and private businesses.

“Consumer segment IT spending will grow the fastest in 2012 at 16.5%, followed by government sector at 13.9% and enterprise segment at 12.4%,” the statement said.

The report said that there are indications that IT budgets will be pruned in order to compensate for other input costs, which are rising disproportionately with business expansion.

In the enterprise segment, growth in IT spending by “very large” enterprises will be the highest at 13.8%, whereas in small and medium businesses spending on IT will only manage to notch up 9%, lower than the average enterprise segment growth rate, the report said.

Consumption of IT products and services is expected to grow in energy vertical at 19%, followed by infrastructure and construction at 16.8%, hospitals and healthcare at 16.5% and 15.6% in retail sector during 2012, the Coeus report said.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)