Money & Banking
SBI Chief proposes alternative fund raising to meet Basel-III norms

Following Wednesday's Cabinet decision to stop endlessly funding PSBs, SBI's Arundhati Bhattacharya spoke about this opportunity for wider reform


SBI chairman Arundhati Bhattacharya said that the government's decision to stop funding public sector banks (PSBs) will lead to competition and reforms in the sector which has been dogged by long-standing NPAs.


She proposed that banks could look to raise funds by issuing shares with differential voting rights, so that banks could raise capital enough to meet Basel-III capital adequacy norms.


“The writing on the wall is very clear...they (PSBs) have to think of differential voting rights. It is time to lay out some kind of roadmap on how much the banks need to do and how much support it would get,” she said.


“The big daddy back there is not going to be around to give them capital as and when they need. If they need to be competitive and want to grow, then they definitely need to look at other places for more capital,” she added.


With the government deciding that it will start diluting its stake to bring it down to 52%, the PSBs will be able to raise around Rs1.60 lakh crore. "The news that the government has allowed PSBs to bring down government stake to 52% kicks off the next round of reforms... because for the first time clear signal has been given (to PSBs) to source capital from the market.”


The SBI chairman also stressed that the Indian banking space needs consolidation and that this should ideally result in 3 to 4 major banks. "It is extremely important for India to have 3-4 major banks. ... We should allow the banks to come together and talk among themselves. In the past also we have seen government has forced some is very important for the banks to determine who should be their correct partners," she said.


The Basel-III norms are slated to come into effect on 31 March 2019. Indian banks would need to meet capital adequacy norms to improve risk management and governance by the deadline.


Insurance Bill gets cabinet nod

After select committees recommendations and support from the Congress, the bill is expected to be passed in the Rajya Sabha, where the NDA is in a minority


FDI in insurance is set to go up to 49% from the current 26%, after the Cabinet approved amendments to the Insurance Bill. The Bill is expected to be tabled in Rajya Sabha today.


This reform has long been in the works and with the Congress expressing support for the Bill, it is expected to be passed in the Rajya Sabha.


The Cabinet nod came after the Rajya Sabha Select Committee made recommendations regarding the amendments in the Insurance FDI law. The Committee recommended that the cap on total foreign holding in equity be raised from 26% to 49%, this cap would include all forms of foreign investment in the company.


These new norms will also help companies conform to promoter holding norms on stock exchanges by diluting stake to foreign investors. This would enable them to list on exchanges and raise capital. Additionally, the report of the Committee addressed the concerns that the higher FDI would result in the insurance companies giving over control to foreign entities.


“The term ‘control’ shall include the right to appoint majority of the directors or to control the management or policy decisions, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements,” the report said.


Public Interest Exclusive
152 out of 172 'Adarsh' type constructions in Maharashtra, are in Pune

RTI reveals that violating environmental norms in Pune has gone through the roof and is likely to land buyers in trouble.


As per the Section 4 of the RTI Act, the environment clearance department and the Maharashtra Pollution Control Board are duty bound to put up information on environmental violations in construction of townships and any other housing projects.


However, although they have technically uploaded them, they are not in a “searchable mode” and hence, it is an onerous task for any citizen to access the information easily.

Pune-based RTI activist Vijay Kumbhar, has made the task easier for people. Minutes of the Meetings of the State Level Appraisal Committee (SEAC) and State Environmental Impact Assessment Authority (SEIAA) are uploaded on the website. SEAC & SEIAA in Maharashtra are constituted by Central Government to regulate projects in various categories – in this case, Kumbhar considered only those construction projects, which are of 2 lakh square feet to 15 lakh sq ft, which largely and directly affect common citizens and for which state environmental clearance is mandatory. Kumbhar downloaded more than 2,000 pages of innumerable minutes of meetings held by SEAC and SEIAA and have exposed some startling statistics and names of guilty builders and companies.

It may be noted that after SEAC zeroes in on any construction project that has violated environmental norms, it sends the name to SEIAA to recommend further action as needed. MPCB is responsible for directing the relevant municipal authority to demolish buildings that have violated environmental norms.

152 real estate projects in and around Pune have violated environmental norms. More shockingly, criminal cases have been files against them and in some cases, environment clearances for their projects rejected, yet construction and sale is in full swing. Kumbhar said, “there are eight real estate projects in and around Pune for which the State Level Expert Appraisal Committee (SEAC) has recommended rejection of environment clearance and yet the projects continue in their construction and sale to innocent buyers.”

In Maharashtra, barring Mumbai and Navi Mumbai, a shocking 152 out of 172 environment norm violations are in Pune and its surrounding areas. It may be noted that Pune is the leading urban agglomeration, with maximum construction activity, compared to any other city in India. Kumbhar says that, “it may be recalled that notice for demolition of `Adarsh’ was for violation of the Environment Protection Act. While influential residents of that controversial high-rise have ensured it has not been demolished, the same may not be the case with all these 172 building schemes and may ultimately land the flat purchaser in trouble.”

Since many years now, Pune has become a hub of illegal real estate activities. Be it proposed non-agricultural plots (so called N.A Plots), proposed townships, bungalow plots or plantation schemes with so called ownerships. Now it has come to light that many residential and commercial projects are under construction without obtaining necessary environment clearances. Kumbhar alleges that, “Since big politicians and babus are indirectly involved in this racket, no proponent of such projects is scared of any law in India. Interestingly, you will find the spouse of almost every corrupt politician or babu in real estate business.”

As per the Section 15 of the Environment Protection Act, stringent punishment under the law includes imprisonment, which may be extended to five years but a paltry penalty of a few lakh rupees, which is measly compared to the cost of the project. Hence, it is the buyers who end up at the receiving end. “In eight such residential projects, people have already started living in their newly bought house. Until now no real estate developer has been punished for having flouted environmental norms,” Kumbhar said.




nagesh jagallo

5 months ago

Mr. You are talking of violation cases at the meeting, but there are many cases where the builder has got clearances on "Subject to" basis, which is never attended. The drawings and undertaking on stamp about short comings are not honored once the file is approved . SEAC committee does some visits but still no one is bothered, even most of the sewage plants are bypassed though its functional in file.


2 years ago

LINK to look up is HERE >


2 years ago

IMPROMPTU (To share sporadic personal reactions):
It is a sad commentary that, historically, especially in the recent years, such notorious episodes have come to the centre stage, thick and fast. Apart from ‘Adarsh’, several other like bizarre instances, such as “Campa Cola’, have come to be heard of, with a marked periodicity/in quick succession. In the current scenario, prevailing for long, it remains any body’s wild guess, kept loudly wondering in remorse, - whither scope or hopes for a change for the better.
The move for ushering in a regulatory regime for the realty sector, as made by the predecessor government, with an overwhelmingly large publicity in the media, has not gained the desired/expected momentum, thanks to the recalcitrant /indifferent attitude of one and all embowered both at the Centre and in the States. The reference is to the Bill for setting up a regulatory authority across the nation, of which there has been no such promising/assuring news for some time, as to pep up the people’s spirit at the bottom level.
As to the text of the Bill as last given publicity, what really that has in store for the future, even if and when comes to be enacted / translated into a reality, none can conceivably foretell. Be that as it could not, -going by the decades old history/sad experience, -have been expected to be any different,- if anyone were to care to , for studying and forming own independent opinion, may look up the contents of the Blog
@ http://vswaminathan-vswaminathan-swamilo... (so also the related Blogs)- setting out personal viewpoints.


2 years ago

152 out of 172 'Adarsh' type constructions in Maharashtra, are in Pune Nice to learn from far , PUNE do not GO FAR come to NVI-MUMBAI only u will find atleast I will give 6 examples with court approved cases.

sohan modak

2 years ago

Thanks Vinita. This shows that even those who were teaching about Environment (S.B. Mujumdar, former Professor of Botany at F.C. College)wouldn't care hoots when comes to easy money. For such people, Environmental problems are for others !Q

Sanjeev B

2 years ago

Wonderful work by Mt Kumbhar! Thanks to Moneylife for bringing this to light. But we can only act on this and spread the word if we have the actual data.

Can we get the links to the list of these projects please?

If more work needs to be done to extract this information from the documents, we can collectively pitch in. I'll be happy to volunteer my time for this.

Thanks once again.

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