New Delhi: Two Memorandum of Understanding (MoUs) of Public Sector Undertakings of Ministry of Steel with Ministry of Railways were signed here today. An MoU of NMDC Limited, a Navratna PSU under the administrative control of Ministry of Steel and the Indian Railways in the presence of the Union Minister of Steel, Shri Beni Prasad Verma and Union Minister for Railways, Shri Pawan Kumar Bansal here today. RINL, a PSU under the Ministry of Steel, has also signed an MoU with the Indian Railways for setting up a forged wheel factory at Rae Bareli, Uttar Pradesh.
As per the provisions of the MoU, the 150 km Jagdalpur - Kirandul section of the Kottavalsa - Kirandul line of the East Coast Railway will be doubled to augment the evacuation capacity of NMDC to meet the increased demand for iron ore of the Indian steel industry.
Speaking on the occasion, Shri Beni Prasad Verma said that this will usher in an era of growth dedicated to the service of the Nation. He said, “I am sure that apart from benefitting the steel industry in India, the doubling of the railway line will transform the lives of the local tribal population in Bastar, Chattisgarh and adjacent states of Odisha and Andhra Pradesh.” Speaking about the setting up of the forged wheel factory Shri Verma said that the unit will be a specialized unit catering to the need for special grade wheels for high speed trains. He further added that setting up of the factory will considerably increase the industrial activity in the region and generate employment opportunities for the youth of the state.
Shri Pawan Kumar Bansal said that the proposed partnerships would provide the much needed impetus to investment in railway infrastructure and increase evacuation capacities from mines, plants and ports and freight traffic for the Railways. He also added that the proposed forged wheel factory would go a long way in meeting the future requirements of wheels for Indian Railways. Shri Bansal said that these two MoUs are good example of the synergy between Ministry of Railways and Ministry of Steel who have been partners for many years in developing country’s infrastructure. These projects also present a new innovative financial funding for infrastructure projects.
The MoU for doubling of railway line was signed between Shri Vinay Mittal, Chairman, Railway Board and Shri C.S. Verma, CMD, NMDC. The project will be implemented by Indian Railways at a cost Rs.826 Crores and same will be funded by NMDC with provisions for suitable returns through freight rebate. The Railways will additionally make necessary investment in wagons, locomotives, other maintenance facilities and deployment of staff. The new line is likely to create an additional traffic of upto 12 million tonne per annum (MTPA) in a phased manner.
The MoU for forged wheel factory was signed between Shri Keshav Chandra, Member Mechanical, Railway Board and Shri A.P. Choudhary, CMD, RINL. The Forged Wheel Factory being set up by RINL to supply forged wheels to the Indian Railways will have a capacity of producing 1,00,000 wheels every year. The factory, the biggest such plant in India will be completed within a schedule of 36 months at a cost of Rs. 1000 crores (Approximately) and will generate 500 to 600 jobs. The Raw material for the factory will be supplied by RINL’s plant in Vishakhapatnam in the form of Continuous Cast (CC) rounds.
Also present on the occasion were the Secretary, Ministry of Steel, Shri D.R.S. Chaudhary and other senior officers of the Ministry of Steel and Ministry of Railway.
Success in my Habit
Tuesday, December 25, 2012
Ceiling for FDI in ARCs raised to 74% from 49%
New Delhi: The government has increased the ceiling for foreign direct investment ( FDI) in asset reconstruction companies (ARCs) to 74 per cent from 49 per cent.
This is, however, subject to the condition that no sponsor should hold more than 50 per cent of the shareholding in an ARC, either by way of FDI or by routing through a foreign institutional investor (FII).
Foreign investment in ARCs will have to comply with the FDI norms in terms of entry route conditionality and sectoral caps, the finance ministry said in a release.
The 74 per cent FDI limit in ARCs will be the combined limit of FDI and FII.
With this, the prohibition on investment by FIIs in ARCs will be removed.
However, the total shareholding of an individual FII should not exceed 10 per cent of its total paid-up capital, according to the release.
“The limit of FII investment in security receipts (SRs) may be enhanced from 49 per cent to 74 per cent. Further, the individual limit of 10 per cent for investment of a single FII in each tranche of SRs issued by ARCs may be dispensed with. Such investment should be within the FII limit on corporate bonds prescribed from time to time, and sectoral caps under the extant FDI regulations should be complied with,” said the release.
The government reviewed the ceilings of FDI and FII after consulting the stakeholders and sector regulators.
The Reserve Bank of India and the Securities and Exchange Board of India will issue relevant notifications.
This is, however, subject to the condition that no sponsor should hold more than 50 per cent of the shareholding in an ARC, either by way of FDI or by routing through a foreign institutional investor (FII).
Foreign investment in ARCs will have to comply with the FDI norms in terms of entry route conditionality and sectoral caps, the finance ministry said in a release.
The 74 per cent FDI limit in ARCs will be the combined limit of FDI and FII.
With this, the prohibition on investment by FIIs in ARCs will be removed.
However, the total shareholding of an individual FII should not exceed 10 per cent of its total paid-up capital, according to the release.
“The limit of FII investment in security receipts (SRs) may be enhanced from 49 per cent to 74 per cent. Further, the individual limit of 10 per cent for investment of a single FII in each tranche of SRs issued by ARCs may be dispensed with. Such investment should be within the FII limit on corporate bonds prescribed from time to time, and sectoral caps under the extant FDI regulations should be complied with,” said the release.
The government reviewed the ceilings of FDI and FII after consulting the stakeholders and sector regulators.
The Reserve Bank of India and the Securities and Exchange Board of India will issue relevant notifications.
TCS to invest Rs 1,350 cr in new campus at Rajarhat
Mumbai/Pune: Mumbai/Pune, Dec 20 Tata Consultancy Services is setting up a new development campus at Rajarhat near Kolkata with an investment of about Rs 1,350 crore
The campus, spread over 40 acres, will house over 16,500 seats on completion. It would become operational by the end of financial year 2014-15, Tata Consultancy Services (TCS) said in a statement today.
“Our growing presence in Kolkata continues to be of strategic importance for our overall business growth. We remain committed to working in close collaboration with all stakeholders in the state to help in the development of local talent and provide our customers with world-class IT solutions from this location,” TCS Chief Financial officer and Executive Director S. Mahalingam said.
The campus would be built in two phases, with the first phase to be completed in the first quarter of 2014 and the second phase by the fourth quarter of the year. In the first phase, 7,000 seats will be ready and the remaining 9,500 seats would be completed under the second phase.
“The Rajarhat facility will drive the next phase of our growth in the eastern region and help us access skilled professionals and students from in and around Kolkata. Our investment will also help catalyse further development of the talent and IT ecosystem in the area,” TCS Executive Vice-President and Global Head (Human Resources) Ajoy Mukherjee said.
Skills upgradation
Separately, the country’s largest software exporter has introduced a scheme to upgrade the skills of workers in construction and related sectors such as metalwork across the country.
“TCS has always taken the lead in developing IT and engineering talent in India. Now we are looking at how we can help also build the base of other important skills that are important for sustaining economic growth. West Bengal has a significant, scalable pool of people who can contribute to the construction industry nationally as tradesmen,” Mahalingam said.
The programme will be carried out during the construction phase while building new campuses in Kolkata, Indore and Nagpur. TCS has already launched a pilot programme at Rajarhat, where it is constructing a software development campus.
Over the course of the construction period, as many as 2,000 workers will be trained at the on-site Construction Skill Training Centre (CTSC).
Trained workers from the CTSC will be employed by building contractors at the site during the construction phase. This skill development programme will also enhance awareness towards safety-at-site and increase productivity in the industry.
LEED certification
Using sustainable, local materials for construction as well as by deploying green technologies effectively across the campus, TCS will aim to get the highest LEED certification to demonstrate its effectiveness in considerably reduce the environmental footprint of the campus.
The salient features include generation of 850 kilowatts of solar power for campus use, zero waste discharge facility with bio digester which will turn waste into gas for cooking and a sewerage treatment plant which will recycle water for use in landscaping and air conditioning.
The Rajarhat campus has facilities like amphitheatre, auditorium, cafeterias, libraries and large green open spaces, and house fitness facilities like tennis courts, basketball court, gymnasium as well as temporary accommodation for employees.
The campus, spread over 40 acres, will house over 16,500 seats on completion. It would become operational by the end of financial year 2014-15, Tata Consultancy Services (TCS) said in a statement today.
“Our growing presence in Kolkata continues to be of strategic importance for our overall business growth. We remain committed to working in close collaboration with all stakeholders in the state to help in the development of local talent and provide our customers with world-class IT solutions from this location,” TCS Chief Financial officer and Executive Director S. Mahalingam said.
The campus would be built in two phases, with the first phase to be completed in the first quarter of 2014 and the second phase by the fourth quarter of the year. In the first phase, 7,000 seats will be ready and the remaining 9,500 seats would be completed under the second phase.
“The Rajarhat facility will drive the next phase of our growth in the eastern region and help us access skilled professionals and students from in and around Kolkata. Our investment will also help catalyse further development of the talent and IT ecosystem in the area,” TCS Executive Vice-President and Global Head (Human Resources) Ajoy Mukherjee said.
Skills upgradation
Separately, the country’s largest software exporter has introduced a scheme to upgrade the skills of workers in construction and related sectors such as metalwork across the country.
“TCS has always taken the lead in developing IT and engineering talent in India. Now we are looking at how we can help also build the base of other important skills that are important for sustaining economic growth. West Bengal has a significant, scalable pool of people who can contribute to the construction industry nationally as tradesmen,” Mahalingam said.
The programme will be carried out during the construction phase while building new campuses in Kolkata, Indore and Nagpur. TCS has already launched a pilot programme at Rajarhat, where it is constructing a software development campus.
Over the course of the construction period, as many as 2,000 workers will be trained at the on-site Construction Skill Training Centre (CTSC).
Trained workers from the CTSC will be employed by building contractors at the site during the construction phase. This skill development programme will also enhance awareness towards safety-at-site and increase productivity in the industry.
LEED certification
Using sustainable, local materials for construction as well as by deploying green technologies effectively across the campus, TCS will aim to get the highest LEED certification to demonstrate its effectiveness in considerably reduce the environmental footprint of the campus.
The salient features include generation of 850 kilowatts of solar power for campus use, zero waste discharge facility with bio digester which will turn waste into gas for cooking and a sewerage treatment plant which will recycle water for use in landscaping and air conditioning.
The Rajarhat campus has facilities like amphitheatre, auditorium, cafeterias, libraries and large green open spaces, and house fitness facilities like tennis courts, basketball court, gymnasium as well as temporary accommodation for employees.
UAE company bags contract from Supertech
New Delhi: Real estate developer Supertech has roped in the UAE-based Arabian Construction Company (ACC) to construct its tallest mixed-used tower, Supernova, at a cost of Rs 650 crore. ACC has been given the mandate to complete the project in four years.
When completed, one of the towers, Spira, will stand 300 m tall comprising 80 floors. It will include a luxury residence, two five-star hotels and Spira suites. The tower will also have a helipad, an observatory deck, an exclusive clubhouse and view of the Okhla Bird Sanctuary. It is being developed with an investment of Rs 2,700 crore.
ACC, which has constructed several iconic building such as the Emirates headquarters and Etisalat office in West Asia, said it would use the ‘jump form’ technology to construct the towers.
Supertech CMD, R.K Arora, and ACC Director, Rasheed Mikati, signed the contract. ACC India Managing Director, Ani Ray, said this was the first standalone contract for the company.
ACC is also constructing Lodha Developers’ project ‘World One’ in Mumbai, which has 117 floors with 450 m height, in partnership with Simplex Infrastructures, he added.
When completed, one of the towers, Spira, will stand 300 m tall comprising 80 floors. It will include a luxury residence, two five-star hotels and Spira suites. The tower will also have a helipad, an observatory deck, an exclusive clubhouse and view of the Okhla Bird Sanctuary. It is being developed with an investment of Rs 2,700 crore.
ACC, which has constructed several iconic building such as the Emirates headquarters and Etisalat office in West Asia, said it would use the ‘jump form’ technology to construct the towers.
Supertech CMD, R.K Arora, and ACC Director, Rasheed Mikati, signed the contract. ACC India Managing Director, Ani Ray, said this was the first standalone contract for the company.
ACC is also constructing Lodha Developers’ project ‘World One’ in Mumbai, which has 117 floors with 450 m height, in partnership with Simplex Infrastructures, he added.
SIDBI inks pacts with RRBs, urban co-op banks in Bengal
Kolkata: The Small Industries Development Bank of India (SIDBI) has entered into agreements with eight regional rural banks (RRBs) and urban co-operative banks in West Bengal.
SIDBI has already signed memorandums of understanding with the RRBs and co-operative banks for increasing credit flow to the micro, small and medium enterprises (MSMEs) in the region, said a press statement issued by SIDBI.
The MoUs would aim at training the staff of RRBs and co-operative banks in project appraisal, monitoring and collection as also providing free access to software on a down-scaling methodology developed for lending to micro enterprises.
“The down-scaling model focuses on cash flow-based lending instead of the traditional security-based lending, which is important for small and tiny enterprises,” the release said.
SIDBI has already signed memorandums of understanding with the RRBs and co-operative banks for increasing credit flow to the micro, small and medium enterprises (MSMEs) in the region, said a press statement issued by SIDBI.
The MoUs would aim at training the staff of RRBs and co-operative banks in project appraisal, monitoring and collection as also providing free access to software on a down-scaling methodology developed for lending to micro enterprises.
“The down-scaling model focuses on cash flow-based lending instead of the traditional security-based lending, which is important for small and tiny enterprises,” the release said.
FM radio sector may hit Rs 2,300-cr mark within 3 years
New Delhi: The FM radio sector is expected to touch the Rs 2,300-crore mark within three years of the roll-out of the much anticipated Phase III licences, according to estimates by CII and Ernst & Young. The sector is expected to close this fiscal year at Rs 1,400 crore with 245 private FM stations.
Currently, FM radio contributes 4 per cent to the total ad industry, lower than the global average share of 5 to10 per cent. The report stated that though radio is not considered as primary advertising platform currently, the implementation of Phase III with 839 frequencies will help the sector provide advertisers with a much deeper reach.
Listenership is largely driven by consumption at home followed by people tuning in when in transit. Around 25 per cent of total radio listenership is now on mobile phones, fuelled by handset manufacturers that have made FM radio a standard feature in most of their models.
The report said while the Phase III auctions of FM radio frequencies is expected to cover 294 cities with the auction for 839 licenses, only 52 of these licenses will be in the high revenue generating category A+, A and B cities. Experts believe though margins of the radio stations will decline in the short run they will stabilise in 3-5 years and rise subsequently.
“Phase III is also likely to make the industry more conducive to M&A due to proposals such as reduction of the license lock-in period from 5–3 years, an increase in the license period from 10 to 15 years, significantly more networking between all the stations to enable cost optimisation, ownership of multiple frequencies in a city and an increase in the foreign investment limit to 26 per cent from the current 20 per cent,” the report stated.
Ashish Pherwani, Partner, Ernst & Young, said that the growth of the FM radio industry revenues would depend on “enabling networking and cost management, development of a measurement metric which supports the industry, and ensuring license fee prices during Phase III auctions are not irrational.”
The growth in mobile and internet ad spends could, however, pose a threat to the rise of FM radio.
Some of the other key challenges highlighted by the report include limited inventory, inability to demonstrate return on investments and slow recovery of ad effective rates. “Therefore, the need of the hour is for radio industry is to collaborate and implement a measurement system that supports the growth of the industry,” the report stated.
According to IRS 2012 Q2 data, radio has an estimated audience of 158 million people, out of which FM radio accounts for 106 million. It also said that advertising revenues comprise nearly 90 per cent total revenue generated by FM radio companies.
Currently, FM radio contributes 4 per cent to the total ad industry, lower than the global average share of 5 to10 per cent. The report stated that though radio is not considered as primary advertising platform currently, the implementation of Phase III with 839 frequencies will help the sector provide advertisers with a much deeper reach.
Listenership is largely driven by consumption at home followed by people tuning in when in transit. Around 25 per cent of total radio listenership is now on mobile phones, fuelled by handset manufacturers that have made FM radio a standard feature in most of their models.
The report said while the Phase III auctions of FM radio frequencies is expected to cover 294 cities with the auction for 839 licenses, only 52 of these licenses will be in the high revenue generating category A+, A and B cities. Experts believe though margins of the radio stations will decline in the short run they will stabilise in 3-5 years and rise subsequently.
“Phase III is also likely to make the industry more conducive to M&A due to proposals such as reduction of the license lock-in period from 5–3 years, an increase in the license period from 10 to 15 years, significantly more networking between all the stations to enable cost optimisation, ownership of multiple frequencies in a city and an increase in the foreign investment limit to 26 per cent from the current 20 per cent,” the report stated.
Ashish Pherwani, Partner, Ernst & Young, said that the growth of the FM radio industry revenues would depend on “enabling networking and cost management, development of a measurement metric which supports the industry, and ensuring license fee prices during Phase III auctions are not irrational.”
The growth in mobile and internet ad spends could, however, pose a threat to the rise of FM radio.
Some of the other key challenges highlighted by the report include limited inventory, inability to demonstrate return on investments and slow recovery of ad effective rates. “Therefore, the need of the hour is for radio industry is to collaborate and implement a measurement system that supports the growth of the industry,” the report stated.
According to IRS 2012 Q2 data, radio has an estimated audience of 158 million people, out of which FM radio accounts for 106 million. It also said that advertising revenues comprise nearly 90 per cent total revenue generated by FM radio companies.
Number of Indians visiting Vienna has doubled in last 6 years
New Delhi: More and more Indians tourists are heading for Vienna, the Austrian capital which is also known to be the city with the world's best quality of living. According to the Vienna Tourist Board, the number of Indians visiting Vienna has doubled over the last six years — with an estimated 25,000 Indian tourists dropping by.
The board expects that in 2012, night stays in local hotels by Indian tourists will exceed the 2011 record of over 55,000 room nights.
Not surprising since Vienna, according to HR advisory firm Mercer's Quality of Living index, has been ranked the city with the best quality of living. And has retained the title for four years on the trot. This sort of reputation is bound to attract tourists from everywhere, not just India.
"By blending its unique imperial architectural heritage with a distinguished legacy of great artists and musicians like Mozart and Beethoven, Vienna offers one of Europe's most dynamic urban spaces," says Verena Hable, a Vienna Tourism Board official, during a recent visit to Delhi.
"With Vienna emerging as a favoured destination by Indian tourists, we look to welcoming a significantly larger inflow of tourists in the coming years."
India has several points of connect with the Austrian capital. India-born conductor Zubin Mehta, who has lived in Vienna for many years and still conducts the Vienna Philharmonic Orchestra, often has fellow countrymen include his performance in their itinerary.
Vienna also allows Indian tourists to do a triangular tour of the major cities of the former Hapsburg empire, by including Budapest and Prague during their visit.
The board expects that in 2012, night stays in local hotels by Indian tourists will exceed the 2011 record of over 55,000 room nights.
Not surprising since Vienna, according to HR advisory firm Mercer's Quality of Living index, has been ranked the city with the best quality of living. And has retained the title for four years on the trot. This sort of reputation is bound to attract tourists from everywhere, not just India.
"By blending its unique imperial architectural heritage with a distinguished legacy of great artists and musicians like Mozart and Beethoven, Vienna offers one of Europe's most dynamic urban spaces," says Verena Hable, a Vienna Tourism Board official, during a recent visit to Delhi.
"With Vienna emerging as a favoured destination by Indian tourists, we look to welcoming a significantly larger inflow of tourists in the coming years."
India has several points of connect with the Austrian capital. India-born conductor Zubin Mehta, who has lived in Vienna for many years and still conducts the Vienna Philharmonic Orchestra, often has fellow countrymen include his performance in their itinerary.
Vienna also allows Indian tourists to do a triangular tour of the major cities of the former Hapsburg empire, by including Budapest and Prague during their visit.
Friday, December 21, 2012
Mahindra to buy US partner's stakes in truck JVs
Mumbai: Utility and tractor manufacturer Mahindra & Mahindra (M&M) has decided to buy the stake held by its US-based partner, Navistar International Corporation, in the truck and engine making joint ventures (JV) — Mahindra Navistar Automotives Ltd (MNAL) and Mahindra Navistar Engines Pvt Ltd (MNEPL) — for about Rs 175 crore.
M&M will acquire the 49 per cent stake held in both the JVs by the Navistar Group and make them wholly-owned subsidiaries. The JV for trucks was formed in 2005, while the JV for engines was formed in 2007.
While neither of the companies explained the logic behind such a move, experts said that despite being in the market for over three years, the JVs did not witness the demand expected from them, forcing the US partner to reorganise its resources.
The truck JV is yet to generate profits and M&M’s estimates of turning cash break-even this financial year remains bleak, due to the on-going slump in demand for heavy trucks in the domestic market.
Following the stake buy, M&M would take complete ownership of operations and continue to sell MNEPL and MNAL products. The sale requires regulatory approvals in India, is subject to conclusion of definitive agreements, and is expected to be completed in early 2013, the Mumbai-based company said in a statement.
The deal allows Navistar to continue sourcing components from India, while M&M would keep providing engineering services to Navistar. The US company would continue to support M&M through a licence agreement and extend necessary support to MNAL and MNEPL for the purpose of business continuity.
As part of its ‘Drive to Deliver’ turnround plan launched in August, Navistar has been conducting an analysis of all of its businesses and programmes to determine their return on invested capital (ROIC) and identify areas for improvement. Based on this business environment, Navistar has determined that it needs to redirect its efforts to other initiatives that more quickly contribute to the company’s goal to improve its ROIC,” Navistar said in a release.
Until last year, MNAL had seen an investment of Rs 710 crore with M&M projecting a further infusion of Rs 250 crore during 2012-14 for production and distribution expansion. M&M had Rs 750 crore of equity and 50-50 invested by both the partners along with debt as of that date.
Troy Clarke, president and CEO of Navistar, said, “While the Indian market has not expanded as we had originally expected, and industry challenges there continue in the near-term, we still see promise in India going forward.”
The Indian truck market is witnessing a renewed thrust by not just traditional players such as Tata Motors, VE Commercial Vehicles and Ashok Leyland, but also by new players such as Daimler (Bharat-Benz) and MAN and Scania. M&M and Navistar planned to be present in each of the commercial vehicle segments ranging from 3.5 to 49 tonne.
This is not the first time that strategic changes are seen in partnership involving M&M. The company had bought the stake held by Renault in the car making joint venture Mahindra Renault (MRPL). Prior to that, M&M had exited a tripartite joint venture involving Renault and Nissan.
M&M will acquire the 49 per cent stake held in both the JVs by the Navistar Group and make them wholly-owned subsidiaries. The JV for trucks was formed in 2005, while the JV for engines was formed in 2007.
While neither of the companies explained the logic behind such a move, experts said that despite being in the market for over three years, the JVs did not witness the demand expected from them, forcing the US partner to reorganise its resources.
The truck JV is yet to generate profits and M&M’s estimates of turning cash break-even this financial year remains bleak, due to the on-going slump in demand for heavy trucks in the domestic market.
Following the stake buy, M&M would take complete ownership of operations and continue to sell MNEPL and MNAL products. The sale requires regulatory approvals in India, is subject to conclusion of definitive agreements, and is expected to be completed in early 2013, the Mumbai-based company said in a statement.
The deal allows Navistar to continue sourcing components from India, while M&M would keep providing engineering services to Navistar. The US company would continue to support M&M through a licence agreement and extend necessary support to MNAL and MNEPL for the purpose of business continuity.
As part of its ‘Drive to Deliver’ turnround plan launched in August, Navistar has been conducting an analysis of all of its businesses and programmes to determine their return on invested capital (ROIC) and identify areas for improvement. Based on this business environment, Navistar has determined that it needs to redirect its efforts to other initiatives that more quickly contribute to the company’s goal to improve its ROIC,” Navistar said in a release.
Until last year, MNAL had seen an investment of Rs 710 crore with M&M projecting a further infusion of Rs 250 crore during 2012-14 for production and distribution expansion. M&M had Rs 750 crore of equity and 50-50 invested by both the partners along with debt as of that date.
Troy Clarke, president and CEO of Navistar, said, “While the Indian market has not expanded as we had originally expected, and industry challenges there continue in the near-term, we still see promise in India going forward.”
The Indian truck market is witnessing a renewed thrust by not just traditional players such as Tata Motors, VE Commercial Vehicles and Ashok Leyland, but also by new players such as Daimler (Bharat-Benz) and MAN and Scania. M&M and Navistar planned to be present in each of the commercial vehicle segments ranging from 3.5 to 49 tonne.
This is not the first time that strategic changes are seen in partnership involving M&M. The company had bought the stake held by Renault in the car making joint venture Mahindra Renault (MRPL). Prior to that, M&M had exited a tripartite joint venture involving Renault and Nissan.
Real estate & housing finance cos allowed to raise $1bn from abroad
Mumbai: The Reserve Bank of India has allowed real estate developers and housing finance companies to raise funds overseas for low-cost housing projects.
Developers and housing finance companies will be permitted to borrow $1 billion in 2012-13 under the low-cost affordable housing scheme, RBI said in a notification on Monday. The regulator said it will review the borrowing limit every year.
Developers with minimum five years of experience in residential projects and those who have not defaulted in any of their financial commitments to banks or any other agencies will be eligible to raise funds overseas.
The project for which the builder is raising funds should not be involved in any litigation. RBI has also made it mandatory that the project should be in conformity with the provisions of master plan/ development plan of the area.
"The layout should conform to the land use stipulated by the town and country planning department for housing projects," RBI said. "All necessary clearances from various bodies including revenue department with respect to land usage/environment clearance, etc are available on record."
Housing finance companies that are registered with the National Housing Bank and have a minimum capital of Rs 50 crore are eligible to raise funds overseas, RBI said. Bad loans of such companies should not exceed 2.5% of the net advances and it should have minimum net owned funds of about Rs 300 crore for the past three years to borrow overseas.
Developers and housing finance companies will be permitted to borrow $1 billion in 2012-13 under the low-cost affordable housing scheme, RBI said in a notification on Monday. The regulator said it will review the borrowing limit every year.
Developers with minimum five years of experience in residential projects and those who have not defaulted in any of their financial commitments to banks or any other agencies will be eligible to raise funds overseas.
The project for which the builder is raising funds should not be involved in any litigation. RBI has also made it mandatory that the project should be in conformity with the provisions of master plan/ development plan of the area.
"The layout should conform to the land use stipulated by the town and country planning department for housing projects," RBI said. "All necessary clearances from various bodies including revenue department with respect to land usage/environment clearance, etc are available on record."
Housing finance companies that are registered with the National Housing Bank and have a minimum capital of Rs 50 crore are eligible to raise funds overseas, RBI said. Bad loans of such companies should not exceed 2.5% of the net advances and it should have minimum net owned funds of about Rs 300 crore for the past three years to borrow overseas.
Banking Bill paves way for new banks, foreign investment
New Delhi: The government on Tuesday cleared the decks for the Reserve Bank of India ( RBI) to initiate the process to issue new banking licences and widened the window for infusion of capital into the banking sector.
The Lok Sabha cleared the Banking Laws (Amendment) Bill, 2011, after Finance Minister P Chidambaram agreed to drop the contentious proposal on allowing banks to do futures trading. He also clarified status quo would be maintained on the jurisdictions of RBI and the Competition Commission of India ( CCI) in the banking sector.
“Since it is important that the Bill is passed, I am dropping the controversial clauses.” While the central bank would regulate the banking sector, the competition watchdog would look at anti-competitive practices, Chidambaram said.
Most provisions in the Bill are to strengthen RBI. In Parliamentary democracy, give and take was required and rest of the Bill was important as RBI was awaiting more powers, the finance minister added.
Changes to the Bill would pave the way for RBI to issue new bank licences. The central bank had been insisting the enabling legislation be put in place before applications were invited for new bank licences.
As the Bill has provisions to increase investors’ voting rights in private banks to 26 per cent from the current 10 per cent, it is expected to bring in more foreign investment in the banking sector. In case of public sector banks, voting rights have been enhanced from one per cent to 10 per cent.
The Bill was passed by voice vote after the amendments proposed by the Left parties were rejected by the House. The Bill would now be taken up in the Rajya Sabha.
The insurance Bill, which seeks to raise the cap on foreign direct investment in insurance firms to 49 per cent from the present 26 per cent, would not be taken up for consideration in the ongoing session of Parliament, Chidambaram told reporters after the passage of the Banking Bill.
Earlier, during the discussion on the Banking Bill, he highlighted the need for consolidation in the banking sector so that India could have two- three large public sector banks that could compete globally.
He also said about 6,000 new bank branches would be opened and that banks planned to recruit around 84,000 people this year. He reiterated the government was committed to infusing Rs 15,000 crore into public sector banks in the current financial year and more next year. Capital might be infused now through rights issues and bonus shares.
Earlier, Bharatiya Janata Party leader Yashwant Sinha, who heads the standing committee on finance, had opposed the two contentious clauses in the Banking Bill, saying those were not considered by his panel. He had said the provisions would allow banks to put their money in speculative trading.
The Lok Sabha cleared the Banking Laws (Amendment) Bill, 2011, after Finance Minister P Chidambaram agreed to drop the contentious proposal on allowing banks to do futures trading. He also clarified status quo would be maintained on the jurisdictions of RBI and the Competition Commission of India ( CCI) in the banking sector.
“Since it is important that the Bill is passed, I am dropping the controversial clauses.” While the central bank would regulate the banking sector, the competition watchdog would look at anti-competitive practices, Chidambaram said.
Most provisions in the Bill are to strengthen RBI. In Parliamentary democracy, give and take was required and rest of the Bill was important as RBI was awaiting more powers, the finance minister added.
Changes to the Bill would pave the way for RBI to issue new bank licences. The central bank had been insisting the enabling legislation be put in place before applications were invited for new bank licences.
As the Bill has provisions to increase investors’ voting rights in private banks to 26 per cent from the current 10 per cent, it is expected to bring in more foreign investment in the banking sector. In case of public sector banks, voting rights have been enhanced from one per cent to 10 per cent.
The Bill was passed by voice vote after the amendments proposed by the Left parties were rejected by the House. The Bill would now be taken up in the Rajya Sabha.
The insurance Bill, which seeks to raise the cap on foreign direct investment in insurance firms to 49 per cent from the present 26 per cent, would not be taken up for consideration in the ongoing session of Parliament, Chidambaram told reporters after the passage of the Banking Bill.
Earlier, during the discussion on the Banking Bill, he highlighted the need for consolidation in the banking sector so that India could have two- three large public sector banks that could compete globally.
He also said about 6,000 new bank branches would be opened and that banks planned to recruit around 84,000 people this year. He reiterated the government was committed to infusing Rs 15,000 crore into public sector banks in the current financial year and more next year. Capital might be infused now through rights issues and bonus shares.
Earlier, Bharatiya Janata Party leader Yashwant Sinha, who heads the standing committee on finance, had opposed the two contentious clauses in the Banking Bill, saying those were not considered by his panel. He had said the provisions would allow banks to put their money in speculative trading.
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