The Cabinet Committee on Economic Affairs today approved infusion of Rs 12,517 crore into public sector banks by March in order to help banks comply with Basel III norms and to boost their Tier-I capital, Finance Minister P Chidambaram said today.
Chidambaram did not disclose the names of the banks that will get capital infusion. However, Pratip Choudhury, chairman of India's leading lender State Bank of India, recently said the bank is likely to get about Rs 3,00o crore as part of the recapitalisation.
This capital infusion would not come through a rights issue but in the form of a preferential allotment of shares to the Centre, Chaudhuri had said.
The government injected about Rs 32,000 crore in the previous two financial years. During 2011-12, public sector banks got Rs 12,000 crore for improving their capital adequacy ratio.
He also directed public banks to lend loans of Rs 20,000 to Below Poverty Line families at 4 percent interest if beneficiaries demand such loans.
Govt approves 10% stake sale in EIL, hopes to raise Rs 800 cr
The cabinet also approved the divestment of 10 percent stake in Engineers India. The government, which owns 90.40 percent owned in Engineers India, expects to garner around Rs 800 crore from the disinvestment, Finance Minister P Chidambaram said today. In 2010, the government divested 10 percent stake through an FPO in EIL, a leader in engineering consultancy. EIL scrip was trading at Rs 229.80 on the BSE, down 3.73 percent from its previous close.
Although the government has not indicated the timeframe for the public offering or how much it wanted to raise from the process, reports suggest the issue is likely to hit the market in April or May this year.
The Cabinet, however, deferred a decision on a Rs 200 crore revival package for sick public sector unit Scooters India.
The government aims to raise Rs 30,000 crore from share sales in state-run companies in the fiscal year that ends in March. So far it has managed to garner just under 25 percent of the target.
NID, Ahemedabad gets declared as a university of national importance
Meanwhile, the Cabinet also declared the National Institute of Design in Ahmedabad as a university of national importance.
Govt tweaks criteria for SAT chief; hopes to fill vacancy soon
The Cabinet also accepted the Sebi Act Amendment to appoint a SAT chief. Chidambaram announced a larger field of eligibility for the presiding officer at SAT and has even allowed retired high court judges to be eligible for the post. Under the modified norms, a retired judge of a High Court with seven years of experience would be eligible for the appointment for the SAT chief's post. As per the existing criteria, only a retired judge of the Supreme Court or a former Chief Justice of a High Court can be appointed as SAT presiding officer.
"We are hopeful that we can fill this vacancy quickly and ordinances will be promulgated and then Chief Justice of India will be (requested)... to suggest the name of the judge," Chidambaram said.
Enhancement of unit assistance under the Indira Awaas Yojana has also been approved in view of the steep increase in cost of materials, along with the introduction of a Bill for declaring Lakhipur Bhanga stretch of Barak river as a national waterway.