Don't want fly by night operators in bank, defence, says Sitharaman

New Delhi: The government today said FII investment limit in the banking and defence sector has been retained at the existing level to prevent ‘fly by night operators’ from disrupting the sensitive segments.[caption id=“attachment_1634999” align=“alignleft” width=“380”]  Commerce and Industry Minister Nirmala Sitharaman. AFP[/caption] “In defence as regards the cap which prevailed for FII and in the banking particularly the private sector banking on FIIs… In those two specific areas, those specific sub-caps (will) prevail,” Commerce and Industry Minister Nirmala Sitharaman told reporters in New Delhi. She said that “we do not want fly by night operators or quick money coming in or going on (in sensitive sectors)”. The minister’s statement assumes significance as introduction of composite caps on foreign investment has led to confusion among bankers who say overseas portfolio investments can now go up to 74 percent as against the current ceiling of 49 percent. Portfolio investments (FIIS, FPIs, QFIs), which are in the nature of hot money, cannot go beyond the current limit of 49 percent in the private sector banks. Similarly in defence portfolio investments will be limited to the current 24 percent cap, although the FDI can go up to 100 percent on case to case basis. Promising a simpler foreign investment regime, the government has introduced a concept of composite cap for all kinds of overseas inflows including through FDI, FII and NRI routes – a move that would benefit retail companies and stock exchanges among others. The government’s decision was aimed at simplification of FDI policy with a view to attracting foreign investments and also improving ease of doing business in India. Under the existing policy, there are different caps for separate investment categories like FDI, FII and NRIs. On Parliament session, beginning tomorrow, she said the opposition will understand “the responsibility of running Parliament is equally to be shared by all parties”. She said that the government will discuss and consult with all the parties and move forward on these bills. She said that both the bills are being scrutinised by parliamentary committees. “…people of India want these reforms to move forward. I am sure that with a constructive cooperation, citizens of India will benefit from moving forward rather than staying where they are,” she said. On Vyapam scam, Sitharaman said the allegations are baseless and the BJP has readily agreed for a CBI inquiry. CBI has registered at least 12 cases so far, following Supreme Court’s direction, to probe the scam. Massive irregularities in various professional examinations and government job tests conducted by Madhya Pradesh Professional Examination Board or ‘Vyapam’ have been unearthed. On Lalit Modi controversy, she said Congress is providing a misleading information which are not based on facts. PTI