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Showing posts with label FDI. Show all posts
Showing posts with label FDI. Show all posts

Wednesday, 10 May 2017

07:50

Central Government may soon allow 100% FDI in cash, ATM management companies

Central Government may soon allow 100% FDI in cash, ATM management companies

New Delhi: The Government of India is likely to allow 100 per cent foreign direct investment (FDI) in cash and ATM management companies, since they are not required to comply with the Private Securities Agencies Regulations Act (PSARA). This will be an advantage for cash management companies as well as for companies making currency authenticators and sorting devices and currency counting machines. In 2015, the government allowed 100 per cent FDI in white label ATM operations under the automatic route. Foreign investments help in improving balance of payments and strengthening of rupee against the dollar among other global currencies. FDI in India grew by 22 per cent to reach US$ 35.85 billion during April-December, 2016-17.

Source:IBEF


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Thursday, 14 July 2016

23:52

All India Bank Strike on 29th July, 2016

All India Bank Strike on 29th July, 2016

PRESS RELEASE 12.07.2016

All India Bank Strike on 29th July, 2016
By 10 lacs Bank Employees and Officers.
At the call of United Forum of Bank Unions
Against Central Government's retrograde banking reforms
At the call of UNITED FORUM OF BANK UNIONS consisting of 9 trade unions of bank employees and bank officers ( AIBEA , AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW, NOBO), 10 lacs of bank employees and officers working in Public Sector Banks, old Private Banks, Regional Rural Banks, Foreign Banks and Co-operative Banks will observe One Day Protest Strike on 29th July, 2016 to oppose the anti-people banking reform policies of the Central Government.
Demands: Halt retrograde Banking Sector reforms
1. Do not privatise banks
2. Do not increase private capital in Public Sector Banks
3. Do not encourage FDI in banking sector
4. Do not give license to corporates to start Banks
5. Do not give license to private hands to open Small Banks and Payment Banks
6. Do not privatise Regional Rural Banks
7. Do not weaken co-operative Banks
8. Do not consolidate and merge Banks
9. Do not weaken priority sector loans in Banks
10. Extend more credit to agriculture sector
11. Recover bad loans through stringent measures
12. Increase interest rate on Deposits in Banks
The Notice for the strike has been served on the Indian Banks' Association yesterday 
by the UFBU

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Tuesday, 28 June 2016

08:18

Banks should shed reluctance in lending to urban poor: Naidu

Banks should shed reluctance in lending to urban poor: Naidu

New Delhi:Minister for Urban Development M. Venkaiah Naidu on Monday urged commercial banks to “shed reluctance” in lending to the urban poor, stating that loan repayment by them was 98 per cent.
“Loan repayment by Self-Help Groups is 98 per cent and hence were most bankable and eligible for lending. With several initiatives being taken to promote domestic and Foreign Direct Investment in various sectors, there is a vast scope for employment generation leading to increased demand for skilled manpower,” said Naidu.
He was inaugurating the National Conference on ‘Deendayal Antyodaya Yojana-National Urban Livelihoods Mission’ (DAY-NULM)organised here. Naidu stressed the need for enhanced credit flow to the Self-Help Groups and for self-employment through individual and group enterprises under the mission.
Stating that the government was committed to eliminate poverty by “skilling the unskilled, funding the unfunded and reaching the unreached”, Naidu said that there was a need for convergence in implementation of skill development programmes and scaling them up in a convergence mode.
Naidu said that 25 per cent of people still were living Below Poverty Line, which was clearly unacceptable when the country is aspiring for a lead role in the comity of nations.
“Concerted efforts need to be mounted to eliminate poverty. While banks should scale up financing, loans need to be repaid,” said Naidu.
Minister of Skill Development and Entrepreneurship Rajiv Pratap Rudy on the occasion said: “An integrated eco-system is being put in place for skilling of 30 crore people while 24 ministries are involved in handling 70 skill development programmes.”
Expressing concerns over skills not being given due recognition as a result of which there was no professors of carpentry or plumbing, Rudy said the paradox of people with 15 years of formal education not finding jobs being promised jobs after a 15-week training was an issue.
Rudy said the problem needs to be resolved with proper course content and certification. He urged the banks to accept skill certification issued by approved agencies for advancing loans to skilled people.
Minister of State for Finance Jayant Sinha suggested promotion of financial literacy among the beneficiaries as part of skill certification under skill development programmes, to enable them with better management of money and enterprises for further growth in chosen areas of career development.
Favouring credit lending in the name of women for being adept in managing finances, Sinha called for lending higher amounts under anti-poverty programmes.

Source:ForeverNews
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Friday, 1 April 2016

15:22

Foreign Direct Investment in Online Marketing?

Foreign Direct Investment in Online Marketing?

New clarity on e-commerce may smoothen entry for foreign giants like Alibaba 

BENGALURU: The new rules on foreign direct investment in online marketplaces could accelerate the entry of overseas firms such as China's Alibaba Group, both as investors and retailers, and potentially alter India's ecommerce landscape given their deep pockets.

Alibaba Group, a significant investor in electronic payments and marketplace Paytm, recently declared it was keen to begin operations directly in India this year, after its president J Michael Evans and global managing director K Guru Gowrappan met Telecom Minister Ravi Shankar Prasad. 

"The policy will bring in more interest from investors who have not yet entered the (Indian) market from countries like China and Japan as the fear of working through loopholes is now gone," said Satish Meena, a senior analyst with Forrester Research. 

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Friday, 11 March 2016

07:22

Foreign investors can buy stake in Kotak Bank: RBI

Foreign investors can buy stake in Kotak Bank: RBI

The Reserve Bank has allowed overseas investors to buy stake in Kotak Mahindra Bank as the foreign shareholding in the private bank went below the prescribed limit.

The aggregate shareholdings of foreign investors through global depository receipts, FDI, FII and NRIs, among others, in Kotak Mahindra Bank has gone below the prescribed limit stipulated, RBI said in a release.

"Hence the restrictions placed on the purchase of shares of the above bank are withdrawn with immediate effect", RBI said in a release.

As per data available on BSE, the promoter held 33.73 per cent stake in the Bank as of December 2015. Public shareholding was at 66.27 per cent at December-end.

The separate data regarding foreign shareholding was not provided.

Under the existing rules, foreign direct investment limit in private sector banks is at 74 per cent. However, government is considering to increase the foreign direct investment (FDI) limit in private banks to 100 per cent.

FIIs, NRIs and PIOs (Persons of Indian Origins) can invest in primary and secondary capital markets in India through PIS.

RBI monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis and has fixed the cut-off points two percentage points lower than the actual ceiling.
Shares of Kotak Mahindra Bank closed 1.35 per cent higher at Rs 659.70 apiece on BSE today.

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Wednesday, 9 March 2016

06:49

FIPB clears Rs 14000 crore FDI proposals; Nippon, Yes Bank get nod

FIPB clears Rs 14000 crore FDI proposals; Nippon, Yes Bank get nod

The Foreign Investment Promotion Board (FIPB) today cleared 16 FDI proposals worth Rs 14,000 crore including that of Japan's Nippon hiking stake in Reliance Life Insurance to 49 per cent, as also that of four other foreign insurers.

The FIPB also approved the proposal of Yes Bank to hike foreign investment limit to 74 per cent, from present 41 per cent-- making it the first bank to get approval for hiking FDI limit after the new regulations were announced in November.

"The FIPB today approved 16 foreign direct investment proposals, out of the 34 on agenda," a source said.

FIPB, chaired by Economic Affairs Secretary Shaktikanta Das, also cleared Sun Life Financial Investments Inc's proposal to hike stake in Birla Sunlife Insurance company to 49 per cent.
The proposal of Japan's Nippon Life Insurance to acquire another 23 per cent stake in Reliance Life Insurance was also cleared by the Board. Nippon currently holds 26 per cent in Reliance Life.

Also Yes Bank's proposal to hike FDI limit was cleared by the Board, the source said.
In November 2015, the government had removed sub-limit restrictions for foreign investments in private sector banks within the overall sectoral limit of 74 per cent.

In the private banking sector, the government has introduced full fungibility of foreign investment and accordingly, "FIIs/FPIs/QFIs, following due procedure, can now invest up to sectoral limit of 74 per cent, provided there is no change of control and management of the investee company", the government had said.

FIPB also cleared the proposal of Aviva Life Insurance and Raheja QBE General Insurance Company to hike foreign investment limit in their respective companies to 49 per cent.
The other proposals cleared by the FIPB included Tata AIA Life Insurance Company, Tata Sikorsky Aerospace Limited and International Asset Reconstruction Co Pvt Ltd.

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Thursday, 3 March 2016

08:25

Budget is a let-down for banking sector, says banks' union

Budget is a let-down for banking sector, says banks' union

C H Venkatachalam, general secretary, All India Bank Employees Association (AIBEA) said that Budget  2016-17 is yet another disappointment for banking sector. He said the Finance Minister has not announced any drastic measure to recover the bad loans.

AIBEA has been demanding that government should publish the names of the bank loan defaulters and also give more teeth to the recovery laws but no such announcement has been made in this Budget.

Particularly, the deliberate willful default of bank loans should be treated as criminal offence and criminal action should be taken on such defaulters. But here also, the government has not done anything.

On capital infusion, he questioned, when the PSBs belong to the government, why there should be partial recapitalisation of Banks.

According to Venkatachalam, the Rs 25,000 crores additional capital to PSBs, announced by the Finance Minister, is now sufficient as the actual requirement is said to be more than Rs 2 lakh crore.

"This means remaining capital will be mobilised from private investments including through FDI," said Venkatachalam.

"Thus reiteration that Banks will be under public sector is only a myth and the real agenda is privatisation. This is very clear from the declaration that IDBI Bank will be privatised. This is in negation of all repeated assurances on the floor of the Parliament in the past that IDBI Bank will be in public sector only," he said.

On permitting FDI in the Assert Reconstruction Companies, he said, "This is an undesirable move. This means that bank loans would be sold out at a discount to foreign companies in order to clean the balance sheets".

The union also wants the government to impound Vijay Mallya's passport. Venkatachalam alleged there are reports that Kingfisher's Vijay Mallya wants to leave country without repaying bank dues of over Rs 7,500 crore to 17 Banks.

"His passport should be impounded by the government and he should not be allowed to leave India without repaying the loans," said Venkatachalam.

He added, soft approach to bank loan defaulters and talking of more private capital in Banks only means that the bank loan defaulters can become owners of the Banks. 



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Wednesday, 17 February 2016

20:14

Budget 2016-17 :FDI limit in Public Sector Banks may increase from 20 to 49%

Budget 2016-17 :FDI limit in Public Sector Banks may increase from 20 to 49%

Govt mulls hiking FDI cap in PSU banks to 49%

NEW DELHI, FEB 16:  The government is considering to increase the foreign investment limit in public sector banks to 49 per cent from 20 per cent with a view to attract overseas inflows.

The Finance Ministry is looking into the proposal, sources said, adding that it may be announced in the forthcoming Budget 2016-17.

If the government accepts this proposal, it would lead to amendments in various Acts dealing with public sector banks to enable raising foreign investment limit.

Currently, 20 per cent foreign investment is permitted in the PSU banks under government approval route.

Last year, the government had relaxed the foreign investment norms in private sector banks. It had introduced full fungibility of foreign investment and accordingly FIIs, FPIs, QFIs were permitted to invest up to a sectoral limit of 74 per cent, provided there is no change of control and management of the investee company.

Earlier, portfolio investment was permitted up to 49 per cent in private sector banks.

The increase in foreign investment would result in flow of capital which public sector banks require urgently. The government can provide limited support to state-owned banks as the resources are limited.

Last year, the government had announced a revamp plan ‘Indradhanush’ to infuse Rs. 70,000 crore in state-owned banks over four years, while they will have to raise a further Rs. 1.1 lakh crore from the markets to meet their capital requirements in line with global risk norms Basel III.

As per the blueprint, PSU banks will get Rs. 25,000 crore this fiscal and also in the next fiscal. Besides, Rs. 10,000 crore each would be infused in 2017-18 and 2018-19.

Of the Rs. 25,000 crore earmarked for 2015-16, the government has pumped in about Rs. 20,088 crore in 13 public sector banks so far.

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Wednesday, 18 November 2015

07:21

RBI Allows Pipavav Defence to Raise Foreign Shareholding

RBI Allows Pipavav Defence to Raise Foreign Shareholding

Reserve Bank on Tuesday allowed foreign investors to raise their investment in Pipavav Defence and Offshore Engineering Ltd.

"Registered Foreign Portfolios Investors/Foreign Institutional Investors /Qualified Foreign Investors can now invest up to 12 per cent and Non Resident Indians / Persons of Indian Origin up to 2 per cent of the paid up capital of Pipavav Defence and Offshore Engineering Limited under the Portfolio Investment Scheme (PIS)," RBI said in a release.

RBI said the company passed resolutions at its Board of Directors and shareholders' level for allocating the sub limits for the purchase of its equity shares by these entities.

The government last week relaxed foreign direct investment norms in the defence sector by allowing FDI up to 49 per cent under automatic route and beyond that through the FIPB's approval.

The government has also done away with the earlier requirement of mandatory permission from the Cabinet Committee on Security (CCS) beyond 49 per cent.

As per the earlier FDI policy in the defence sector, foreign investment up to 49 per cent was permitted under government approval route.

Portfolio investment and investment by FVCIs were restricted to 24 per cent only.

As per data on BSE, FIIs held 4.79 per cent in Pipavav Defence and Offshore Engineering as of quarter ended September 2015.

FIIs, NRIs and PIOs (Persons of Indian Origins) can invest in primary and secondary capital markets in India through PIS.

The RBI monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis and has fixed the cut-off points two percentage points lower than the actual ceiling.

Shares of the company closed at Rs 62.95 per share on the BSE today, up 5.09 per cent from previous level.

Source:BankingUpdates

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Friday, 13 November 2015

23:28

Private banks to gain with easing of Foreign Direct Investment

Private banks to gain with easing of Foreign Direct Investment 

Axis Bank, Kotak Mahindra Bank and YES Bank are likely to be the biggest beneficiaries of the central government’s decision to ease foreign investment limits in the sector.

The decision was to scrap the sub-limits for foreign direct investment and foreign institutional investment (FII), instead having a composite cap of 74 per cent. HDFC Bank and ICICI Bank already have a very high foreign shareholding and won’t benefit from this change in norms.

As the process of capital raising will become simpler, lenders actively looking to do so will gain. For instance, YES Bank was planning to raise Rs 6,607.5 crore; it might now go for qualified institutional placement, instead of an issue of American or global depositary receipts. It had said it was preparing for both routes of doing so.

“There will be more capital flowing into the system and significantly ease the procedural investment decisions by foreign investors. YES Bank had got board approval in April and an enabling approval from our shareholders for increasing FII limit up to 74 per cent in the annual general meeting in June. So, we have head room to substantially increase FII holding and this will enhance the flexibility of various capital-raising options,” said Rana Kapoor, its managing director.

Analysts said this move could be a key reason in attracting more capital into the sector to meet the capital adequacy norms under Basel-III rules. At present, all private sector banks are well above  the requirement.

The government was in favour of raising the overall cap on foreign investment to 100 per cent but the Reserve Bank of India had reservations. The central bank felt such a move might blur the distinction between foreign banks operating in India and Indian banks with 100 per cent foreign investment.



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Monday, 26 October 2015

11:45

RBI rejects plan for 100% FDI in banks

RBI rejects plan for 100% FDI in banks

The Reserve Bank of India (RBI) has turned down a proposal from the government to allow up to 100% foreign direct investment (FDI) in banks, a move that may come as a damper for several private sector lenders such as ICICI Bank and HDFC Bank.

Sources said the RBI has not provided a clear reason to turn down the proposal from the department of industrial policy and promotion (DIPP) that deals with FDI policy. But in the past the regulator has seen banking as a sensitive sector and opposed allowing significant shareholding by foreign institutional investors, who are seen as short-term investors and can enter or exit a stock for short durations, largely to book profits.

Private banks are particularly keen on a higher ceiling and investors are also hoping for a relaxation. In fact, HDFC Bank recently got permission for 74% foreign investment and was also found to be in breach of the norms for a short period.

A few years ago, in the draft norms for new banks, the RBI had suggested limiting FDI to 49%, against the 74% cap. The finance ministry, however, saw it as a retrograde step and got the regulator to stick to the prescribed ceiling. In fact, a few years before that, during UPAI's tenure, there had been a major battle between the finance ministry and the RBI on how the FDI norms should be applied, with North Block finally saying that setting the foreign investment rules was in its domain.

Currently, the government permits 74% FDI in private banks, with up to 49% allowed under the automatic route. Foreign holdings beyond 49% need to be cleared by the Foreign Investment Promotion Board (FIPB). Portfolio investment in the sector is capped at 49% and banking is one of the segments where the composite caps, which allow fungibility between FDI and FII flows, have not been applied as the government argued that it is a "sensitive sector".

The DIPP has moved the proposal to allow 100% FDI in the sector at a time when several new players are entering the market with the RBI offering payments and small bank licences. Easier rules for overseas investment were seen to have helped some of the new players.

In any case, there are sublimits on ownership by a group in a bank and even promoters are expected to cut their stake over a period of time to encourage wider public participation and reduce concentration of risk.

Source:BankingUpdates.
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Friday, 18 September 2015

07:41

100 Percentage FDI in Private Banks on Cards

100 Percentage FDI in Private Banks on Cards

NEW DELHI: To increase foreign funds inflows into the country, the government is considering to relax investment norms by increasing foreign direct investment (FDI) limit to 100 per cent for private banks from existing 74 per cent.

According to a Commerce Ministry official, the Department of Industrial Policy and Promotion (DIPP) has sent a proposal to hike the FDI limit in the private banking industry to the Finance Ministry for its views.

At present, only 74 per cent FDI is permitted in the private sector banking, of which up to 49 per cent is allowed under the automatic route and beyond that through the approval of the Foreign Investment Promotion Board (FIPB).

The move will help the existing private sector banks, payments banks and small finance banks tap overseas markets to enhance their capital base.

Earlier, the Reserve Bank of India (RBI) granted in-principle approval to 11 entities to set up payments banks and 10 for small finance banks.

The government has also introduced the concept of composite caps where it removed separate caps for FDI and foreign portfolio investments (FPI) by replacing them with single upper limit in a bid to make foreign investments easier.  But given the sensitivities in the sector, the government has said foreign institutional investors (FIIs) cannot exceed the cap prescribed for portfolio investments in private sector banks. The limit of portfolio investment in banking is capped at 49 per cent

The government is taking several steps to boost FDI and has relaxed FDI norms for sectors such as medical devices, defence and construction activities. During April-June of this fiscal, FDI into the country grew 31 per cent to $9.50 billion.

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