Page 9 - Banking Finance February 2018

BANK UPDATE

SBI, Nabard, NGOs under Centre infuses Rs.7,577 cr into 6 public sector banks
pact for JLGs The Central Government has pumped in capital of Rs.7,577 crore in various weak
public sector banks. This capital infusion is timely and
would help these banks shore up their capital adequacy
as they close the books for the December quarter, said
a banking industry observer.
The government has released Rs.2,257 crore to Bank of
India, which was recently placed under prompt correc-
tive action by the Reserve Bank of India. The other big beneficiary of the latest
capital infusion round is IDBI Bank, which has received Rs.2,729 crore, sources said.
State Bank of India and Nabard have While Central Bank of India has got capital support of Rs.323 crore, Dena Bank
signed an agreement with five NGOs has got capital support of Rs.243 crore from the government. UCO Bank, an-
in Bengal for the promotion of 2,500 other weak public sector bank, has got capital support of Rs.1,375 crore. Bank
joint liability groups (JLGs) in select of Maharashtra has received capital support of Rs.650 crore, sources said.
districts of the State.
Reacting to the government move to release capital to these six public sector
JLGs are informal groups of 4-10 mem- banks, the All India Bank Employees Association (AIBEA) General Secretary CH
bers engaged in similar economic ac- Venkatachalam expressed confidence that this capital support will help mitigate
tivities and willing to jointly undertake the immediate problems faced by these weak banks. "The government should
the responsibility to repay loans taken also look at measures other than the Insolvency and Bankruptcy Code (IBC) route
by the group from a bank. They are to enable banks to recover their dues," Venkatachalam told.
typically credit groups of small or
marginal tenant farmers who do not Fee waived for debit card payments upto 2000
have a proper title of their farmland. Customers will not have to pay any transaction charges
Through these JLGs, SBI plans to ex- for payments through debit card, BHIM app and other
tend assistance to the financially ex- payment made for up to Rs.2,000 from onwards. Last
cluded sections of the society, espe- month, Central Govenment approved a proposal that
cially landless farmers in the districts government will bear the merchant discount rate
of Purulia, Paschim Medinipur, Purba charges on transactions up to Rs2,000 to promote digital transactions.
Medinipur, Burdwan and North 24 Registration must for valuers
Parganas, said Partha Pratim
Professionals carrying out asset valuations under Companies Act and Insolvency
Sengupta, Chief General Manager,
SBI, LHO, in a press statement. The and Bankruptcy Code will have to get themselves regis-
bank hopes to be able to extend sup- tered with Insolvency Bankruptcy Board of India (IBBI)
port to close to 12,500 tenant farm- from April to conduct such activities, an official statement
ers under this arrangement. Plans said. "With effect from April 1, 2018 for conducting valu-
are also afoot to scale up the project ations required under the Companies Act, 2013 and the
in a phased manner to cover the re- Insolvency and Bankruptcy Code, 2016, a person is to be
maining districts. registered with the IBBI as a registered valuer," the ministry of corporate affairs
said in a statement. A government notification in October had delegated powers
Nabard has fixed a target of credit and functions to the IBBI under Companies Act and designated it as the authority
linking 80,000 JLGs in West Bengal in
under the Companies (Registered Valuers and Valuation) Rules, 2017.
2017-18. It has sanctioned assistance
for the promotion of 60,000 JLGs by UCO Bank to Issue Pref Shares to Govt
various NGOs in the State through Bank said its Board has approved a proposal to issue equity shares on preferen-
339 projects in different districts till tial basis to the government for capital infusion of . Rs. 1,375 crore. The govern-
date, said AK Raybarman, CGM, ment had unveiled a Rs. 2.11 lakh crore two-year road map for strengthening
Nabard West Bengal Regional Office. NPA-hit public sector banks.

BANKING FINANCE | FEBRUARY | 2018 | 9

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