Public sector SBI and PNB could be among the first banks to tap capital market this financial year to raise funds to meet global risk norms Basel III, a top finance ministry official said here today.
Financial Services Secretary G S Sandhu also said no final decision has been taken yet.
"Which banks will go first, that we have to work out. We have asked all banks to submit their capital requirement plans. They have given their proposal and we are giving final touch to them. The schedule will be worked out soon," he added.
The decision would be based on various consideration including value of shares and possibility of going up further, he said.
Yesterday, Finance Minister Arun Jaitley in the Budget speech said that "to be in line with Basel-III norms there is a requirement to infuse Rs 2,40,000 crore as equity by 2018 in our banks. To meet this huge capital requirement we need to raise additional resources to fulfill this obligation."
Also Read: Budget 2014: PSU banks to hurt, infra lenders to gain: Morgan Stanley
While preserving the public ownership, the capital of these banks will be raised by increasing the shareholding of the people in a phased manner through the sale of shares largely through retail to common citizens of this country, he had said.
"Thus, while the government will continue to have majority shareholding, the citizens of India will also get direct shareholding in these banks, which currently they hold indirectly," he had said.
Government shareholding in various banks varies between 56.26 percent to 88.63 percent. "So, we will have to devise a strategy where we figure how much dilution will take place in these banks over a five- year time-frame, because we are not going to do it in just one go which is not possible also. This will happen over a timeframe of five years," he said.
Price to book value of the shares of most of the banks are close to one, he said, adding, "We expect them to go a little higher."
Government estimates that about 50 percent of the requirement could be met from public offers. The remaining fund could be raised from other means like stake sale in non-core businesses of banks.
"Most of the insurance joint venture companies are not listed. Listing of insurance subsidiary would bring in money to the bank. In case the bank is not able to list, it can sell their stake or hive off to raise funds over a period of five years," he said.
State Bank of India (SBI) is country's largest bank and government holds 58.60 percent stake. Punjab National Bank is the second largest PSU bank, in which government holding is 58.87 percent.
The Finance Ministry is also looking at setting up of a special purpose vehicle (SPV) under which all real estate assets of a bank would be brought in. The SPV would then earn rental income and transfer it to the bank.
"Banks have a lot of real estate...SPV can raise money and that money can come in the form of equity into these banks," Sandhu said.
On providing greater autonomy, he said there are some governance issues in banks which government is looking at.
"We are looking at providing longer tenure to CMDs. We are proposing five-year tenure. Then separation of chairman and managing directors. These are proposals yet to be decided," he said.
Besides, he said, better quality of independent directorswith domain knowledge is also one of the proposals for strengthening of board.
He also said that there is a proposal to create a asset reconstruction company (ARC) where some of these banks and the power companies can join hands and can set up a company that will revive incomplete projects and hand it over back to the promoter after revival.
"Similarly for the road sector there is a proposal from the National Highways Authority of India which we have welcomed. They also want to form an asset reconstruction company for the road sector. Because a large number of road projects they are incomplete...and they have not been put to commercial use," he said.
"So with the help of ARCs these projects can be completed they can be put to commercial use and then money can start flowing back. That is another thing that we are looking at," he added.
On financial inclusion, Sandhu said every household would be given bank account with a overdraft facility of Rs 5,000 and RuPay debit card with inbuilt accident insurance cover of Rs 1 lakh.
"It would particularly focus to empower the weaker sections of the society, including women, small and marginal farmers and labourers. Two bank accounts in each household are proposed to be opened which will also be eligible for credit," he said.
The Finance Ministry is also looking at setting up of a special purpose vehicle (SPV) under which all real estate assets of a bank would be brought in. The SPV would then earn rental income and transfer it to the bank.
"Banks have a lot of real estate...SPV can raise money and that money can come in the form of equity into these banks," Sandhu said.
On providing greater autonomy, he said there are some governance issues in banks which government is looking at.
"We are looking at providing longer tenure to CMDs. We are proposing five-year tenure. Then separation of chairman and managing directors. These are proposals yet to be decided," he said.
Besides, he said, better quality of independent directorswith domain knowledge is also one of the proposals for strengthening of board.
He also said that there is a proposal to create a asset reconstruction company (ARC) where some of these banks and the power companies can join hands and can set up a company that will revive incomplete projects and hand it over back to the promoter after revival.
"Similarly for the road sector there is a proposal from the National Highways Authority of India which we have welcomed. They also want to form an asset reconstruction company for the road sector. Because a large number of road projects they are incomplete...and they have not been put to commercial use," he said.
"So with the help of ARCs these projects can be completed they can be put to commercial use and then money can start flowing back. That is another thing that we are looking at," he added.
On financial inclusion, Sandhu said every household would be given bank account with a overdraft facility of Rs 5,000 and RuPay debit card with inbuilt accident insurance cover of Rs 1 lakh.
"It would particularly focus to empower the weaker sections of the society, including women, small and marginal farmers and labourers. Two bank accounts in each household are proposed to be opened which will also be eligible for credit," he said.
Anda sedang membaca artikel tentang
SBI, PNB likely to tap capital market this year: Finmin
Dengan url
https://olahragakecantikan.blogspot.com/2014/07/sbi-pnb-likely-to-tap-capital-market.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
SBI, PNB likely to tap capital market this year: Finmin
namun jangan lupa untuk meletakkan link
SBI, PNB likely to tap capital market this year: Finmin
sebagai sumbernya
0 komentar:
Posting Komentar