The Union Cabinet on Thursday approved a capital infusion package of Rs 12,517 crore that would help improve liquidity and maintain capital adequacy ratios of about 10 public sector banks.
It also gave an in-principle approval to provide need-based additional capital infusion to public sector lenders for a five-year period from 2013-14 to 2018-19. This would ensure that banks can easily go in for re-capitalisation to comply with the phased implementation of Basel III norms from April 1, 2013, to March 2018.
“Pursuant to the Budget announcement made by the finance minister in March 2012, we are infusing additional capital into the public sector banks. It will be done before the end of this fiscal,” finance minister P Chidambaram said after the Cabinet meeting, adding that about 10 banks would be benefited from the move.
The RBI had recently given banks a three-month extension to comply with the Basel III norms from the earlier deadline of January 1, 2013. The government infused about Rs 20,117 crore in public sector banks during 2010-11, and Rs 12,000 crore in 2011-12.
Meanwhile, the Cabinet also relaxed the eligibility criteria for the presiding officer of the Securities Appellate Tribunal by approving amendments to Section 15M of the SEBI Act, 1992. 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, which has been lying vacant since November 2011.
... clears 10% stake sale in EIL; aims to raise Rs 800 cr
The government on Thursday decided to go ahead with stake sale in yet another public sector enterprise as it tries to meet a target of Rs 30,000 crore from disinvestment proceeds. The Cabinet Committee on Economic Affairs approved 10 per cent disinvestment in state-owned Engineers India Ltd (EIL).
“We expect to garner about Rs 800 crore at current prices,” finance minister P Chidambaram said adding that the disinvestment is likely to take place this fiscal through a further public offering (FPO).
The offer for sale (OFS) or auction route would not be available for disinvestment in EIL as the company is compliant with Sebi’s public holding norms. Besides, it is not in top 100 companies in terms of market capitalisation, Chidambaram said.
Post disinvestment, the government’s stake in the public sector unit will go down to 70.40 per cent. In 2010, it had sold 10 per cent stake in the firm. The