11-Jul-2018: India becomes EBRD’s newest shareholder
India has become the 69th shareholder of the European Bank for Reconstruction and Development (EBRD), paving the way for more joint investment with Indian companies across the EBRD’s regions.
The Indian government applied for EBRD membership in December 2017. The EBRD Board of Governors, which represents all of the existing shareholders, voted unanimously in favour of the country’s application in March 2018.
India takes a shareholding in the EBRD but it will not be a recipient of EBRD financing.
The EBRD held its inaugural business forum in Mumbai on 22 June 2018, to mark India’s membership of the Bank. The conference, co-hosted with the Federation of Indian Chambers of Commerce and Industry (FICCI) and with the support of the Export-Import Bank of India, was held under the banner of: “Mobilising private sector finance in the EBRD region and how Indian companies can benefit”.
The EBRD has long worked with top-class Indian companies on investments in the EBRD’s countries of operations, which comprise 38 economies stretching across three continents. The Bank has cooperated with Indian enterprises on joint projects worth almost €1 billion, including investments with Tata, SREI, Jindal and Mahindra and Mahindra.
The EBRD is also working closely with leading Indian organisations, such as FICCI, the Confederation of Indian Industry (CII), the Associated Chambers of Commerce & Industry of India (ASSOCHAM), and the International Solar Alliance (ISA).
22-Nov-2017: Cabinet approves India's Membership for European Bank for Reconstruction & Development
The Union Cabinet chaired by the Prime Minister Narendra Modi has approved India's Membership for European Bank for Reconstruction & Development (EBRD). Necessary steps will be initiated by the Department of Economic Affairs, Ministry of Finance to acquire the membership of the EBRD.
Impact:
- Membership of EBRD would enhance India's international profile and promote its economic interests. Access to EBRD's Countries of Operation and sector knowledge.
- India's investment opportunities would get a boost.
- It would increase the scope of cooperation between India and EBRD through co-financing opportunities in manufacturing, services, Information Technology, and Energy.
- EBRD's core operations pertain to private sector development in their countries of operation.
- The membership would help India leverage the technical assistance and sectoral knowledge of the bank for the benefit of development of private sector.
- This would contribute to an improved investment climate in the country.
- The membership of EBRD would enhance the competitive strength of the Indian firms, and provide an enhanced access to international markets in terms of business opportunities, procurement activities, consultancy assignments etc.
- This would open up new vistas for Indian professionals on the one hand, and give a fillip to Indian exports on the other.
- Increased economic activities would have the employment generating potential.
- It would also enable Indian nationals to get the employment opportunity in the Bank.
Financial Implications: The minimum initial investment towards the membership of EBRD will be approximately €1 (one) million. However, this assumption is based on India deciding to buy the minimum number of shares (100) required for obtaining the membership. If India were to buy a higher number of Bank shares, the financial implications could be higher. In-principle approval of the Cabinet at this stage is being obtained for joining the Bank.
Background: The issue relating to acquiring the membership of the "European Bank for Reconstruction & Development (EBRD)" had been under consideration of the Government. With the country's impressive economic growth over the years and enhanced international political profile, it was considered appropriate that India should expand its presence on the global developmental landscape beyond its association with the Multi-lateral Development Banks (MDBs) such as the World Bank, Asian Development Bank and African Development Bank. The decision to join the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB) was taken earlier in this backdrop.
4-Jul-2018: Cabinet approves Revitalising Infrastructure and Systems in Higher Education (RISE) by 2022
The Cabinet Committee on Economic Affairs has approved the proposal for expanding the scope of Higher Education Financing Agency (HEFA) by enhancing its capital base to Rs. 10,000 crore and tasking it to mobilise Rs. 1,00,000 crore for Revitalizing Infrastructure and Systems in Education (RISE) by 2022.
Details: In order to expand this facility to all institutions, especially to the institutions set up after 2014, Central Universities which have very little internal resources, and the school education/health education infrastructure like AIIMSs, Kendriya Vidyalayas, the CCEA has approved the following five windows for financing under HEFA and the modalities of repaying the Principal portion of the fund (interest continues to be serviced through Government grants in all these cases):
- Technical Institutions more than 10 years old: Repay the whole Principal Portion from the internally generated budgetary resources.
- Technical Institutions started between 2008 and 2014: Repay 25% of the principal portion from internal resources, and receive grant for the balance of the Principal portion.
- Central Universities started prior to 2014: Repay 10% of the principal portion from internal resources, and receive grant for the balance of the Principal portion.
- Newly established Institutions (started after 2014): for funding construction of permanent campuses: Grant would be provided for complete servicing of loan including the Principal and interest.
- Other educational institutions and grant-in-aid institutions of Ministry of Health: All the newly set up AIIMSs and other health institutions, the Kendriya Vidyalayas / Navodaya Vidyalayas would be funded and the Department/Ministry concerned will give a commitment for complete servicing of the principal and interest by ensuring adequate grants to the institution.
The Cabinet has also permitted the HEFA to mobilise Rs 1,00,000 crore over the next 4 years till 2022 to meet the infrastructure needs of these institutions. The CCEA has also approved increasing the authorized share capital of HEFA to Rs. 10,000 crore, and approved infusing additional Government equity of Rs. 5,000 crore (in addition to Rs. 1,000 crore already provided) in HEFA.
The CCEA has also approved that the modalities for raising money from the market through Government guaranteed bonds and commercial borrowings would be decided in consultation with the Department of Economic Affairs so that the funds are mobilized at the least cost. This would enable addressing the needs of all educational institutions with differing financial capacity in an inclusive manner. This would enable HEFA to leverage additional resources from the market to supplement equity, to be deployed to fund the requirements of institutions. Government guarantee would eliminate the risk factor in Bonds issue and attract investment in to this important national activity.
Background: HEFA has been set up on 31st May 2017 by the Central Government as a Non Profit, Non-Banking Financing Company (NBFC) for mobilising extra-budgetary resources for building crucial infrastructure in the higher educational institutions under Central Govt. In the existing arrangement, the entire principle portion is repaid by the institution over ten years, and the interest portion is serviced by the Government by providing additional grants to the institution. So far, funding proposals worth Rs. 2,016 crore have been approved by the HEFA.
2-Jul-2018: Vishwas Patel appointed as Chairman of Payments Council of India
Payments Council of India (PCI), an apex body representing companies in payments and settlement system, has a new Chairman in Vishwas Patel.
The Payments Council of India was formed under the aegis of IAMAI in the year 2013 catering to the needs of the digital payment industry. The Council was formed inter-alia for the purposes of representing the various regulated non-banking payment industry players, to address and help resolve various industry level issues and barriers which require discussion and action.
The council works with all its members to promote payments industry growth and to support our national goal of ‘Cash to Less Cash Society’ and ‘Growth of Financial Inclusion’ which is also the Vision Shared by the RBI and Government of India. PCI works closely with the regulators i.e. Reserve Bank of India (RBI), Finance Ministry and any similar government, departments, bodies or Institution to make ‘India a less cash society’.