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GOVT TO INFUSE RS 7,577 CRORE INTO SIX WEAK PUBLIC SECTOR BANKS
Decks are being cleared for capital infusion of Rs 7,577 crore into six weak public
sector banks (PSBs) — which are reeling under huge bad loans — as part of the
government’s recapitalisation plan to clean their balance sheets. The boards of three
banks on Wednesday approved the recapitalisation plan.
The recapitalisation is under the Indradhanush plan of the government which
promised Rs 70,000 crore over period of four years ending March 2019.
While the government decides the mode for recapitalisation of all state-run banks, it
advanced the release of funds to these six banks to help them meet their equity
requirements and enable them to resume normal business and help them come out
of prompt corrective action (PCA) of the Reserve Bank of India.
The RBI initiates PCA when a bank falls short of certain regulatory requirements
such as minimum capital, returns on asset and size of non-performing assets.
In April, the RBI said that capital, asset quality and profitability would be the basis
for the PCA framework on which the banks would be monitored and has defined
three kinds of risk thresholds.
The PCA framework would apply without exception to all banks operating in India,
including small banks and foreign banks operating through branches or subsidiaries
based on breach of risk thresholds of identified indicators.
The RBI can ask the banks to prepare a time-bound plan and commitment for
reduction of NPAs, restrict or reduce credit expansion for borrowers below certain
rating grades or unrated borrowers, unsecured exposures, loan, concentration of
loans in identified sectors or borrowers.
In October 2017, finance minister Arun Jaitley had announced an unprecedented Rs
2.11 lakh crore two-year recap plan to strengthen the PSU banks which reeling under
high non-performing assets (NPAs). The plan includes floating recapitalisation
bonds of Rs 1.35 lakh crore and raising Rs 58,000 crore from the market by diluting
government’s stake.
Relevance : Prelims, GS 3
Monsoon Mission
If the variations in monsoon rainfall are known well in advance, it would be possible
to reduce the adverse impacts related to excess or deficient rainfall, providing us
prior information about droughts and floods.
Ministry of Earth Sciences (MoES) has launched 'National Monsoon Mission' (NMM)
with a vision to develop a state-of-the-art dynamical prediction system for monsoon
rainfall on different time scales.
MoES has bestowed the responsibility of execution and coordination of this mission
to the Indian Institute of Tropical Meteorology (IITM), Pune.
For this national mission, IITM is collaborating with NCEP (USA), MoES
organisations and various academic institutions/organizations under NMM.
PMEGP
Ministry of Micro, Small and Medium Enterprises (MSME) is implementing Prime
Minister’s Employment Generation Programme (PMEGP), which is a major credit-
linked subsidy programme, aimed at generating self-employment opportunities
through establishment of micro-enterprises in the non-farm sector by helping
traditional artisans and unemployed youth.
Any individual above 18 years of age is eligible. For setting up of projects costing
above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business
/service sector, the beneficiaries should possess at least VIII standard pass
educational qualification.
The maximum cost of projects is Rs. 25 lakh in the manufacturing sector and Rs. 10
lakh in the service sector.
Benefit can be availed under PMEGP for setting up of new units only.
The PMEGP Scheme was launched during 2008-09.