New Delhi: The Union Cabinet Wednesday extended the recapitalisation scheme for “Regional Rural Banks” (RRBs) for the next three years.
“This will enable the RRBs to maintain the minimum prescribed capital to risk weighted assets ratio (CRAR) of 9 per cent,” the Cabinet said in a statement.
“A strong capital structure and minimum required level of CRAR will ensure financial stability of RRBs which will enable them to play a greater role in financial inclusion and meeting the credit requirements of rural areas.” Currently, there are 56 RRBs in the country. On provisional basis, as on March 31, 2017, the total credit given by RRBs is `2,28,599 crore.
The scheme was started in FY2010-11 and has been extended twice in 2012-13 and 2015-16. The last extension was up to March 31, 2017.
A total of `1,107.20 crore, as the Indian government’s share, out of `1,450 crore, has been released to RRBs up to March 31, 2017, the statement said.
“The remaining amount of `342.80 crore will be utilised to provide recapitalisation support to RRBs whose CRAR is below 9 per cent, during the years 2017-18, 2018-19 and 2019-20.” According to the statement, the identification of RRBs that require recapitalisation will be decided in consultation with the National Bank for Agriculture and Rural Development.
FUNDS TO BOOST EDUCATIONAL INFRASTRUCTURE: The Cabinet Committee on Economic Affairs (CCEA) Wednesday approved a proposal to expand the scope of Higher Education Financing Agency (HEFA) by expanding its capital base to `10,000 crore.
The CCEA also tasked the HEFA to mobilise `1,00,000 crore to revitalize Infrastructure and Systems in Higher Education (RISE) by 2022.
The CCEA, chaired by Prime Minister Narendra Modi, approved the proposal to expand this facility to all institutions, especially set up after 2014, Central Universities which have very little internal resources and the school education or health education infrastructure such as AIIMS and Kendriya Vidyalayas.
The CCEA has approved 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).
HEFA was set up on May 31, 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 the Central government.
According to a statement, the CCEA 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 mobilised at the least cost.
“This would enable addressing the needs of all educational institutions with differing financial capacity in an inclusive manner,” the statement said.
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 `2,016 crore have been approved by the HEFA.
EXEMPTION FOR FIJI MISSION: The Union Cabinet Wednesday approved the exemption of commercial rates for the plot of land allotted to the High Commission of Fiji in New Delhi here, an official statement said.
It also decided to extend the same terms and conditions as offered by Fiji for the land offered to the High Commission of India in Suva, Fiji.
“The Union Cabinet chaired by Prime Minister Narendra Modi has approved exemption from commercial rates for Plot No 31-B, measuring 2,800 square metres in Chanakyapuri, Diplomatic Area to the Fijian High Commission,” the statement said.
It said that Government of Fiji had offered a plot of land measuring 6,695 sq. metres at a special lease of 99-year period with a rent of FJ $100 per annum to be assessed every five years for construction of the High Commission of India in Suva in August 2015.
Fiji had proposed exchange of land on reciprocal basis.
“Given the special nature of bilateral relations with Fiji, exchange of plots on reciprocal basis by way of exemption from charging commercial rate for the plot of land allotted to High Commission of Fiji has been considered positively,” the statement said.
COMPENSATION ENHANCED: The Union government Wednesday enhanced Air India’s compensation for special flight services to ferry VIPs such as the President and the Prime Minister. According to the Cabinet Committee on Economic Affairs (CCEA), the expenditure for “Special Extra Section Flights” (SESF) operations has been enhanced to `534.38 crore plus applicable taxes for 2016-17.
“The CCEA… has given its approval to enhance the expenditure for SESF operations from `336.24 crore plus applicable taxes to `534.38 crore plus applicable taxes for 2016-17 with built-in annual escalation of 10 per cent to compensate the cost of living index and exchange fluctuation for the maintenance of B747-400 aircraft,” the CCEA said in a statement. “In view of the serious financial and liquidity position to the company, the enhancement would help to ease some of its
financial burden.”
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