The budget session of the parliament witnessed the members asking government questions related to finance. Some of these questions were related to the NPAs, rationalisation of the overseas branches of the banks, charges levied by the banks on various services, disinvestment in the PSUs, commitment charges being paid to the MDIs, and research assistance provided to the finance ministry by government-funded and private organisations. These questions were asked in Lok Sabha and Rajya Sabha between February 4-13, 2019. The compilation of questions asked in the other sessions of the parliament can be accessed here.

External Commercial Borrowings

Reserve Bank of India (RBI) has revised and rationalised the extant framework for External Commercial Borrowing (ECB) and Rupee Denominated Bonds and notified a new policy, which expands the list of eligible borrowers to include all entities eligible to receive Foreign Direct Investment (FDI). Additionally, Port Trusts, Units in SEZ, SIDBI, EXIM Bank, registered entities engaged in micro-finance activities, viz., registered not for profit companies, registered societies/trusts/cooperatives and non-government organisations can also borrow under this framework. Further, ECBs up to USD 750 million or equivalent per financial year, which otherwise are in compliance with the parameters and other terms and conditions set out in the new ECB framework, are permitted under the automatic route. (AU 1146)

Fiscal Deficit

The Revised Estimate of Fiscal Deficit for 2018-19 has been raised to 3.4% of GDP due to the implementation of income support scheme for farmers (PM-KISAN) with effect from 1st December 2018 and transitional impact of GST. (AS 92)

Commitment Charges/Non-Utilisation of Foreign Debt

In the case of the Non-Utilisation of Foreign Debt, Commitment charges are paid as per the terms and conditions mentioned in the agreement signed with the lending agencies. As per the data, in FY 2017-2018, the central government paid Rs 73.09 crores as commitment charges, whereas the states paid 91.3 crores for the same. (AU 1143)

Priority Sector Lending

In terms of Reserve Bank’s extant guidelines on Priority Sector Lending, a target of 10 per cent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposure (CEOBE), whichever is higher, has been prescribed for lending to Weaker Sections. Reserve Bank monitors the performance of banks against the stipulated priority sector targets/ sub-targets on a quarterly as well as annual basis. As reported by RBI, Scheduled Commercial Banks (SCBs) have achieved the prescribed target and the advances under Priority Sector to weaker sections stood at 10.33% for financial 2016-17 and 10.74% for the financial year 2017-18. (AU 1140)

Recapitalisation of Banks

The government announced recapitalisation of Public Sector Banks (PSBs) to the tune of Rs 2,11,000 crore in October 2017 and PSBs have since been recapitalised to the extent of Rs 1,40,858 crore till date. As per Reserve Bank of India data for domestic operations, the year-on-year credit growth rate for PSBs has increased from 2.15% as on 30.9.2017 to 9.10% as on 30.9.2018. (AU 1132)

Pradhan Mantri Mudra Yojana (PMMY)

As per data reported by Member Lending Institutions (MLIs) on the Mudra portal, over 10.82 lakh loans amounting to Rs. 14,107.06 crore has been extended by MLIs under the Pradhan Mantri Mudra Yojana (PMMY) till 25.01.2019 in Delhi, since the inception of the scheme. Of these, more than 5.61 lakh loans have been extended to women borrowers vis-à-vis 5.21 lakh loans extended to male borrowers. Rural-urban classification of the data on loans extended under PMMY is not maintained. (AU 1131)

Closure of the Overseas Branches of PSBs

As per information furnished by the PSBs, 54 overseas operations were identified for rationalisation and as of 15.1.2019, 29 overseas operations have been rationalised for cost efficiencies and synergies in overseas markets. (AU 1121)

Digital Payments: Point of Sale (PoS)

As informed by the Reserve bank of India (RBI), the volume and value of transactions carried through PoS machines during the last three financial years and current financial year are provided below:

Debit and Credit Card usage at POS
2015-2016
2016-2017
2017-2018
April 1, 2018–Nov 30, 2018
Volume (in million)
1,959.29
3,486.44
4,748.55
4042.88
Value in (billion)
3,995.88
6,582.89
9,190.35
7796.76
‘*’ Card usage at POS include: credit cards at PoS and online, Debit Cards at PoS and online (AU 1109)

 

Bank Charges

Banks charges customers for Issue of Multi City Cheque Book; Charges for Non-maintenance of Monthly Average Balance; Issue of Passbook; Account Closure Charges; Interest Certificate; Collection of cheques under Speed Clearing; Cash Deposit transactions; Cash Withdrawal Charges; Debit Card Annual Maintenance Charges; SMS Alert Charges from debit card holders; Stop Payment instruction; Signature Verification per instance; Photo Attestation Charges; ATM card/kit returned by courier due to wrong address. (AU 1045)

NPAs

Reserve Bank of India (RBI) has informed that from country-wise data on the ratio of non-performing loans to total gross loans available on the International Monetary Fund database, it is observed that the ratio for India compares adversely with those of USA, UK, China and Japan. (AU 1028)

As per RBI data on global operations, PSBs wrote-off Rs. 57,585 crore, Rs. 81,683 crore, Rs. 1,28,229 crore during FYs 2015-16, 2016-17, and 2017-18 respectively. (AU 974)

Reserve Bank of India (RBI) has recently permitted a one-time restructuring of existing loans to Micro, Small and Medium Enterprises (MSMEs) that are in default but are ‘standard’ as on January 01, 2019 without a downgrade in the asset classification. The scheme is available to MSMEs subject to certain conditions which, inter alia, include a cap of Rs.250 million on the aggregate exposure of banks and Non-Banking Financial Companies (NBFCs) to the MSME etc. Banks / NBFCs can adopt this scheme through a policy in this regard approved by their Boards. (AU 921)

NPAs referred to National Company Law Tribunal (NCLT)

As per data published by the Insolvency and Bankruptcy Board of India, a total of 1,484 number of cases had been admitted for resolution under IBC as on 31.12.2018. Of these, 562 cases were filed by Financial Creditors (FCs), out of which 78 cases have been resolved till 31.12.2018 and an amount of Rs. 65,796 crore realised by FCs against admitted claim amount of Rs. 1,36,128 crore. (AU 187)

Writing Off of Loans

As per RBI data on global operations, PSBswrote-off Rs. 34,409 crore, Rs. 49,018 crore, Rs. 57,585 crore, Rs. 81,683 crore and Rs. 1,28,229 crore during FYs 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18 respectively. State Bank of India (SBI) and its subsidiary banks wrote-off Rs. 14,670 crore, Rs. 23,973 crore, Rs. 19,944 crore and Rs. 27,574 crore during FYs 2013-14, 2014-15, 2015-16, and 2016-17 respectively. Further, subsequent to the merger of its subsidiary banks with SBI with effect from 1.4.2017, SBI wrote off an amount of Rs. 39,151 during FY 2017-18. (AU 191)

Bank Frauds

According to the RBI data, as per year of reporting by banks in respect of the number of frauds involving an amount of Rs. 1 lakh and above, Schedule Commercial Banks reported 4,693, 5,076 and 5,917 cases of frauds during the financial years 2015-16, 2016-17 and 2017-18 respectively. (AU 973)

Demonetisation

The trend of funds remitted by resident Indian individuals under Liberalised Remittance Scheme for ‘Investments’ does not reflect any extra-ordinary jump demonetisation.

(All figures in USD Million)

Purpose
2015-16
2016-17
2017-18
2018-19 (up to Dec 2018)
Deposit
109.88
283.8
414.94
292.44
Purchase of Immovable Property
90.81
92.92
89.61
64.62
Investment (includes the acquisition of shares etc. and overseas direct investment by Resident Individuals)
317.88
443.63
441.8
297.07
(Source: RBI) (AS 105)

Construction of Amaravathi Capital City

The Central Government has released Central Assistance of Rs.2500 crore for construction of capital city under Section (6) and Section 94 (3&4) of the AP Re-organisation Act, 2014 to the Successor State of Andhra Pradesh. Of which, Rs.1500 crore has been released by the Ministry of Finance and Rs.1000 crore has been released by Ministry of Housing and Urban Affairs. (AU 960)

Disinvestment

The list of PSUs buying Government stakes in other State-owned entities, including the quantum of stakes bought and corresponding State-owned entities, since 2014:

  • Oil & Natural Gas Corporation (ONGC) acquired 51.11 per cent paid-up equity of Government of India held in Hindustan Petroleum Corporation Ltd. (HPCL) at a consideration of Rs. 36,915 crore in January 2018. In ONGC-HPCL off-market deal, ONGC resorted to borrowings to complete such transaction.ONGC financed Rs. 24,881 crore through market borrowings while the balance Rs. 12,034 crore was met through internal accruals.
  • NBCC (India) Ltd. has bought the 100% stake of Government of India holding in HSCC Ltd. during November 2018 for Rs. 285 crore. (AU 961)

Outstanding Taxes by Corporate Sector

The total outstanding amount of various taxes payable to the exchequer, including the corporate sector, for the last four years, is as under.

Payable Taxes (Rs. in crore)

Financial Year Indirect Taxes Direct Taxes
2015-16 1,88,368 5,47,953
2016-17 2,28,530 6,27,389
2017-18 2,37,651 6,25,750
2018-19 (up to December) 2,59,023 8,07,137

The government also revealed that no centralised data regarding evasion related to Corporate Sector is maintained separately. (AU 980)

Private Consultants in Policy Making

Vidhi Centre for Legal Policy was hired for IBC 2016, FRDI Bill, 2016, Report of Committee to Draft Code on Resolution of Financial Firms, Report of the Bankruptcy Law Reforms Committee-Vol. I and II, Report of the Committee to recommend measures for curbing mis-selling, rationalising distribution incentives in financial products, Interim Report of the Bankruptcy Law Reform Committee and Research Report on Professional Tax, Inter-State Council and Central Control of State Debt (14th FC) The details and payments are mentioned here. (AU 953)

AIIB’s investments in India

The details of the funds allocated by the Asian Infrastructure Investment Bank (AIIB) to India to invest in domestic projects relating to roads, housing and urban development are as under:-

 

Sl.

No.

Name of Project Loan Amount (in Million USD) Tenor (Repayment Period) Interest Rate Disbursements till 31.01.2019 (in million USD)
1 Gujarat Rural Road Development Phase – 1 329 13 years including a grace period of 5 years 0.9% + 6M LIBOR 164.555
2 Madhya Pradesh Rural Connectivity Project (Co-financed with WB) 140 25 years including a grace period of 5 years 1.3% + 6M LIBOR 23.031

*6M LIBOR stands for 6 Months London Inter-Bank Offer Rate. (AU 193)

 

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