Monday , July 16 2018

Finance Ministry asks Banks to Withdraw Non-Core Banking Businesses

The Finance Ministry directed state-owned banks to dispose of their non-core assets in time.

jaitley7592

This was a suggestion, by Finance Ministry, as part of capital raising exercise for the state-owned banks. The banks are asked to move forward on the idea based on discussions at the two-day Gyan Sangam summit that was held on March 6, 2017.  The Gyan Sangam was a forum where the top most officials from the state-owned banks assembled together in presence of the government and the Reserve Bank of India, to discuss the issues faced by the Banks.
Most banks said to have started the process. This step is indeed appreciated by the banks as it would help them raise the much-needed capital for growth.

Many PSBs take care of insurance ventures or capital advisory firms, in addition to managing stakes in financial institutions such as stock exchanges. Even, the State Bank of India is a stakeholder in various companies including National Stock Exchange, UTI, ARCIL etc.

SBI has stated its decision to dilute its stake in its subsidiaries like life insurance firm.
The Decision-making board of IDBI Bank also agreed to exit some of its non-core business assets to raise its capital base. It has accepted in principle the proposal to dissociate its non-core businesses subject to compliance with all applicable laws and regulations.

IDBI Bank’s disinvestment exercise, include to bring down its stake in companies such as IDBI Federal Life Insurance IDBI Capital Market Services, IDBI Intech, IDBI Asset Management Company, National Stock Exchange, National Securities Depository, and NSDL E-Governance Infrastructure.
Finance ministry estimates predict that the PSBs are in need of Rs 1.8 lakh crore in additional capital over a period of four years ending March 2019.  Out of the total, they are expected to raise Rs 1.1 lakh crore from the market and through the sale of non-core assets.

Facebook Comments
Rate this post

About Sirisha Rani

Check Also

Saptagiri

Sapthagiri LLB Movie Review

Saptagiri LLB is a remake of director Subhash Kapoor’s Bollywood hit Jolly LLB. Sapthagiri, a ...