SEPTEMBER 2018 (1-15)

S&P BSE Private Banks Index: Asia Index Pvt Ltd launches index to measure the performance of private banks

Asia Index Pvt Ltd has launched S&P BSE Private Banks Index to measure the performance of private banks. Asia Index Pvt Ltd is a joint venture between S&P Dow Jones Indices and BSE Ltd. This index is designed to provide market participants with transparent and rules-based benchmark that measures performance of private banks listed in India. It draws from constituents of S&P BSE Finance Index. Only common stocks classified as banks by BSE Sector Classification model and that are not classified under BSE scrip category as Public Sector Undertaking (PSU) are eligible for this index. The index will be calculated in Indian Rupees and US Dollar in real-time by BSE, Asia’s oldest exchange.

Debts Recovery Tribunals
The central government has raised the pecuniary limit from Rs 10 lakh to Rs 20 lakh for filing application for recovery of debts in the Debts Recovery Tribunals by such banks and financial institutions.
Implications: The move is aimed at helping reduce pendency of cases in the 39 DRTs in the country. As a result, no bank or financial institution or a consortium of banks or financial institutions can approach the DRTs if the amount due is less than Rs 20 lakh.
What are DRTs? Debt Recovery Tribunals were established to facilitate the debt recovery involving banks and other financial institutions with their customers. DRTs were set up after the passing of Recovery of Debts due to Banks and Financial Institutions Act (RDBBFI), 1993. Section 3 of the RDDBFI Act empowers the Central government to establish DRTs. Appeals against orders passed by DRTs lie before Debts Recovery Appellate Tribunal (DRAT).
Powers and functions: The Debts Recovery Tribunal (DRT) enforces provisions of the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993 and also Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002. The Debts Recovery Tribunal (DRT) are fully empowered to pass comprehensive orders and can travel beyond the Civil procedure Code to render complete justice. A Debts Recovery Tribunal (DRT) can hear cross suits, counter claims and allow set offs. However, a Debts Recovery Tribunal (DRT) cannot hear claims of damages or deficiency of services or breach of contract or criminal negligence on the part of the lenders. In addition, a Debts Recovery Tribunal (DRT) cannot express an opinion beyond its domain, or the list pending before it. The Debts Recovery Tribunal can appoint Receivers, Commissioners, pass ex-parte orders, ad-interim orders, interim orders apart from powers to Review its own decisions and hear appeals against orders passed by the Recovery Officers of the Tribunal. A DRT is presided over by a presiding officer who is appointed by the central govt. and who shall be qualified to be a District Judge; with tenure of 5 years or the age of 62, whichever is earlier. No court in the country other than the SC and the HCs and that too, only under articles 226 and 227 of the Constitution have jurisdiction over this matter.

Singapore’s Temasek to invest in NIIF’s Master Fund
Singapore’s Temasek has agreed to invest as much as $400 million in the National Investment and Infrastructure Fund (NIIF), a fund set up by the government of India to boost infrastructure financing in the country. With this, Temasek joins government of India, Abu Dhabi Investment Authority (ADIA), HDFC Group, ICICI Bank Ltd, Kotak Mahindra Life Insurance and Axis Bank Ltd as investors in NIIF’s Master Fund.
NIIF: The government had set up the ₹40,000 crore NIIF in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled infrastructure projects. The Indian government is investing 49% and the rest of the corpus is to be raised from third-party investors such as sovereign wealth funds, insurance and pension funds, endowments, etc. NIIF’s mandate includes investing in areas such as energy, transportation, housing, water, waste management and other infrastructure-related sectors in India. NIIF currently manages three funds each with its distinctive investment mandate. The funds are registered as Alternative Investment Fund (AIF) with the Securities and Exchange Board of India (SEBI).
The three funds are:
Master Fund: The Master Fund is an infrastructure fund with the objective of primarily investing in operating assets in the core infrastructure sectors such as roads, ports, airports, power etc.
Fund of Funds: Fund of Funds anchor and/or invest in funds managed by fund managers who have good track records in infrastructure and associated sectors in India. Some of the sectors of focus include Green Infrastructure, Mid-Income & Affordable Housing, Infrastructure services and allied sectors.
Strategic Investment Fund: Strategic Investment Fund is registered as an Alternative Investment Fund II under SEBI in India.

“Dairy Processing & Infrastructure Development Fund”
The government has handed over a Rs 440 crore cheque to the NDDB from the Dairy Processing and Infrastructure Development Fund (DIDF), marking the formal launch of the fund set up to provide soft loans to modernise and raise capacity of dairy cooperatives. NABARD has set up the DIDF with a corpus of Rs 8,004 crore to bring more dairy farmers into organised milk marketing through cooperatives. The fund is implemented through National Dairy Development Board (NDDB) and National Cooperative Development Corporation(NCDC).
The major activities of DIDF: The project will focus on building an efficient milk procurement system by setting up of chilling infrastructure & installation of electronic milk adulteration testing equipment, creation/modernization/expansion of processing infrastructure and manufacturing faculties for Value Added Products for the Milk Unions/ Milk Producer Companies.
Management of DIDF: The project will be implemented by National Dairy Development Board (NDDB) and National Dairy Development Cooperation (NCDC) directly through the End Borrowers such as Milk Unions, State Dairy Federations, Multi-state Milk Cooperatives, Milk Producer Companies and NDDB subsidiaries meeting the eligibility criteria under the project. An Implementation and Monitoring Cell (IMC) located at NDDB, Anand, will manage the implementation and monitoring of day-to-day project activities. The end borrowers will get the loan @ 6.5% per annum. The period of repayment will be 10 years with initial two years moratorium. The respective State Government will be the guarantor of loan repayment. Also for the project sanctioned if the end user is not able to contribute its share; State Government will contribute the same.