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Thursday, June 22, 2017

All government schemes to have sunset clause: Finance Ministry

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NEW DELHI: All government schemes should have a sunset clause and must be co-terminus with the tenure of Finance Commission, which is constituted every five years, the Finance Ministry said today.

In a communication to various departments and ministries, it said the Five Year Plan era ends with the 12th Plan this month and hence all the schemes should also revisited to improve the quality of government expenditure.

Every scheme should have a sun-set date and an outcome review, it said, adding that “for aligning the schemes with financial resources cycle of centre and and state governments, these will be co-terminus with the Finance Commission cycles, the first such be the remaining 14th Finance Commission period ending March 2020”.

All ministries and departments, it said, should submit their schemes for appraisal by the Finance Ministry by this month-end so that they can continue beyond the 12th Plan period “in a smooth, rationalised and effective manner”.

The circular said that the approval for continuation of a current scheme may be sought if the review is positive and its objectives have been achieved effectively.

“It may be ensured that in all such schemes which are proposed for continuation, there should be no scheme where the competent authority had specifically decided to terminate it at the end of 12th Five Year Plan,” the ministry said.

In 2014, Prime Minister Narendra Modi had abolished the Planning Commission and replaced it with a think-tank Niti Aayog.

ESAF Microfinance to raise Rs 650 crore before small finance bank launch

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KOLKATA: ESAF Microfinance, which will be kicking off its small finance bank journey in a fortnight, is looking to ramp up capital ahead of the transition.

The Thrissur-based company is in talks with investors such as insurance companies and mutual funds to raise Rs 500 crore in non-convertible debentures, along with another Rs 150 crore in commercial papers.

ESAF Chairman K Paul Thomas said the company expects to close the issues by the end of this week. The lender has already mobilized Rs 180 crore in commercial papers last week.

“If we can ramp up capital before the conversion, we can focus on scale and retail liability franchise development in small finance bank from the beginning,” Thomas told .

ESAF will officially launch small finance bank operation on March 17 after a week’s of trail run starting from March 10.

The lender from Kerala, a state on India’s Malabar Coast with a vast non-residents population sending remittances and dollar deposits in local banks, plans to offer “a little higher” interest rates compared to mainstream banks to attract depositors.

Chennai-based Equitas Small Finance Bank offers 6% on savings deposits while Suryoday Small Finance Bank, which operates in Maharashtra, offers 6.25% on savings deposits up to Rs 1 lakh.

Thomas said ESAF would start as a full service bank with 15 branches and digital facilities such as internet banking and mobile banking. It would like to have 85 branches by September.

“We will also start lending to agriculture, housing and MSME sectors,” Thomas said. The lender has an outstanding micro-loan portfolio of Rs 2500 crore. It lends at 22.9% a year.

Reserve Bank of India offered preliminary licences to 10 entities and the list includes Janalakshmi Financial Services, Disha Microfin, RGVN Microfinance (North East) and Au Financiers (India).

ESAF is the sixth to commence small finance bank after Capital Small Finance Bank, Equitas, Utkarsh, Suryoday and Ujjivan.

It is promoted by ESAF Swasraya Multi State Cooperative Agro Society with 50.34% stake and has Rs 360 crore networth. Dia Vikas Capital, a subsidiary of Opportunity International Australia, holds 19.97% with Small Industries Development Bank of India’s 12.86% interest

Finance Ministry to finalise capital infusion of Rs 8K-cr within 15 days

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NEW DELHI: The Finance Ministry is giving final touches to infusing around Rs 8,000 crore in public sector banks (PSBs) as part of its second and final tranche for the current fiscal, 2015-16.

The second round of capital infusion is almost ready and in the next few days it should go to Finance Minister Arun Jaitley for approval, sources said.

The entire process should be over within a fortnight and then the respective bank would start receiving funds, sources added.

The second round of funding would be based on the strict parameters, sources said, adding that few banks would be eligible, and include those whose common equity Tier 1 (CET1) capital is lower than 8 per cent.

Some of the banks eligible for fund infusion include IDBI BankBSE -2.57 %, Indian Overseas BankBSE -0.92 % and UCO BankBSE 0.54 % where CET1 has been less than 8 per cent at the end of the third quarter of the current fiscal.

The government has already announced fund infusion of Rs 22,915 crore, out of the Rs 25,000 crore earmarked for 13 PSBs for the current fiscal. Of this, 75 per cent has already been released to them.

The first tranche was announced in July with the objective of enhancing their lending operations and enabling them to raise more money from the market.

Under Indradhanush roadmap announced last year, the government will infuse Rs 70,000 crore in state banks over four years while they will have to raise further Rs 1.1 lakh crore from the markets to meet their capital requirement in line with global risk norms Basel-III.

In line with the blueprint, PSBs are to get Rs 25,000 crore in each fiscal, 2015-16 and 2016-17. Besides, Rs 10,000 crore each would be infused in 2017-18 and 2018-19.

In the Budget 2017-18 speech on February 1, Jaitley announced capital infusion of Rs 10,000 crore for the next fiscal beginning April 1.

Piramal Enterprises to demerge healthcare, financial services

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The Ajay Piramal-led Piramal Enterprises
will demerge its healthcare and financial services businesses soon, a top company official said.

“We want to ultimately look at Piramal Enterprises as separate business for pharmaceuticals and financial services.

In the medium term we will do that. All our acquisitions, and in some ways moving up in value chains and getting more critical mass are steps towards that,” Piramal Enterprises Chairman Ajay Piramal told reporters here.

Declining to give a time-line, Piramal said “we have not yet fixed time line. I think the Board will decide, but the direction is moving towards that.” Ajay Piramal curtailed his presence in healthcare after he sold erstwhile Piramal Healthcare’s domestic formulations division for USD 3.7 billion to Abbott in 2010.

The company entered into the finance business through strategic investments and joint ventures.

Piramal Enterprises is growing largely organically with a CAGR of 17 percent over last the five years.

To boost its product portfolio, Piramal Enterprises today announced acquisition of portfolio of a drugs for spasticity and pain management from UK-based Mallinckrodt for USD 171 million (around Rs 1,160 crore) in an all-cash deal.

“We continue to invest in the growth of our pharmaceutical businesses. This would be our seventh pharma acquisition in the last two years, taking our investment for inorganic growth to Rs 3,000 crore across our pharmaceutical businesses to boost future growth,” Piramal said.

“All these acquisitions are expected to be value accretive and will improve our pharmaceutical segment’s growth. High EBITDA margins of the acquired products are expected to enhance our profitability.”

The company’s UK-based wholly-owned subsidiary Piramal Critical Care has entered into an agreement with Mallinckrodt for acquiring the drugs and may also pay an additional USD 32 million, depending on financial performance of the acquired assets over the next three years till FY21.

The acquired portfolio includes Gablofen (baclofen), a severe spasticity management product, currently marketed in the US, and two pain management products.

Commenting on synergies from the acquisition, Piramal said “Gablofen used by doctors and hospitals leverage our US operations and capabilities.

“With this acquisition, we have entered into an attractive niche market. Intrathecal baclofen serves an important medical need to severe spasticity patients. Access to this niche market diversifies our offerings in the US market and allows further growth within the global generic hospital drug market of more than USD 20 billion in size.

The company’s 35-40 percent revenues comes from the US operations, he said, adding it had 24 US FDA inspections, but had no issues with that in last few years.

GRUH Finance Ltd. – Profit After Tax for the Year Amounted to Rs. 186.20 Crores as Compared to Rs. 155.76 Crores for the Previous Year, an Increase of 20%

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AHMEDABAD, India, January , 2017

Financial Results for Nine Months Ended December 31, 2016

The Board of Directors of GRUH Finance Ltd. (GRUH) – a subsidiary of HDFC Ltd. – has approved the accounts for the quarter ended December 31, 2016 at their meeting held in Ahmedabad on January 13, 2017.

FINANCIAL RESULTS

Profit after tax for the year amounted to Rs. 186.20 crores as compared to Rs. 155.76 crores for the previous year, an increase of 20%.

Loan Portfolio

The loan portfolio as at December 31, 2016 amounted to Rs. 12534.01 crores as against Rs. 10519.36 crores in the previous year – an increase of 19%.

LENDING OPERATIONS

Loan Disbursements

Loan disbursements during the period were Rs. 2870.09 crores as against Rs. 2773.91 crores in the previous period indicating a growth of 3%.

Cumulative loan disbursements as of December 31, 2016 were Rs. 21941.79 crores.

Non-Performing Loans

The aggregate NPAs of the company at Rs. 68.17 crore are 0.54% of the Loan Assets, without taking into account relaxation given by NHB vide circular # NHB(ND)/DRS/Policy Circular No. 77/2016-17 dated November 21, 2016 as against 0.62% of the Loan Assets as on December 31, 2015.

GRUH is required to carry a provision of Rs. 15.63 crore on its Gross NPA portfolio of Rs. 68.17 crore as on December 31, 2016 and Rs. 59.04 crores towards standard assets i.e. a total provision of Rs. 74.67 crore.

However, as a prudent measure, GRUH has made more than the required provision in its books. The total provision carried in the books including the provision for standard assets is Rs. 127.22 crore. As a result, the Net NPA as at December 31, 2016 stands at Rs. NIL indicating Net NPA to loans of NIL.

DEPOSITS

GRUH’s deposit portfolio has increased to Rs. 1503.29 crores, up from Rs. 1389.38 crores last year. GRUH’s Fixed Deposit programme has been rated “FAAA” by CRISIL and “MAAA” by ICRA. The rating of “FAAA” and “MAAA” indicates ‘Highest Safety” as regards repayment of interest and principal. GRUH’s Commercial Paper (CP) is rated at “A1(+)” by ICRA and CRISIL and Non Convertible Debenture (NCD) is rated at “AAA” by ICRA and CRISIL.

RETAIL NETWORK

GRUH has a network of 183 retail offices across 10 states of the country. GRUH has 48 offices in Gujarat, 50 offices in Maharashtra, 17 offices in Karnataka, 29 offices in Madhya Pradesh, 12 offices in Rajasthan, 12 offices in Chhatisgarh, 10 offices in Tamil Nadu, 3 in Uttar Pradesh and one office each in Bihar and Jharkhand. For more information, visit: www.gruh.com

Highlights of Operational Performance

(Rs. in crore)

    
                             December 31,    December 31,
    Detail                       2016            2015      Growth (%)
    Net Interest Margin         375.14          303.90         23
    Non Interest Expenses        65.50          60.22          9
    Operating Profit            333.08          271.48         23
    Profit Before Tax           282.04          236.92         19
    Profit After Tax            186.20          155.76         20
    Outstanding loan
    Portfolio                  12534.01        10519.36        19
Verification: 55a190b0664d6f07