Govt. to Announce Recapitalisation of Public Sector Banks
- Central Government is likely to announce the first tranche of the Rs 25,000 crore capital infusions for Public Sector Banks (PSBs), planned for this financial year (2016-17). The first tranches could add up to about Rs.10,000 crore.
- The recapitalisation is aimed at shoring up the PSBs lending capacities that are restricted by poor asset quality and weak capitalisation.
- Gross bad loans, as a proportion of the total advances by these banks, rose to 7.6 per cent, a 12-year high in March 2016, according to the Reserve Bank of India’s latest financial stability report released on June 28.
- On the rise since 2012, impaired assets in the banking system are negatively affecting credit supply and are a factor dampening India’s growth outlook. The capitalisation plan proposes infusions adding up to Rs 25,000 crore in 2015-16 as well as in 2016-17, followed by Rs 10,000 crore each in 2017-18 and 2018-19.
- SBI got the largest sum, Rs 5,393 crore, followed by Bank of India, which received Rs 2,455 crore. PSBs account for about 70 per cent of the total banking system assets.
- The banks requisitioned infusions after the finalisation of their fourth quarter results, in which, cumulatively, they had reported losses of Rs 18,000 crore in 2015-16.
India Signs five Agreements with Tanzania
- Seeking to enhance its ties with resource-rich Tanzania, India extended its full support to the country to meet its development needs and signed five agreements, including one for providing a Line of Credit of $92 million in the water resources sector.
- Describing India as a trusted partner in meeting Tanzania’s development priorities, Mr. Modi said he along with President John Pombe Joseph Magufuli “agreed to deepen overall defence and security partnership, especially in the maritime domain.”
- “Our in-depth discussions on regional and global issues reflected our considerable convergence on issues of common interest and concern,” he said at a joint press interaction after his bilateral meeting with President Magufuli.
- The two leaders agreed to work closely, bilaterally, regionally and globally to combat the twin threats of terrorism and climate change.
- In a joint statement, the two leaders expressed their strong condemnation of terrorism in all its forms and manifestations and stated that there could be no justification for terrorism whatsoever. They expressed satisfaction on the holding of bilateral counter-terrorism consultations in early 2016.
- The two sides signed an agreement under which India would provide a Line of Credit of $ 92 million for rehabilitation and improvement of Zanzibar’s water supply system.
- Other agreements signed included a MoU on water resource management and development, a MoU for establishment of vocational training centre at Zanzibar, an MoU on visa waiver for diplomatic/official passport holders and an agreement between the National Small Industries Corporation of India and the Small Industries Development Organisation, Tanzania.
- The Prime Minister said the two countries were also working on a number of other water projects for 17 cities in Tanzania.
India Pushes Talks with Russia for 5th-Generation Fighters and ‘Super Sukhois
- India has decided to forward the negotiations with Russia on stalled mega projects to jointly develop a futuristic fifth-generation fighter aircraft (FGFA) as well as upgrade its existing Sukhoi- 30MKI jets into ‘Super Sukhois’ with advanced avionics and weapons.
- Even after India and France are close to inking the estimated 7.8 billion euro deal for 36 Rafale jets, the defence ministry acknowledges that just 36 fighters will not be enough to stem the country’s hemorrhaging air combat power.
- The IAF is down to just 33 fighter squadrons — including 11 obsolete MiG-21 and MiG-27 squadrons slated for retirement — when at least 42 are required to keep the “collusive China-Pakistan threat” at bay.
- The “multi-pronged strategy” to progressively crank up airpower ranges from inducting the indigenous Tejas light combat aircraft to exploring a second line of fighter production in the country, with the American F/A-18 and F-16 as well as Swedish Gripen-E already in contention for this proposed ‘Make in India’ project.
- Apart from these 4th-generation fighters, the defence ministry is now finally working towards inking the final R&D design contract with Russia this year for the Indian “perspective multi-role fighter”, a variant of the Russian single-seat FGFA called Sukhoi T-50 or PAK-FA.