Current Affairs 2017 – May

RBI asks ARCs to have a minimum net corpus of Rs100 crore by 2019

The Reserve Bank of India (RBI) has asked all the existing asset reconstruction companies (ARCs) to have a minimum net owned fund (NOF) of Rs100 crore by March 2019. This decision has been taken by RBI in accordance with its last bi-monthly monetary policy in which it had proposed to stipulate a minimum NOF of Rs100 crore taking into consideration the enhanced role and greater cash based transactions carried out by ARCs.

As per amended SARFAESI Act, 2016, ARCs cannot carry on the business of securitisation or asset reconstruction without having NOF of not less than Rs 2 crore or any other amount stipulated by the RBI. As per the notification of RBI,

the existing ARCs not meeting the minimum NOF criteria need to achieve the minimum NOF of Rs100 crore latest by 31 March 2019.

Asset Reconstruction companies (ARCs)

ARC is a company registered under Section 3 of the Securitization and reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. ARCs are regulated by the RBI. They are the specialised agencies with a main role of resolving the stressed assets issue of the Indian banking system. They are involved in buying bad loans from Indian banks to turn them around.

ARCs are similar to the asset management companies present in countries like Malaysia, Korea and several other countries. Narsimham Committee – II (1998) proposed setting up of ARCs on the similar lines with that of asset management companies present globally. The main advantage of ARCs is they help the banks to concentrate on normal banking operations rather than dealing with stressed assets

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India to give Rs 35 cr to children of freedom fighters in Bangladesh

India will give Rs. 35 crore rupees to children of freedom fighters in Bangladesh under the new ‘Muktijodha scholarship’ scheme in the next five years. Under the scheme, students at higher secondary level will get a one-time grant of Tk 20,000 (Rs 15,370) and students at the undergraduate level will get a grant of Tk 50,000 (Rs 38,430). In addition, all freedom fighters will be eligible for multiple entries on Indian visa for a period of five years. Also, every year 100 of them will be entitled to free medical treatment in Indian hospitals.

Background

Muktijodha Scholarship Scheme was initiated in 2006 to support the descendants of the 1971 Freedom Fighters. So far, more than 10,000 scholarships worth Tk150 million have been granted to the descendants under the scheme. It is India who aided Bangladesh to gain independence from Pakistan in 1971.

During Bangladesh Prime Minister Sheikh Hasina’s recent visit to India, Prime Minister Narendra Modi had announced that India will provide scholarships to another 10,000 students under the new ‘Muktijodha scholarship’. During the visit, India and Bangladesh had signed 22 agreements in various fields such as defence, nuclear cooperation, judicial sector, earth sciences, navigation, peaceful uses of outer space, to boost bilateral cooperation. India also announced concessional Line of Credit (LoC) of $4.5 billion to Bangladesh for projects in priority sectors. Moreover, India also gave LoC of $500 million to Bangladesh for defence purchases.

Bangladesh gives away ‘Friends of Bangladesh Liberation War Award’ to individuals and organizations who had extended the most crucial support for Bangladesh’s independence struggle. Former Indian Prime Minister Indira Gandhi was the first to be honoured with this award. The other prominent recipients include President Pranab Mukherjee and former Prime Minister Atal Bihari Vajpayee.

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