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Reconstruction scheme will protect jobs for a year; six-member board set up
Long wait: Customers waiting to withdraw money from a Yes Bank branch in Thane on Friday. Vibhav BirwatkarVibhav Birwatkar
The Reserve Bank of India (RBI) on Friday announced a draft reconstruction scheme for the beleaguered Yes Bank, aimed at protecting depositors’ funds while bringing in the State Bank of India as an investor. For employees of the bank, service conditions, including remuneration, will remain the same, at least for one year. This does not, however, include key managerial personnel, on whom the board can take a call.
According to the draft plan, the authorised capital for the reconstructed bank will be ₹5,000 crore, with 2,400 crore equity shares of ₹2 each, aggregating to ₹4,800 crore.
The SBI, which had earlier said its board was exploring an investment in Yes Bank, will pick up a 49% stake, according to the scheme. The deal would be at a price not less than ₹10 per share with a face value of ₹2. The SBI cannot reduce its holding below 26% before completion of three years from the date of infusion of the capital, the RBI said. To pick up a 49% stake, the SBI will have to invest ₹2,450 crore, sources said.
On Thursday, the government had put a moratorium on Yes Bank till April 3 following its deteriorating financial condition, and the banking regulator superseding the board and appointed an administrator.
The new board will have at least six members, an MD & CEO, a non-executive chairman and two non-executive directors, while the remaining two nominee directors would be appointed by the SBI. “The members of the board so appointed shall continue for a period of one year, or until an alternate board is constituted by Yes Bank Ltd., whichever is later,” the RBI said.
The Central bank said all the deposits and liabilities of the bank would continue in the same manner in the reconstructed bank, unaffected by the scheme. “All the deposits with and liabilities of the reconstructed bank, except as provided in the scheme, and the rights, liabilities and obligations of its creditors, will continue in the same manner and with the same terms and conditions, completely unaffected by the scheme,” it said.
However, additional tier 1 capital, which was issued by Yes Bank under the Basel III framework, “shall stand written down permanently, in full, with effect from the appointed date,” according to the scheme.
Reiterates ruling under Section 24 (2) of 2013 law
The court said landowners cannot say the proceedings have lapsed.
A Constitution Bench of the Supreme Court on Friday held that land acquisition proceedings under the 1894 Act will not be deemed to have lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, if the authorities have tendered the compensation by deposit in the Treasury.
A five-judge Bench, led by Justice Arun Mishra, held that landowners, who had refused to accept compensation or who sought reference for higher compensation, cannot claim that the acquisition proceedings had lapsed under Section 24(2) of the 2013 Act.
With this, the Constitution Bench has affirmed the February 2018 ruling on Section 24 by a three-judge Bench, led by Justice Mishra himself, in the Indore Development Authority case. The Bench has overruled an earlier co-ordinate Bench ruling in the Pune Municipal Corporation case of 2014.
In maiden budget, MVA government unveils steps to boost employment, promote sports
The Maha Vikas Aghadi (MVA) government in its maiden budget on Friday announced a new ₹450-crore Chief Minister’s Water Conservation Scheme to replace the previous chief Minister Devendra Fadnavis’s pet project, Jalyukt Shivar Abhiyan.
The new scheme aims to rejuvenate 8,000 water conservation projects, create decentralised water reservoirs, increase ground water level and protect irrigation capacity.
While presenting the State budget for 2020-21, Finance Minister Ajit Pawar announced several new schemes to boost infrastructure, employment, transport and rural development. Some of the schemes were those promised in the MVA’s common minimum programme. Mr. Pawar said the government has decided to establish a “chair” at London School of Economics to honour Dr. Babasaheb Ambedkar, who studied at the institution from 1916 to 1922.
To resolve the problem of unemployment over the next five years, the budget has unveiled the ₹6,000-crore Maharashtra Apprenticeship Scheme “to provide employment and self-employment opportunities and experience to all youths who have passed at least Class X.”
The scheme, which will begin on August 15, encourages establishments to hire apprentices and aims to train 10 lakh educated, unemployed youth in the 21 to 28 age-group to work in new sectors. The government will pay an amount equivalent to 75% of the monthly stipend or ₹5,000, whichever is less, to the private establishment per month for a candidate. For government establishments, 100% stipend will be covered. The Chief Minister’s Employment Generation Programme, which aims to promote employment and self-employment among the youth, was also announced in the budget. Under this ₹130-crore scheme, grants between 15% and 35% will be given to entrepreneurs for implementing self-employment projects. The government expects one lakh industries to be established over five years and generate up to two lakh jobs every year.
₹120-crore scholarship scheme
The government also aims to implement a ₹120-crore scholarship scheme for the foreign education of students from the poorer sections of minority communities. To promote sports, the budget has introduced three new proposals. The grant to build sports complexes has been hiked from ₹1 crore to ₹5 crore at the taluka level, from ₹8 crore to ₹25 crore at the district level and from ₹24 crore to ₹50 crore at the divisional level. An international sports university will be set up at Balewadi and an Olympic Bhavan in Pune. The government will also organise a mini Olympic competition to promote sports, including for the disabled.
Economic challenges faced by country impacted State too, says Governor
The Telangana government has decided to search for new avenues to better the revenue sources in the light of the severe economic challenges witnessed during the past several months.
Governor Tamilisai Soundararajan said the economic challenges faced by the country did have an impact on the State, but it was able to withstand the situation due to strong administrative policies and fiscal discipline. “The blink in the blind is that while other States are showing negative economic growth, Telangana is able to stick its neck out,” the Governor said.
The government had decided to pursue fiscal discipline due to the prevailing economic scenario in the country and it was committed to fulfilling all the promises made to the people. “All the programmes and schemes will be continued,” she asserted.
The Governor elaborated on the slew of welfare and developmental programmes launched during the last six years, ever since the TRS government took over the reins, in her address to the joint session of the legislature marking the commencement of the budget session.
During the close to 45-minute address, she said the State started its journey in 2014 with all sectors in dire straits due to the neglect meted out to it in the united State.
There were problems in power supply situation and health and education sectors too collapsed. Farm sector in particular was in deep distress owing to various problems, including non-completion of pending irrigation projects and absence of timely supply of inputs like fertilizers and seeds. The government prepared short, medium and long term plans for the all-round development of the State after taking into consideration its resources, facilities, needs, advantages, disadvantages, strengths and weaknesses for revitalization and rejuvenation of the State.
With a series of welfare programmes launched to provide minimum security of livelihood to the poor, the State stood first among all other States in the welfare sector, she said. Starting its journey with acute power shortages, Telangana registered spectacular and unprecedented accomplishments in power sector to become the State with highest per capita power utilisation.
Move will help strengthen security ties
India has been approved as an observer state for a five-nation grouping in the Western Indian Ocean, which includes Madagascar, Comoros, Seychelles, Mauritius and French Reunion.
The members of the Indian Ocean Commission (IOC) decided on India’s application at a meeting last week, officials said. With the decision, India will join China, which was made an observer in 2016, as well as the “International Organisation of the Francophonie” or the 54-nation French-speaking collective, the European Union (EU) and Malta, which were all admitted in 2017.
The decision to join the IOC marks a part of the government’s push for greater salience in the whole Indian Ocean Region (IOR), including what is called the Western or African Indian Ocean. In December 2019, the Ministry of External Affairs decided to include Madagascar, Comoros and Reunion as part of the IOR (Indian Ocean Region) desk along with Sri Lanka, Maldives, Mauritius and Seychelles. Subsequently, they have been incorporated into one single division under the additional Secretary (Indo-Pacific) Neena Malhotra.
The IOC is also significant for its geographical location, as the islands sit around a “key choke-point” in the Indian Ocean — the Mozambique Channel. This channel is being watched more closely as the U.S.-Iran tensions threaten the Strait of Hormuz. Given China’s growing presence in the region, India hopes to increase its naval presence and gain support for its maritime projects across the Indo-Pacific, beginning at East African shores.