India, Russia to set up $1 bn fund to promote business:Nirmala Sitharaman

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Both the countries would contribute USD 500 million to the fund, Sitharaman said while addressing India-Russia Business Forum at the ongoing International Engineering Sourcing Show (IESS).

India and Russia are setting up a USD 1 billion fund to promote mutual investments in infrastructure and technology projects, Commerce and Industry Minister Nirmala Sitharaman has said.

Both the countries would contribute USD 500 million to the fund, Sitharaman said while addressing India-Russia Business Forum at the ongoing International Engineering Sourcing Show (IESS) here yesterday.

While the Russian funds would be channeled through Russian Direct Investment Fund (RDIF), Indian contribution will be accrued from National Investment and Infrastructure Fund.

Sitharaman elaborated upon other measures being taken by Russia and India to scale up their economic engagement and to boost bilateral trade and investment.

As part of these initiatives, the India Russia CEO Forum will hold its meeting this year at a mutually convenient date. The forum was constituted in St Petersburg in June 2016.

Foreign Direct Investment (FDI) from Russia is estimated at USD 1.2 billion till date while Indian investment in Russia is around USD 4.9 billion.

“There is tremendous potential for enhancing such investments,” the minister said, adding that initiatives like Make-in-India would catalyse Russian investment in several Indian sectors including Defence production.

“The Make-in-India initiative was launched by the government in order to encourage businesses to manufacture products in the country, creating additional jobs for local population. This is a major drive to foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure,” she said.

India and Russia are engaged in robust cooperation in the energy sector, including collaborations in civil nuclear energy, hydrocarbons and renewable energy.

Source: http://indiatoday.intoday.in/story/india-russia-to-set-up-$1-bn-fund-to-promote-businessnirmala/1/906310.html

To de-stress banks, Modi govt plans ‘significant’ stressed assets fund

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Given the need for large chunks of equity capital to infuse new life into banks’ stressed assets, the government plans a new fund of “significant size” with this mandate, minister of state for finance Jayant Sinha said on Tuesday. A variety of other funds including the proposed National Infrastructure Investment Fund (NIIF) could help bolster the planned stressed assets fund, he added.

“We need an efficient resolution (of the issue of rising stressed assets) and recovery process for our banks,” Sinha said on the sidelines of a conference organised by rating agency Crisil on the deepening of corporate bond markets. He said a committee might be set up to take a look at what kind of haircuts would need to be taken by banks and what their sustainable levels of debt could be. While these could be commercial decisions taken by banks, the government would ensure the process is carried out with integrity, he emphasised.

Many state-owned lenders are facing a tough situation, having reported large losses owing to assets turning sour. Gross non-performing assets in the banking system at the end of March are estimated at Rs 5.7 lakh crore while the provisions set aside by banks in FY16 was Rs 1.43 lakh crore. Total losses of PSBs in FY16 was Rs 17,022 crore.

“We expect a variety of funds — distressed debt funds, special situations fund and NIIF — to participate in the equity investments in these stressed assets,” the minister said. The NIIF, intended to give a leg-up to the country’s efforts to find the elusive equity capital for its huge plans for infrastructure creation, is being set up with an initial corpus of Rs 40,000 crore, half of that from the government, which will remain a minority partner.

The NIIF, which will have several sector-specific sub-funds, is expected to catalyse financing of infrastructure projects by leveraging the corpus multiple times. Many global sovereign wealth funds including the Abu Dhabi Investment Authority, Singapore’s Temasek and Russian Direct Investment Fund have evinced interest in investing in the NIIF. The search for the CEO of the fund has reached the final stage, the minister indicated.

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Sinha said: “There are also many other players who are looking to invest in the stressed assets of Indian banks. So we expect that there will be a vibrant market to be able to take these assets that are in need of equity capital right now.” On Tuesday, finance minister Arun Jaitley, on a visit to Japan, pitched for investments in the NIIF to Japanese investors.

While Sinha has indicated the NIIF’s participation in the proposed stressed assets fund, the former’s stated objective has been to maximise economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects. It could also consider other nationally important projects if commercially viable.

 

Source: http://www.financialexpress.com/article/industry/banking-finance/bank-npas-centre-turns-to-stressed-assets-fund-to-cap-crisis/270598/