Discrimination faced by Mumbaikars...
If the housing societies in Mumbai (Bombay) are only meant for families (married couples), then the government of Maharashtra should make marriage compulsory in the state/city.
Or else the government should tell its citizens where will Unmarried, Divorcees, Bachelors, Spinsters live in the city of skyscrapers or is Bombay only for those who have families.
This is one of the greatest mental blocks of Mumbaikars, who otherwise want to bask in the FALSE HALO of Cosmopolitanism.
This disease (of not giving apartments to Bachelors, Muslims, etc on rent) is specially prevalent in housing societies where the Gujaratis, Marathis and North Indians (to some extent) abound; while the rest of the population is more or less okay with the concept.
The government of Maharashtra should take this matter seriously and devise laws to eradicate this malice ASAP, so that BOMBAY (and its suburbs) becomes free of discrimination based on Marital Status, Religion, etc. Or else the Honourable Supreme Court of India should step in, and give directions to the state or central governments -- so that the fundamental rights of its citizens enshrined in the constitution of India is not violated.
Monday, December 08, 2014
Stalled infrastructure projects set for a big push
The Securities and Exchange Board of India is considering changing rules to allow Indian banks to convert a larger portion of their loans into equity at less than the six-month average price of the stock in listed companies whose projects especially in the infrastructure sector are being restructured.
This is part of a wider effort by policy makers led by the Reserve Bank of India (RBI) to get these projects back on track.
Following talks between Sebi and RBI, a proposal is underway seeking to provide a special dispensation only for banks to convert part of their loan exposure to troubled or stalled infrastructure projects at a price lower than the market.
This may be allowed only if the restructuring has the explicit or implicit approval of the central bank, senior officials said. The RBI had approached the capital market regulator to seek a new pricing formula as it reckons that some of the projects are valuable resources.
As current rules allow conversion of loans into equity only at a price higher than the prevailing market price given the Sebi norm of a six-month average, banks have lost money in a few cases, notably Kingfisher Airlines. This has prompted a review of rules now.
Banks can now own only upto 10 per cent of the equity in a restructured project.
The capital market regulator is broadly in agreement with this provided the projects are those which form part of a scheme for stalled infrastructure projects or is vetted by the central bank, senior officials said. The difference between the lower price for such conversion and the market price will provide some flexibility to banks which have been hit by rising bad loans.
“We don’t want the price to be too low… then the value gets transferred from minority shareholders. We don’t want the value to be too high, then the value gets transferred from the banks, “RBI Governor, Raghuram Rajan had said last week after the monetary policy review. Bankers have been complaining that the six-month average price was a major road-block in the restructuring process.
Figures compiled by the finance ministry show that 371 projects with a investment Rs 18,47,266 crore are pending for resolution with the Project Monitoring Group (PMG) of the government.
This has also led to a fall in new project investments in the country. State-owned banks which funded these projects predominantly are already saddled with Rs 2,43,043 crore of bad loans — which is 5.32 per cent of their advances.
In an inter-action with a select group of print media journalists last week, Rajan said that many of these projects are in deep trouble and will need new infusion of funds. “ Unless the capital structure is remedied, there won’t be any new infusion… even to complete the projects. You will have to restructure the capital structure,” he said.
The RBI is keen to introduce adequate safeguards. “The question we have to ask ourselves is: can we build in enough safeguards that we don’t have misuse of this process? We are trying to create some flexibility with enough safeguards. If the project succeeds, you have a big chunk of equity which will give a big upside,” Rajan had said last week. The safeguards that he hinted at could be because of past experience when such conversion of loans into equity was perceived as an attempt to mask bad loans.
In the case of loans to Kingfisher Airlines, banks which converted their debt at a price of Rs 65 a share are sitting on huge losses. The Kingfisher stock is now being quoted at Rs 1.34, — a massive loss of 98 per cent in the value of banks’ equity holding in the company. This was when the loan conversion was done in line with the Sebi formula of six-month average price.
Following misuse of the restructuring mechanism, the RBI had, in May 2013, restricted conversion of loans into equity by banks to 10 per cent of the restructured debt.
The RBI now also plans to allow banks to use the 5/25 norms for infra loans — now available only to fresh projects — for existing projects. What that means is banks can give loans to new infra projects for a 25-year period and refinance them every five years provided these projects do not become a non-performing asset.
These loans would not be classified as a restructured asset — which attracts a higher provisioning of 5 per cent — but categorised as standard.
SPECIAL WINDOW FOR BANKS
# A proposal is underway to let banks to convert part of their loan exposure into equity at a price lower than the market
# Current rules allow conversion of only at a higher price given the Sebi norm of a six-month average
# Due to this restriction, banks have lost money in a few cases, notably Kingfisher Airlines, which has prompted a review of the rules.