|
Govt looks at ways to expand reach of pension scheme
In a bid to extend the reach of the New Pension Scheme (NPS) designed for the unorganised sector and make it more popular, the Government is looking at a role for microfinance institutions (MFI) as “collection agencies” in the Scheme.
“We need to have some collecting mechanisms for money to flow into the pension fund. MFIs can be collecting agencies in this regard for the NPS meant for the unorganised sector.
“We are looking at developing structures of collecting mechanisms for NPS. We have still not worked out the kind of structures we will have. Since the NPS is for the unorganised sector, we have to look at any number of structures that can be used for this purpose. So MFIs can be one of those structures,” the Financial Services Secretary, Mr R. Gopalan, told reporters on the sidelines of a microfinance event organised by FICCI (Federation of Indian Chambers of Commerce and Industry) and Sa-Dhan, an association of MFIs.
Including Unorganised sector
Speaking at the event, Mr Gopalan said in order to encourage the people from the unorganised sector to voluntarily save for their retirement as well as to lower the cost of operations of NPS for such subscribers, the Government had stated in the Budget 2010-11 that it will contribute Rs 1,000 a year to each NPS account opened in 2010-11.
This initiative is for persons who join NPS with a minimum contribution of Rs 1,000 and a maximum contribution of Rs 12,000 a year during 2010-11, he said, adding that the scheme will be available for another three years. Towards this, the Government had proposed to make an allocation of Rs 100 crore for 2010-11 and the move is expected to benefit about 10 lakh NPS subscribers of the unorganised sector.
MFI role
Mr Gopalan said MFIs can also help in creation of micro-enterprises and in funding the development of clusters in backward regions. Besides, MFIs could enter new areas like micro-insurance, he said.
On the proposal to regulate MFIs, Mr Gopalan said that currently there are two views – one is for self-regulation by MFIs, while the other calls for formal regulation as micro-finance is a financial product. “We have put out these views in our (Finance Ministry's) Web site. It (a regulatory frame work) was in the works. Now we have to take a view on whether or not we have to regulate MFIs. We want stakeholders to respond to it and then we will take a view,” he said.
Bank recapitalisation
Mr Gopalan said, the Government will decide on the recapitalisation of Public Sector Banks by April-end.
“We are looking at what is the credit flow (of PSBs) at the end of March 31, 2010. After that we will look at Capital to Risk (Weighted) Assets Ratio (CRAR), then Tier-1 (capital). All those numbers would flow as the result of what is the credit outstanding as on March 31, 2010,” he said.
In the Budget 2010-11, the Government said that it had infused Rs 1,900 crore during 2008-09 as Tier-I capital in four PSBs to maintain a comfortable CRAR level. It said, an additional Rs 1,200 crore is being infused now. For 2010-11, the Government proposed to provide Rs 16,500 crore to help PSBs attain a minimum 8 per cent Tier-I capital by March 31, 2011. Last year, World Bank had agreed to lend $2 billion to State-owned banks.
Mr Gopalan also said, the Government does not have any intention to stop PSBs from being in non-core businesses like insurance and mutual funds. This follows reports that the Finance Ministry could ask PSBs, receiving recapitalisation funds from the Government, to exit non-core businesses. “Banks have to expand into various financial product activities, so you cannot prevent them from getting into it. There is some space available for these activities, and there is nothing wrong in entering into those areas,” Mr Gopalan said.
|
