Disinvestment of REC, NTPC, SJVN to be completed by March: FM

Last Updated: Tuesday, December 1, 2009 - 16:14

New Delhi: Disinvestment in three power PSUs -
NTPC, Rural Electrification Corporation and Satluj Jal Vidyut
Nigam - would be completed during the current financial year
while the process of selling stake in other profit-making PSUs
is already underway.

"Disinvestment of government shareholding in NTPC, SJVN
and REC through public offering in domestic market, is under
implementation. These public offerings are likely to be
completed by March 31, 2010," Finance Minister Pranab
Mukherjee said in a statement in Rajya Sabha.

While in NTPC and REC, five per cent stake each was being
off-loaded, it was 10 per cent in SJVN through the capital
market, he said.

This apart, the Department of Disinvestment has started
dialogue with the administrative ministries and the central
public sector undertakings (CPSUs) to assess their capital
expenditure requirements to be raised through issue of fresh
equity in case of other public sector undertakings.

Mukherjee`s statement came in response to a calling
attention motion by Tapan Kumar Sen (CPI-M) on "disinvestment
of government shares in profit making central public
enterprises."

Noting that only profit earning CPSUs will sustain
investor-interest for sharing in their prosperity, the
minister said, "Already listed profitable CPSEs not meeting
the mandatory public shareholding of 10 per cent are to be
made compliant."

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CPSEs told not to invite bids for bulk deposits from banks

New Delhi: Government has asked the Central
Public Sector Enterprises (CPSEs) to discontinue the practice
of inviting bids for bulk deposits from banks to avoid
undesirable competition among them.

"In order to avoid undesirable competition among banks
leading to arbitrary hikes in deposit rates, which have
consequences for the economy, and considering the need to
moderate the cost of credit, Government has directed CPSEs to
discontinue the practice of inviting competitive bids for bulk
deposits," Mukherjee said today.

He was replying to supplementaries during Question Hour.

The minister said all public sector banks (PSBs) were
advised to publish their card rates for bulk deposits of Rs
one crore and above and in order to bring about a level
playing field they were asked to consider uniform card rates
for bulk deposits.

He also said that in view of huge liquidity in the system,
to contain overall cost of funds and shrinking net interest
margin of PSBs, presently the PSBs are offering lower interest
rates for bulk deposits vis-a-vis retail deposits.

"Though this may lead to decrease in interest earning of
some CPSEs, the move is aimed at benefiting the economy," he
added.

PTI



First Published: Tuesday, December 1, 2009 - 16:14

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