Recapitalization of four PSU Banks:
The Finance Ministry has announced to infuse fresh capital of Rs 14,500 crore in four public sector banks. For that, the government will issue non-interest-bearing recapitalization bonds to the banks.
Central Bank of India, Indian Overseas Bank, Bank of India and UCO Bank are the four lenders chosen for that purpose. Out of the allotted amount of Rs 14,500 crore, Central Bank of India will receive the highest capital of Rs 4,800 crore. It will be followed by Rs 4,100 crore in Indian Overseas Bank, Rs 3,000 crore in Bank of India and Rs 2,600 crore in UCO Bank.
Three out of the four chosen lenders- Indian Overseas Bank, Central Bank of India and UCO Bank- are placed under prompt corrective action (PCA) framework. Under this, they are restricted from conducting lending activities.
With fresh capital infusion, these banks are likely to come out of PCA and restart their usual business activities.
ECLG scheme extended:
The government has extended the Emergency Credit Line Guarantee (ECLG) Scheme of Rs 3 lakh crore for three months. Now, the scheme will be effective till 30th Jun’21. The last date for disbursement under the scheme has been extended till 30th Sep’21.
The government has also widened the scope of the scheme. It will now cover business enterprises in Hospitality, Travel and Tourism, Leisure, and Sporting sectors as well.
ECLG scheme was launched to support the MSME sector which was impacted due to the lockdown. Covid-19 cases are rising again and certain segments have still not recovered. This could have prompted the government to extend the scheme.
PLI for food processing sector:
The government has approved a production-linked incentive (PLI) scheme for the food processing sector, with an outlay of Rs 10,900 crore.
There is a rising global demand for Indian ready-to-eat food. This scheme will support food manufacturers in developing processing capacity. It also includes incentives for branding abroad to create strong Indian brands.
With this scheme, the processed food output in India is expected to touch Rs 33,494 crore. It is also expected to generate ~2.5 lakh jobs by 2026-27. It will also expand the food processing capacity and increase export opportunities.