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Government package soon for stressed state-run banks: Sinha

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NEW DELHI/INDIA, 15NOV10 - Arun Jaitley, Leader of the Opposition, Rajya Sabha, Parliament of India, India, during the Fostering Public Leadership at the World Economic Forum's India Economic Summit 2010 held in New Delhi, 14-16 November 2010. Copyright (cc-by-sa) © World Economic Forum (www.weforum.org/Photo Matthew Jordaan matthew.jordaan@inl.co.za)
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New Delhi: The government is working on a comprehensive package to help stressed state-run banks and improve the flow of credit for industry, Minister of state for Finance Jayant Sinha said on Wednesday.

“NPAs (non performing assets, or distressed loans) are simply a symptom of the underlying issues that need to be resolved,” Sinha said at an event here organised by the Indian Private Equity and Venture Capital Association.

“We are preparing a comprehensive package which we will bring out shortly,” he added.

n10 jayant sinha
Minister of state for Finance Jayant Sinha

The minister said the government was trying to improve corporate governance and strengthen management at state-run banks, while also overhauling annual targets for public sector lenders to increase the focus on efficiency.

Sinha said he would meet banks over the next two days in Bangalore to fine-tune their capital-raising plans.

“We are trying to understand exactly what is their capital requirement going to be in the next one to three years. We are there to support and provide them the capital,” he said.

According to the Reserve Bank of India, gross NPAs as a ratio of total loans could rise to 4.8 percent by September from 4.6 percent in March.

The government has agreed to pump in about $3 billion into the banks during the current fiscal towards their capitalization.
Finance Minister Arun Jaitley last month said his ministry is currently preparing a list of projects stalled due to lack of finance to set in motion the process of their revival and thus bring down the NPAs of banks.

“Many stalled projects have started. The secretary, department of financial services, in consultation with others, will prepare a list of projects stalled because of finance,” Jaitley had told reporters here after meeting with the heads of public and private sector banks.

NEW DELHI/INDIA, 15NOV10 - Arun Jaitley, Leader of the Opposition, Rajya Sabha, Parliament of India, India, during the Fostering Public Leadership at the World Economic Forum's India Economic Summit 2010 held in New Delhi, 14-16 November 2010.  Copyright (cc-by-sa) © World Economic Forum (www.weforum.org/Photo Matthew Jordaan matthew.jordaan@inl.co.za)

“We will deal with these stalled projects directly. We will call representatives of state governments, of the projects and the departments concerned over the next few weeks,” he said.

Gross non-performing assets, or distressed loans, of state-run banks have gone up to Rs.260,531 crore as in December 2014. In the fourth quarter of January to March 2015, NPAs had come down from 5.64 to 5.2 percent.

As per the finance ministry’s Economic Survey published before February’s union budget, stalled projects as in December-end amounted to Rs.880,000 crore.

(IANS)

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Is investing in Bitcoin safe? Get the basics first!

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India has not legitimized bitcoin, hence investment returns are totally based on demand i.e. you get your return only if there is another buyer in the market who is ready to pay you more for it. Currently the high-value of the digital currency owes to its high demand, but once people start selling, there is a possibility that rates will drastically fall. Pixabay
India has not legitimized bitcoin, hence investment returns are totally based on demand i.e. you get your return only if there is another buyer in the market who is ready to pay you more for it. Currently the high-value of the digital currency owes to its high demand, but once people start selling, there is a possibility that rates will drastically fall. Pixabay

With the fussy mania of Bitcoin going around and past, your eyes and ears, in the news and peer discussions, you must be having some basic questions about it: What is bitcoin? Is it legal? How can I get it? But most of all, you must be thinking, ‘Is investing in Bitcoin safe?’

Let’s find out!

Pluto Exchange has launched first app that will trade in bitcoins in India
Pluto Exchange has launched the first app that will trade in bitcoins in India. Wikimedia commons

ALSO READ: Bitcoin Worth Millions Stolen Days Before US Exchange Opens

Clearing the basics

  • Bitcoin is the first ever cryptocurrency that existed, it was invented in 2009 by Satoshi Nakamoto.
  • Cryptocurrencies are nothing but computer codes that have monetary value. No Government has any control over them.
  • Bitcoins ‘self-contain’ their value i.e. there’s no need for any bank to move or store the money.
  • Bitcoin currency is completely unregulated and decentralized.
  • Bitcoins are mined, and they can be mined by anyone in the general public who has a strong computer. However, only 21 billion of bitcoins in total can be mined. Currently, there are around 11 million in circulation.
  • Bitcoin has no underlying physical monetary base to support its value, and it is totally subject to its demand in the market.

What are the risks?

  • Low demand: India has not legitimized bitcoin, hence investment returns are totally based on demand i.e. you get your return only if there is another buyer in the market who is ready to pay you more for it. Currently, the high-value of the digital currency owes to its high demand, but once people start selling, there is a possibility that rates will drastically fall.
  • Unregulated: There is no bank or government tax agency that can track your money and its movement. Hence, it can become a tool for money laundering.
  • Irreversible transactions: There is no insurance protection of your bitcoin wallet i.e. if you lose your wallet’s hard drive data or even your password, your wallet’s content is gone forever.
There is no insurance protection of your bitcoin wallet i.e. if you lose your wallet’s hard drive data or even your password, your wallet’s content is gone forever. Pixabay
There is no insurance protection of your bitcoin wallet i.e. if you lose your wallet’s hard drive data or even your password, your wallet’s content is gone forever. Pixabay

ALSO READ: How can you trade in Bitcoin in India?

Status of Bitcoin in India

Finance minister Arun Jaitley highlighted in a statement that cryptocurrencies are not legal tender and have no regulatory permission or protection in the country.

However, there was no announcement banning or imposing any curbs on the same. The government panel is also awaiting a report on tackling cryptocurrencies in India, Jaitley said.

The government has recently cautioned investors to be wary of virtual currencies like bitcoin, saying they are like Ponzi schemes with no legal tender and protection.

“One of the features of cryptocurrency is that there is lack of dependence on the state. It functions with a degree of anonymity. It operates within a virtual community which is created and enjoys the trust of that virtual community,” Finance Minister Arun Jaitley told the Rajya Sabha.

“The government is examining the matter. A Committee under the chairmanship of the Economic Affairs Department Secretary is deliberating over all issues related to cryptocurrencies to propose specific actions to be taken… Instead of taking any knee-jerk action, let’s wait for the report of this committee.” Jaitley added