Tag Archives: cabinet approval

India and Japan Partnership in ‘Specified Skilled Worker’: Details of areas

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The Union Cabinet of India  has approved the signing of a Memorandum of Cooperation between the Government of India and Government of Japan, on a Basic Framework for Partnership for Proper Operation of the System Pertaining to “Specified Skilled Worker”. Here are the details:

Details:

The present Memorandum of Cooperation would set an institutional mechanism for partnership and cooperation between India and Japan on sending and accepting skilled Indian workers, who have qualified the required skill and Japanese language test, to work in fourteen specified sectors in Japan. These Indian workers would be granted a new status of residence of “Specified Skilled Worker” by the Government of Japan.

Implementation Strategy:

Under this MOC, a Joint Working Group will be set up to follow up the implementation of this MOC.

Major Impact:

The Memorandum of Cooperation (MOC) would enhance people-to -people contacts, foster mobility of workers and skilled professionals from India to Japan.

Beneficiaries:

Skilled Indian workers from 14 sectors viz. Nursing care; Building cleaning; Material Processing industry; Industrial machinery manufacturing industry; Electric and electronic information related industry; Construction; Shipbuilding and ship-related industry; Automobile maintenance; Aviation; Lodging; Agriculture; Fisheries; Food and beverages manufacturing industry and Food service industry would have enhanced job opportunities to work in Japan.

Cabinet approves merger of Lakshmi Vilas Bank with DBS Bank

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The Union Cabinet has given its approval to the Scheme of Amalgamation of Lakshmi Vilas Bank Limited (LVB) with DBS Bank India Limited (DBIL). The approval follows the move to protect depositors’ interest and in the interest of financial and banking stability, on RBI’s application under section 45 of the Banking Regulation Act, 1949.

LVB had been under moratorium for a period of 30 days. In parallel, RBI, in consultation with Government, superseded the Board of Directors of LVB and appointed an Administrator to protect the depositors’ interest.

After inviting suggestions and objections from the public and stakeholders, RBI prepared and provided a scheme for the bank’s amalgamation for the Government’s sanction, well in. advance of end of the period of moratorium so that restrictions on withdrawal faced by the depositors are minimised. With the approval of the scheme, LVB will be amalgamated with DBIL from the appointed date, and with this there will no further restrictions on the depositors regarding withdrawal of their deposits.

DBIL is a banking company licenced by RBI and operating in India through wholly owned subsidiary model, DBIL has a strong balance-sheet, with strong capital support and it has the advantage of a strong parentage of DBS, a leading financial services group in Asia, with presence in 18 markets and headquartered and listed in Singapore. The combined balance-sheet of DBIL would remain healthy even after amalgamation and its branches would increase to 600.

The speedy amalgamation and resolution of the stress in LVB is in line with Government’s commitment to a clean banking system while protecting the interests of depositors and the public as well as the financial system.

LIC to acquire controlling stake of IDBI Bank as Cabinet gives nod

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The Union Cabinet chaired by Prime Minister Narendra Modi has approved in reducing Government of India shareholding in IDBI Bank Limited to below 50% by dilution. It has also approved acquisition of controlling stake by Life Insurance Corporation of India (LIC) as promoter in the bank through preferential allotment / open offer of equity, and relinquishment of management control by the Government in the bank.

Impact:

The acquisition has wide-ranging synergy benefits for customers, LIC and the bank.

Benefits to the two entities emanate from economies of scale, reduction in the costs of distribution and customer acquisition, greater efficiency and flexibility in operations, and greater opportunity for cross-selling of products and services.

These would help financially strengthen both LIC and the bank, as well as their subsidiaries which offer financial products such as housing finance and mutual funds.

Further, the bank would get an opportunity to tap 11 lakh LIC agents for doorstep banking services, positioning it to improve customer services and deepen financial inclusion.

The bank would also be positioned to benefit in terms of lower cost of funds through acquisition of low-cost deposits, and fee income from payment services.
LIC would get bancassurance (i.e. selling of insurance products by bank) through the bank’s network of 1,916 branches, besides access to bank’s cash management services.

Further, LIC would gain in terms of furthering the realisation of its vision of becoming a financial conglomerate.

Customers too would benefit through wider offerings of financial services under one roof, and LIC being better positioned to expand life insurance coverage.

Background:

In 2016, the Finance Minister, in his Budget Speech announced that the process of transformation of IDBI Bank has started and that Government will take it forward and also consider the option of reducing its stake below 50%. Taking note of this announcement, with the approval of its Board, LIC sought permission of the Insurance Regulatory and Development Authority of India (IRDAI) for acquiring controlling stake in IDBI Bank.

After receipt of IRDAI’s permission and carrying out diligence, LIC expressed its interest in acquiring 51% controlling stake to IDBI Bank. The bank in turn, after consideration of this offer by its Board, sought Government’s decision in the context of Government’s stake coming down below 51% as a result of the proposed acquisition.