Cabinet Decisions: Yes Bank Rescue Plan Approved, Dearness Allowance Hiked
Watch: Cabinet Decisions
Union ministers Nirmala Sitharaman, Prakash Javadekar and Piyush Goyal made a host of announcements after the cabinet meeting today.
Here are the key highlights:
- Dearness allowance for central government employees hiked by 4 percent.
- RBI-proposed reconstruction scheme for Yes Bank led by SBI approved.
- Copra MSP hiked.
- Government monitoring market volatility.
On Coronavirus-Impacted Sectors
The government is considering all relief measures for sectors that are being impacted by the coronvirus outbreak.
“We’ve stayed in touch with sector representatives that are impacted by coronavirus. We are discussing all relief measures being suggested,” Sitharaman said.
On Market Volatility
Finance Minister Nirmala Sitharaman said that the RBI and the government are closely watching the severe market volatility domestically and globally. She said timely steps will be taken if needed.
Yes Bank Rescue Plan Approved
The Union Cabinet has approved the reconstruction scheme for Yes Bank Ltd. which was proposed by the Reserve Bank of India last week.
“The decision to provide a reconstruction scheme keeps at its core the protection of depositors interest, providing stability to Yes Bank and a stable financial system,” Sitharaman said.
In the plan:
- SBI will invest for 49 percent equity.
- A three-year lock-in period will be there for SBI for 26 percent stake.
- Engagement is happening to bring in more investors.
- Private investors will also have a lock-in but for 75 percent of their stake.
- Authorised capital of the bank to be increased from Rs 1,100 crore to Rs 6,200 crore.
- Moratorium on Yes Bank to be lifted within 3 days of notification of the reconstruction scheme.
- A board to be in place in 7 days of the notification.
Hike In Dearness Allowance
The Cabinet has approved a 4 percentage points increase in dearness allowance to 21 percent for central government employees and pensioners.
This will cost an additional Rs 14,595 crore to the exchequer.
Cabinet Approves Hike In Copra MSP
Union minister Prakash Javadekar has announced that the cabinet has approved a hike in the minimum selling price of copra. The MSP has been increased to Rs 9,960 from Rs 9,521.