By: D.K Choudhary
Cabinet Permits NABARD to Raise Rs. 20,000 crore for on-lending to Co-Op Banks
i. The Union Cabinet chaired by the Prime Minister Shri Narendra Modi gave its post-facto approval on January 24, 2017 allowing National Bank for Agriculture & Rural Development (NABARD) to raise approx. Rs. 20,000 crore from the market for on-lending to Cooperative Banks.
ii. It permitted the bank to make the short term borrowing at the prevailing market rate and lend to Co-op Banks at 4.5 Percent rate of interest. The move will support the famers by providing them loans to boost agricultural production.
iii. Government also announced to provide an additional capital of Rs. 2,000 crore to NABARD for this purpose through the Union Budget. Initially Rs. 500 crore may be released to NABARD during 2016-17.
iv. Besides, as per the scheme of Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW), an interest subvention of 1.8 percent and NABARD’s administrative cost of 0.2 percent would also be provided. The extent of interest subvention would depend on the rate at which NABARD raises funds.
v. NABARD will also coordinate the conversion of operative/live KCCs into RuPay/ATM-enabled Kisan Credit Cards (KCCs) by Cooperative Banks and Regional Rural Banks (RRBs) in a mission mode.
France Issues First ‘Green Bonds’ With Record Sale of 7 Billion Euro
i. France on January 24, 2017 issued its first “Green Bonds” with a record sale of worth seven billion euro (USD 7.5 billion) thus leading a significant way towards establishment of a genuine market in renewable energy bonds.
ii. The proceeds from the bonds will be used by France to finance projects to address climate change.
iii. The 22-year bonds’ coupon has been set at 1.75 percent which is same as the interest rate on conventional borrowing for the same time frame. This will enable France to finance expenditure on green projects at the same price as traditional borrowing.
iv. The initiative was first announced in April 2016 by President Francois Hollande
v. Poland was the first country to enter the green bond market with a sale of 750 million euro in December. Previously such bonds were issued only by companies or finance institutions such as the World Bank.
vi. A green bond is like any other regular bond but with one key difference: the money raised by the issuer are used towards financing `green’ projects, i.e. assets or business activities that are environment-friendly. Such projects could be in the areas of renewable energy, clean transportation and sustainable water management.
President: François Hollande
Prime minister: Bernard Cazeneuve
Currencies: Euro, CFP franc