Sunday, 20 December 2015

Exam And Interview SPECIAL: Recently Introduced Funds

Government has recently introduced many funds for the development purposes. These funds are very important for both examination as well as interview point of view. So friends, the time has arrived when all your weapons should be sharpened because you are just a step away from the bank.


a) Minister of State for Commerce & Industry (I/C), Mrs. Nirmala Sitharaman, launched the Technology Acquisition and Development Fund (TADF) under National Manufacturing Policy which is implemented by Department of Industrial Policy & Promotion(DIPP). 
b) TADF is a new scheme to facilitate acquisition of Clean, Green & Energy Efficient Technologies, in form of Technology / Customised Products / Specialised Services / Patents / Industrial Design available in the market available in India or globally, by Micro, Small & Medium Enterprises (MSMEs). 
The Scheme is conceptualised to catalyse the manufacturing growth in MSME sector to contribute to the national focus of “Make in India”. 

The scheme will be implemented through Global Innovation and Technology Alliance (GITA), a joint venture company, support to MSME units is envisaged by the following: 

I. Direct Support for Technology Acquisition
II. In-direct Support for Technology Acquisition through Patent Pool
III. Technology / Equipment Manufacturing Subsidies
IV. Green Manufacturing – Incentive Scheme

FIF:Financial Inclusion Fund (FIF)

The Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF) was constituted in the year 2007-08 for a period of five years with a corpus of Rs. 500 crore each to be contributed by Government of India (GOI), RBI and NABARD in the ratio of 40:40:20. The guidelines for these two funds were framed by GOI. 
In April 2012, RBI decided to fund FIF by transferring the interest differential in excess of 0.5% on RIDF and STCRC deposits on account of shortfall in priority sector lending.
What is new?
The GOI has merged the FIF and FITF to form a single Financial Inclusion Fund. The Reserve Bank of India has finalised the new scope of activities and guidelines for utilisation of the new FIF in consultation with GOI. 
The new FIF will be administered by the reconstituted Advisory Board constituted by GOI and will be maintained by NABARD.

Important Points related to FIF
1) The overall corpus of the new FIF will be Rs. 2000 crore. 
2) Contribution to FIF would be from the “interest differential” in excess of 0.5% on RIDF and STCRC deposits on account of shortfall in priority sector lending (as notified by RBI from time to time) kept with NABARD by banks.
3) The Fund shall be in operation for another three years or till such period as may be decided by RBI and Government of India in consultation with other stake holders.
4) The objectives of the FIF shall be to support “developmental and promotional activities” including creating of FI infrastructure across the country, capacity building of stakeholders, creation of awareness to address demand side issues, enhanced investment in Green Information and Communication Technology (ICT) solution, research and transfer of technology, increased technological absorption capacity of financial service providers/users with a view to securing greater financial inclusion. 
Note: The fund shall not be utilized for normal business/banking activities.

Eligible Activities/Purposes for FIF

1) The fund will help for the setting up and operational cost for running Financial Inclusion & Literacy Centers. The setting up of such Centers are in sync with the objective of GoI for setting up Financial Literacy Centers upto the block level under the PMJDY. These centres are important as they will be: 
a. Providing financial literacy training to all individuals/households of the area.
b. Providing counseling services for opening of bank accounts and for operating banking and other financial products and services.
c. Providing training to BCs about various banking & other financial products and services and also for training them in use of technological devices so as to ensure smooth servicing of customers.
d. Redressal of customer grievances by attending to customer complaints, if necessary, by taking up with banks and other institutions.
2) Setting up of Standard Interactive Financial Literacy Kiosks in Gram Panchayats and any other financial literacy efforts under taken by banks in excluded areas.
3) Support to NABARD & Banks for running of Business & Skill Development Centers.
4) Support to pilot projects for development of innovative products, processes and prototypes for financial inclusion.
5) Financial assistance to authorised agencies for conduct of surveys for evaluating the progress under financial inclusion.

Eligible Institutions
Financial Institutions, viz., Commercial Banks, Regional Rural Banks, Cooperative Banks and NABARD.
Eligible institutions with whom banks can work for seeking support from the FIF:-
• NGOs
• SHGs
• Farmer's Clubs -
• Functional Cooperatives
• I.T. enabled rural outlets of corporate entities.
• Well-functioning Panchayats
• Rural Multipurpose kiosks / Village Knowledge Centers
• Common Services Centres (CSCs) established by Service Centre Agencies (SCAs) under the National e-Governance Plan (NeGP).
• Primary Agricultural Societies (PACs).


a) India is set to launch its own version of a sovereign wealth fund — the National Investment and Infrastructure Fund that would focus only on core sector projects, by the end of the year.
b) The NIIF will have a corpus of Rs 20,000 crore. It was cleared by the Cabinet on July 29.
c) National Investment and Infrastructure Fund (NIIF) is a fund created by the Government of India for enhancing infrastructure financing in the country.
d) The objective of NIIF would be to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects. It could also consider other nationally important projects, for example, in manufacturing, if commercially viable.

Functions of NIIF
Fund raising through suitable instruments including off-shore credit enhanced bonds, and attracting anchor investors to participate as partners in NIIF;
Servicing of the investors of NIIF.
Considering and approving candidate companies/institutions/ projects (including state entities) for investments and periodic monitoring of investments.
Investing in the corpus created by Asset Management Companies (AMCs) for investing in private equity.
Preparing a shelf of infrastructure projects and providing advisory services.

NIIF Purpose?
1. Provides equity / quasi-equity support to those Non Banking Financial Companies (NBFCs)/Financial Institutions (FIs) that are engaged mainly in infrastructure financing. These institutions will be able to leverage this equity support and provide debt to the projects selected.
2. Invest in funds engaged mainly in infrastructure sectors and managed by Asset Management Companies (AMCs) for equity / quasi-equity funding of listed / unlisted companies.
3. Provides Equity/ quasi-equity support / debt to projects, to commercially viable projects, both greenfield and brownfield, including stalled projects.

Funding to NIIF
The initial authorized corpus of NIIF would be Rs. 20,000 crore, which may be raised from time to time, as decided by Ministry of Finance. Government can provide upto 20000 crore per annum into these funds. Government's contribution/share in the corpus will be 49% in each entity set up as an alternate Investment Fund (AIF) and will neither be increased beyond, nor allowed to fall below, 49%. The whole of 49% would be contributed by Government directly. Rest is open for contribution from others. The contribution of Government of India to NIIF would enable it to be seen virtually as a sovereign fund and is expected to attract overseas sovereign/ quasi-sovereign/multilateral/bilateral investors to co-invest in it. Cash-rich Central Public Sector Enterprises (PSUs) could contribute to the Fund, which would be over and above the Government's 49%. Similarly, domestic pension and provident funds and National Small Savings Fund may also provide funds to the NIIF. NIIF may utilize the proceeds of monetized land and other assets of PSUs for infrastructure development. The NIIF will work out these details in consultation with the Ministry of Finance, to match different investors’ preferences.

Current News related to NIIF: 
Government has set up a search committee under Economic Affairs Secretary Shaktikanta Das for selection of a CEO for the National Investment and Infrastructure Fund (NIIF).

Source: RBI & GOI

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