India‘s beleaguered microfinance institutions plan to ask banks to give them some breathing space. They want to seek a moratorium of up to one year before they resume paying back their loans. At present, industry body Mfin is discussing the idea. It is then expected to approach its counterpart, the Indian Banks Association.
Mfin president Vijay Mahajan says his organization wants one-year moratoriums for microfinance firms operating in Andhra Pradesh and shorter ones for those operating elsewhere. India’s MFIs have been in crisis since October, when the Andhra government issued an ordinance with stringent new regulations. The new rules targeted what some claimed were coercive practices used by MFIs. But they’ve also made it harder for microfinancers to recover loans.
And on the subject of loans, utility company Power Grid Corporation of India Limited or PGCIL is seeking a very large one. The electricity transmission firm plans to borrow a total of $2 billion from the World Bank and the Asian Development Bank. Broken up, that’s $1 billion from each institution.
In an unprecedented move, PGCIL will seek about $250 million out of the potential $1 billion from the ADB as a non-sovereign loan.
PGCIL has an estimated capital expenditure requirement of some Rs1 lakh crore under the 12th plan. About 40% of that will come from international lenders.
Switching to the second generation spectrum scandal, the BJP has made a fresh demand for the Prime Minister to appear in front of a joint parliamentary committee or JPC. Party spokesperson Rajiv Pratap Rudy said Manmohan Singh shouldn’t break precedent by answering a public accounts committee. Instead, he argued, Singh should follow existing norms and appear before a JPC. The government and opposition have been arguing over what sort of committee Manmohan Singh needs to answer over the second generation spectrum scandal. Lok Sabha speaker Meira Kumar has called for an all-party meet in the coming days to break the deadlock.