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Wednesday, 23 February 2001
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The 10 years that changed India | | |
SERVICES AND INDUSTRY |
DELICENSING is complete except in atomic energy and defence. However, SSI de-reservation yet to be completed. No progress in disinvestment except sale of Balco and Modern Foods.
Bankruptcy laws not yet in place. Lenders use SICA provisions to stave off creditors. Labour laws yet to be changed.
Government permission needed to lay off workers or close factories employing more than 50 people. Restrictions on employing contract labour.
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1991-92
* Prime Minister Narasimha Rao abolishes licensing for almost 80 per cent of all sectors. Only 18 industries remain licensed.
* Monopolies and Restrictive Trade Practices Act amended to allow industries to grow without government approval.
* Phased Manufacturing Programme discontinued.
* Sectors reserved for the public sector cut from 12 to 8.
* Industry location, except in major cities, does not need government clearance.
* SICA amended to bring PSUs under its ambit.
* PSU disinvestment programme starts.
* Disinvestment target Rs 2,500 crore; achievement Rs 3,038 crore.
1992-93
* National Renewal Fund to fund layoff costs.
* PSUs allowed to access capital markets. IPCL the first to do so.
* ONGC corporatised. Disinvestment target Rs 2,500 crore, achievement Rs 1,913 crore. Government reduces stake in Maruti from 60 to 50 per cent making Suzuki an equal shareholder.
1993-94
* Car and white goods manufacturing delicensed.
* Large-scale readymade garment making opened up for foreign equity, subject to export obligations.
* 13 minerals, formerly reserved for the public sector, opened up for private investments.
* Some petroleum products, like kerosene and LPG, decanalised.
* Disinvestment target Rs 3,500 crore; achievement zero.
1994-95
* Almost all bulk drugs delicensed.
* Automatic 51 per cent foreign equity allowed in bulk drug making.
* Disinvestment target Rs 4,000 crore, achievement Rs 4,843 crore.
1995-96
* Disinvestment target Rs 7,000 crore; achievement, Rs 362 crore. Daewoo starts manufacturing the Cielo in July 1995-the foreign first car manufacturer to do so.
1996-97
* Delicensing brings the number of licensed industries down to 14. Consumer electronics is the latest sector to be delicensed.
* Investment ceilings for SSIs raised from Rs 75 lakh to Rs 3 crore.
* Disinvestment Commission set up to identify PSUs for dilution of government stake.
* Disinvestment target Rs 5,000 crore; achievement Rs 380 crore.
* FIPB revamped to make FDI policy ‘more transparent'.
1997-98
* Number of industries under compulsory licensing cut from 14 to 9. Eleven profitable public sector companies are named 'Navaratnas' (or nine jewels). This gives them more freedom to invest, set up JVs, raise overseas funds as well as greater managerial autonomy.
* Disinvestment Commission recommends 50 PSUs for selloffs.
* Disinvestment target Rs 4,800 crore; achievement Rs 902 crore. Software export boom starts
1998-99
* Coal, lignite, sugar, mineral oils, bulk drugs delicensed. Petroleum (not crude, though) also delicensed.
* Corporates allowed to buy back up to 25 per cent of their total net worth.
* Patent Bill approved in Parliament and promulgated by ordinance.
* SSI list shortened by removing tools and farm implements.
* Disinvestment target Rs 5,000 crore; achievement Rs 5,371 crore, including Rs 3,500 crore worth of share swaps among state owned energy companies.
* Hyundai launches the Santro in October 1998 and becomes the first small car to challenge Maruti. Tata Indica launched. Wipro, Infosys emerge as major Indian corporate success stories.
1999-00
* IT Bill introduced in Parliament.
* Tax provisions for housing liberalised.
* Disinvestment target Rs 10,000 crore; achievement Rs 1,584 crore. Modern Foods privatised for Rs 105 crore.
2000-2001
* Bank reforms allow banks to enter insurance sector with partners.
* IRDA finalises entry norms for private insurers. Eleven insurance joint ventures enter the market.
* Maruti Udyog added to the list of companies up for privatisation. Telco runs up huge losses because of Indica.
* Disinvestment target Rs 10,000 crore; achievement zero. |
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POWER reforms remain a disaster area. All SEBs are bankrupt; private sector projects are not coming up since SEBs can't pay.
Lack of political consensus on hiking power tariffs for the agricultural sector has been holding up reforms.
In the petroleum sector, APM dismantling is on schedule, however subsidies on kerosene and LPG remain substantial. The next big deadline is April 1, 2002, when the APM regime will cease to exist.
Civil aviation policy still prohibits investment by foreign airlines in domestic carriers. The next big test for the government is making sure the privatisation of Indian Airlines and Air-India actually happens.
Reforms are not even on the horizon for Railways. In the last two budgets reforms have been in reverse gear. Telecoms have made progress; but constant policy change remains a problem area.
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1992-93
* Oil exploration and refining opened up to foreign investment.
* Lubricants taken out of administered price mechanism (APM).
* Plan drawn up for private equity in BOT road projects.
* Value added telecom services, ie, cellular, paging and radio trunking opened up for private players. Government agrees to provide counter guarantees to private sector power projects — offsetting default risk of state electricity boards — to companies setting up these projects. Bids invited for operating cellular services in the metros.
1993-94
* Five-year tax holiday for power projects and for manufacturing units in backward areas. Reliance Petroleum approaches capital markets to raise Rs 2,172 crore for its Jamnagar refinery.
1994-95
* Private players allowed into fixed line (basic) telecommunications as well as ‘value-added' services like cellular and radio paging.
* Telecom licence auctions take place. Reliance approaches capital markets for Jamnagar refinery. Cellular operators begin services in the metros.
* Bids for basic services total over l Rs 1,00,000 crore; HFCL bids Rs 85,000 crore for 9 circles.
* Eight private sector ‘fast track' power projects approved. Government agrees to prove counter guarantees to eight power projects
* Houston based Enron signs power purchase agreement (PPA) with government of Maharashtra.
* Private proposals for road building invited. The National Highways Act is amended to provide for road tolls.
1995-96
* The Telecom Regulatory Authority of India, is set up.
* The R-Group on reforming the petroleum sector, headed by oil secretary Vijay Kelkar, advises government to dismantle administered pricing and open up the sector to private investors by April 1, 2002.
* First set of cellular licenses issued in the telecom circles outside the metros. Discovered oilfields such as Panna-Mukta and Raava privatised.
1996-97
* DoT and financial institutions reach an agreement on ‘assignability', which makes telecom licences transferable, easing financing constraints for private telecom projects.
* Guidelines for BOT highway projects announced.
* Orissa begins restructuring of its state electricity board.
* Private sector allowed into BOT operations in existing ports. However, port tariffs continue to be administered by port trusts.
* Construction of Jamnagar refinery, which had been delayed by court cases, begins in October 1996. New licensing and exploration policy announced in March 1997.
1997-98
* Telecom, oil exploration and industrial parks included within infrastructure; which makes these sectors eligible for sops.
* Holding companies allowed to raise $50m as ECBs, for infrastructure projects.
* IDFC established as a private company to fund infrastructure projects.
* TRAI set up. Begins functioning from February 20, 1997.
* Capital base of National Highway Authority of India expanded to Rs 500 crore.
* Four-lane national highway toll policy announced.
* Ordinance setting up Central Electricity Regulatory Commission and State Electricity Regulatory Commissions, passed.
1998-99
* Indian Electricity Act, 1910 and Electricity Supply Act, 1948 amended to allow private transmission.
* CERC set up after Electricity Regulatory Commission law passed. States to set up SERCs.
* Urban Land Ceiling Regulation Act, 1976, repealed by ordinance.
* ISPs allowed in under new policy: no licence fee for first five years, Re 1 licence fee for the next five.
* National Integrated Highway Project, a hotchpotch of the golden quadrilateral as well as the prime minister's Kashmir-Kanyakumari-Saurashtra-Silchar cross, launched.
* Bharti Telenet starts offering fixed line services in Madhya Pradesh.
1999-00
* NTP 99 allows multiple fixed line operators; private players allowed in domestic long distance; existing licence holders (basic and cellular) allowed to migrate to revenue sharing. Cellular companies pay higher (17 per cent) revenue share than fixed line operators (8 to 12 per cent).
* Trai reconstituted through ordinance. Seeking Trai's permission on policy and licensing made mandatory for the government.
* About 350 companies register themselves as Internet Service Providers.
2000-01
* Private investment allowed in international data gateways, landing stations for submarine cables. Production starts at Jamnagar.
* Bharti Telecom forms joint venture with Singapore Telecom.
* Prime Minister announces unrestricted entry in domestic long distance.
* Basic (fixed line) operations opened up to unrestricted entry.
* Thirteen companies commit to pay about Rs 4,000 crore to enter fixed line markets.
* Department of Telecom Services corporatised as Bharat Sanchar Nigam in October.
* VSNL's monopoly on international calling to go by 2002, advancing the deadline by two years.
* Batata–Birla, AT&T and Tata Cellular tie up to form telecom service company.
* State owned MTNL and BSNL decide to enter cellular markets through 2001; private operators cut prices in response to MTNL's low tariff.
* The Government allows fixed line operators to begin wireless in local loop operations, providing 'limited' mobility at fixed line local call rates. Cellular operators allege that limited mobility is nothing but a CDMA-based cellular phone service.
* Cellular operators allowed to enter ‘limited' fixed line services.
* Revenue share of cellular operators slashed from 17 per cent to 12 per cent.
* Rush of applications for basic service licenses. More than 100 applications for operating basic services come in, as operators try to get of frequency spectrum
* Telecom companies begin building broadband backbones all over the country. Reliance Infocom plans backbone connecting 115 cities in India.
* Orissa power distribution privatised, government sheds 49 per cent stake in power generation.
* Thirteen states set up or notify SERCs. Andhra Pradesh and Haryana SEBs unbundled into separate generation and transmission companies.
* Andhra Pradesh Electricity Regulatory Commission announces tariff increases; this provokes state-wide riots. Subsidy on Kerosene and LPG reduced; much lesser than specified in the schedule for dismantling APM.
* Maharashtra government refuses to pay Dabhol Power Corporation's dues. DPC invokes Central counter guarantee. Maharashtra government caves in, pays November dues.
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1994-95
* Air taxi operators, private sector players in the aviation sector, are permitted to become full fledged airlines, offering commercial flights and competing with state airlines on all domestic routes.
* Jet Airlines, East West, Damania, NEPC among new private airlines to begin operations
1996-97
* Buying and selling of ships deregulated.
* Ship builders allowed licence-free imports.
* Coastal shipping rates deregulated.
1997-98
* Aviation policy that permits 100 per cent NRI holdings and 40 per cent foreign equity in domestic airlines announced. However, policy bans equity participation from foreign airlines, directly or indirectly.
* Tata-Singapore Airlines joint venture scuttled.
1998-99
* Private sector invited for operating terminals at existing ports. First private port at Piavav becomes operational.
1999-00
* Airports restructured through long term leasing route.
* Indian Railway Catering and Tourism Corporation incorporated.
* Mamata Banerjee reverses reforms by refusing to hike passenger fares.
* Australian Private Port company Peninsular and Oriental starts operating private berth at Jawaharlal Nehru Port; bids invited for terminals at Kochi, Kandla.
2000-01
* Indian Airlines, Air-India listed as privatisation candidates after a prolonged battle between (then) disinvestment minister Arun Jaitley and civil aviation minister Sharad Yadav.
* Expression of interests have ben invited from potential bidders. However foreign Airlines still barred from investing in domestic airlines.
* Rail minister Mamata Banerjee says that the railways will carry fibre optic networks along their routes.
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All QRs to be scrapped on April 1, 2001, except on defence-related and other sensitive items. Government under pressure to retain QRs on textile items.
Exports as a percentage of GDP has increased in the decade after liberalisation.
However, exports continue to be hampered by small scale reservation and high import duties. The government has to encourage exports through sops. Move towards capital convertability on hold.
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1991-92
* Rupee devalued by 18 per cent.
* Administered import licensing replaced in many cases by tradable import entitlements (eximscrips) based on export earnings.
* Advance licence for exporters simplified to improve access to duty-free inputs.
* Canalised list cut.
* Actual user conditions on capital goods, raw material and intermediates under OGL, scrapped.
* Exporters allowed to keep forex accounts and raise overseas credit to finance trade transactions.
* FDI limit raised from 40 to 51 per cent in priority sectors.
* FIPB set up to handle 51 per cent plus FDI proposals in other sectors.
1992-93
* Many import curbs lifted.
* Liberalised Exchange Rate Mechanism, under which 40 per cent of all export earnings were convertible under an official (overvalued) exchange rate and 60 per cent under the market rate, introduced in the Budget. LERM scrapped within the year.
* Import licensing of capital goods, raw materials, intermediaries and components diluted.
* FERA provisions made less stringent.
* Customs duties cut.
* Peak tariffs cut to 110 per cent.
* Baggage rules relaxed.
1993-94
* Dual exchange rates unified and made partially convertible on the current account.
1994-95
* Two categories of NRI deposit scheme, FCNRA and FCONR, terminated.
1996-97
* FIPB issues first guidelines for approving FDI not under the automatic approval list.
* 48 industries become eligible for 51 per cent foreign equity under automatic approval.
* FIIs allowed to invest in unlisted companies.
* ECB guidelines relaxed.
1997-98
* Number of industries that qualify for FDI under automatic approval from the RBI expanded.
* NRIs allowed to invest 100 per cent in priority sectors.
* ECB guidelines eased.
* A committee, headed by S S Tarapore, recommends that India should gradually open up its capital account from 1997-98 to 1999-00. The fiscal, financial and banking systems should be strengthened for convertibility to materialise.
1998-99
* 340 items moved from licensed to OGL category.
* QRs on 2,300 imports from SAARC removed from August, 1998.
* India-Sri Lanka free trade agreement: zero tariffs on most things by 2007.
* Private software technology parks permitted.
* EOU/EPZs get 10 year tax break.
* 100 per cent automatic FDI for power generation, T&D, roads, bridges, ports allowed.
* End use restrictions on GDR/ADRs go except for stock and real estate investors.
* FIIs allowed to trade government securities and treasury bills.
* FIIs permitted to take forward cover on incremental investments.
* 100 per cent FII debt funds allowed to buy unlisted corporate debt.
* Greater flexibility in deploying and raising external commercial borrowings (ECBs).
* Prepayment of ECBs allowed if met out of foreign equity inflows.
1999-00
* Fema 1999 enacted, replacing Fera.
* Quantitative restrictions removed on 1,300 items.
* Apart from sectors under negative list, FDI in other sectors go under RBI's automatic system. Sectoral caps, however, continue. NRIs/OCBs allowed to invest in most sectors.
* Indian corporates allowed to access ADR/GDR markets automatically, subject to sectoral caps
2000-01
* India loses trade dispute with US, agrees to remove QRs on the remaining 1,429 items by April 2001. In April 2000, QRs on 714 items are removed.
* The arrival of cheap Chinese imports sparks panic in local industry. Government imposes pre-emptive duties pending results of anti-dumping investigations; non-tariff barriers like compulsory MRP stickers slapped on imports.
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The primary market continues to be dead with retail investors staying away. However, there has been immense progress with the emergence of the NSE and with institutional reforms like dematerialisation of shares.
Transparency and information flow has increased. This can be attributed to a very large extent to the emergence and growth of foreign institutional investors.
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1991-92
* FIs free to decide on debt-equity swaps. Harshad Mehta led boom begins.
1992-93.
* Sebi announces guidelines on equity market disclosure and transparency.
* FIIs allowed to hold up to 24 per cent of local companies. Individual FIIs can hold maximum five per cent of total equity in a single company. Sensex records 4,367, the highest-ever level at that time. Harshad Mehta led boom run comes to an end in April 1992.
1993-94
* Comptroller of Capital Issues abolished, issue pricing to be market determined.
* The Securities and Exchanges Board of India empowered as market regulator.
* Indian firms allowed to access European markets via Euroequities. Private mutual funds allowed.
* OTCEI set up.
* Screen-based NSE in the process of being set up.
1994-95
* Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 1994 — India's takeover code, passed.
* State owned mutual fund, Unit Trust of India, brought under Sebi jurisdiction.
1996-97
* IPO norms tightened to boost quality of issues.
* IPO issuers need to have three year dividend paying record.
* Public sector banks allowed to access markets and price issues at premium.
* Stock exchanges asked to set up clearing houses.
* Stock lending scheme announced.
* A committee, headed by PN Bhagwati, modifies the takeover code to make management changes less difficult.
1997-98
* Entry barriers for unlisted companies lowered.
* Sebi rules changed to create walls between issuer and registrars of issues.
* Disclosure norms made more stringent.
* Multiple categories of merchant bankers merged into one category.
* Merchant bankers banned from non-capital market transactions.
1998-99
* Rolling settlements for dematerialised shares.
* Infrastructure companies get easier public issue norms.
* IPOs to go through depositories.
1999-00
* Securities Laws Amendment Bill, 1999, passed in Parliament, incorporating derivatives and units of investment schemes as securities; as defined by the Securities Contract and Regulation Act, 1956.
* Rolling settlement allowed in 10 scrips.
* Companies free to determine par value of new issues. Sensex crosses 6,000 on the back of the dotcom boom.
* Satyam Infoway pays Rs 499 crore for Rajesh Jain's Indiaworld at the height of the dotcom boom.
* Rediff and Satyam Infoway come out with ADR issues. Software companies like Infosys start overtaking the likes of Hindustan Lever and Reliance in market capitalisation.
2000-01
* Dematerialised trading made compulsory.
* Rolling settlements introduced.
* Internet trading permitted. Volumes start to pick up.
* Dotcom boom turns to bust on US bourses as doubts surface about the future of e-commerce bellweathers like Amazon. The depressed sentiments spread to the Indian market resulting in Indian software scrips being hammered even though the Indian bourses have no listed dotcoms.
* Hughes Tele.Com first telecom operator to come out with an IPO, which however devolves.
* First hostile bids start to take place.
* Hostile bid by Abhishek Dalmia for Great Eastern Shipping fails. However, Dalmia makes a lot of money.
* Damani Brothers make hostile bid for VST industries.
* FIS return to the Indian market in force. Pour in record amounts in January and February 2001.
* Old economy stocks regain their charm.
* PSU scrips such as VSNL, MTNL and oil sector PSUs start moving up in anticipation of privatisation.
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Tax revenue as a percentage of GDP has slipped since the inception of reforms; from over 16 per cent to around 14 per cent. However, direct tax revenues have gone up — one of the aims of the reform process.
The decline has been caused by a fall in excise duties. Government wants excise duty to be consolidated at 16 per cent. Customs duties continue to remain high — compared to other Asian countries — at a peak level of 35 per cent. |
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1991-92
* Sharp 15 per cent cut in fiscal deficit targeted.
* Export subsidy phaseout to cut costs.
* Fertiliser price hike to cut farm sops.
1992-93
* Lower income tax rates, fewer slabs, higher exemption limits. Deductions rationalised.
* Presumptive tax on small traders, capital gains tax modified to take inflation into account.
* Wealth tax on ‘productive assets' abolished.
* Chelliah Committee on Tax Reforms suggests moderate rates, wider tax base, improved compliance.
* Excise changed from specific to ad valorem rates in many cases.
1993-94
* Excise duty simplified by merging Special and Basic Excise Duty rates. l Capital gains on FIIs cut to a concessional rate of 30 per cent.
1996-97
* Tax holiday for companies in road, bridge, port building; as also maintenance and other core sectors. Also for water supply, sanitation, and sewerage. MAT slapped on ‘tax-free' corporates; MAT excludes companies in power and infrastructure sectors.
* Corporate surcharge cut from 15 to 7.5 per cent.
* Import duties cut on crude, petroleum intermediates, chemicals, plastics, rubber, electronic components.
* Modvat extended to textiles.
1997-98
* Maximum income tax rate cut to 30 per cent from 40 per cent; lowest to 10 per cent from 15 per cent; standard deduction hiked.
* Corporate tax cut to 35 and 48 per cent from 40 and 55 per cent, respectively; corporate surcharge abolished.
* Exporters exempt from MAT.
* Dividend taxation for individuals abolished.
* Interest tax at source on income from government securities abolished.
* Five year tax holiday for telecom, power, industrial parks; seven year holiday for oil exploration.
* VDIS 97, a tax amnesty scheme, nets Rs 10,000 crore.
1998-99
* 10 year tax holiday on FTZs and STPs; also on waterways, ports, paging, data networks, satellite services.
* Gifts exempt from gift tax.
* Simpler tax administration scheme — Saral — introduced.
* Import duties on IT equipment cut.
* Previously exempted items to attract 5 per cent excise duty.
* Service tax net widened to cover 12 more services.
* ‘Downsizing' government spoken about for the first time.
1999-00
* Excise rate slabs cut from 11 to 3: making them 8, 16 and 24 per cent.
* Modvat credit ceiling lifted from 95 per cent of the admissible amount to 100 per cent.
* Peak customs duties cut from 45 to 40 per cent.
* Customs duty slabs cut from seven to five.
* M&As (mergers and acquisitions) made easier by relaxing carry forward and setoff of accumulated losses and depreciation. Demergers made tax neutral.
* Tax holidays for cold storage facilities.
* Entertainment exports given sops similar to merchandise exporters.
* Domestic trade tax reforms: all states to implement uniform floor sales tax from January 2000 and VAT by April, 2001. Sales tax sops to go by January 1, 2000.
* Downsizing cut from the agenda, staff spending and recruitment increase.
2000-01
* Cenvat scheme ramps up effective duty rates, number of slabs cut from five to four.
* Peak duty on consumer goods hiked to 38.5 per cent, from 35 per cent.
* Tax exemptions on export income to be removed in phases.
* Dividend distribution taxes hiked.
* Excise on diesel cut from 16 per cent to 12 per cent; gasoline from 32 per cent to 16 per cent, as government baulks at passing on global price hike to consumers.
* Defence spending upped by a record Rs 13,000 crore. |
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Banking Nationalisation Act yet to be repealed. The Bill has been introduced in Parliament, but not passed. Unless this is done, government cannot reduce its stake below 51 per cent.
The SBI Act, under which RBI's stake cannot go below 55, also to be amended. The IDBI Act, under which the government's stake in IDBI cannot go below 51 per cent, yet to be repealed.
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1992-93
* Narasimham Committee on bank reforms submits report.
* SLR, CRR cut to reduce state pre-emption of loanable funds.
* Number of lending rates cut from six to four.
* Capital adequacy norms laid down for the first time.
* 364-day treasuries introduced with market related rates.
* Other securities' rates raised to bring them close to market rates.
Guidelines for entry of new private banks issued.
* Deposit rates freed, subject to ceiling.
1993-94
* SBI Act amended to allow the bank to access equity market.
* The number of interest rates cut from 4 to 3. Floor lending and deposit rates brought down.
* Budget provides Rs 5,700 crore to capitalise banks to meet new provisioning norms.
* Prudential norms laying down maximum NPAs laid out.
* Debt recovery tribunals set up.
* Malhotra committee report recommends private sector entry entry into the insurance sector.
1994-95
* Banks free to determine PLRs.
* No minimum lending rate for loans above Rs 2 lakh.
* Ad hoc treasury bills limited by agreement between government and the RBI, to limit monetisation of government debt.
1995-96
* IDBI Act amended. IDBI raises Rs 1,200 crore through its initial public offering.
* SBI becomes first Indian bank to be listed overseas, following a GDR issue.
* RBI allows setting up of primary dealership firms to deal in government securities.
* Six primary dealership firms, promoted by banks and financial institutions, granted licence to operate.
1996-97
* CRR cut from 13 per cent to 10 per cent.
* PLRs cut. Government decides to allow setting up of private sector Local Area Banks, which will operate in three contiguous non-metro districts.
1997-98
* Interest on foreign currency deposits deregulated to ‘not more than Libor'.
* Fixed interest rate regime relaxed.
* Banks freed to assess working capital needs of borrowers.
* RBI Act amended after CRB Scam.
* RBI gets sweeping powers to register and regulate NBFCs.
1998-99
* Banks get tougher provisioning norms for government securities, state guaranteed loans.
* Risk weights assigned to government securities, state government guaranteed loans, forex open positions.
* NBFC regulations tightened.
* Insurance Regulation and Development Bill introduced in Parliament.
1999-00
* IRDA Act passed in Parliament, allows private equity in insurance, caps foreign equity at 26 per cent of total, sets up Insurance Regulation Development Authority.
* Banks allowed to operate different PLRs for different maturities.
* Times Bank merged with HDFC Bank.
* ICICI and ICICI Bank get listed in NYSE after their respective ADR issues.
2000-01
* Amendments to Banking Companies Acquisition and Transfer of Undertakings Act allow banks to enter insurance.
* Government says it will cut its stake in public sector banks to 33 per cent, but will retain the ‘public sector character' of these banks.
* State owned banks announce voluntary retirement schemes to shed staff. About 10 to 15 per cent of bank staff apply.
* RBI allows NBFCs to convert themselves into banks. However big industrial groups such as the Tatas, Birlas and Reliance not allowed to start banks. Large industrial houses not allowed to hold more than 10 per cent.
* IRDA issues licences to private insurers — initially, 11 joint ventures get licenses.
* Bank of Madura merged with ICICI Bank.
* Global Trust Bank merged with UTI Bank.
* RBI announces cut in bank rate to combat slowdown. Announces cut in CRR.
* IDBI Act amended to make film financing an eligible activity for the financial institution. |
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