The finance ministry has asked state-run banks to strongly participate in the Swachh Bharat Missionby constructing new toilets in schools, indicating that the government wants them to do more than just bringing the un-banked families into the banking system under the Pradhan Mantri Jan Dhan Yojana (PMJDY). In a letter to all the state-run banks, the ministry has sought details of their corporate social responsibility (CSR) budgets, specifically asking how much of the funds do they plan to dedicate for construction of new toilets. The move comes days ahead of the October 2 launch by Prime Minister Narendra Modiof the Swachh Bharat Mission, a nationwide campaign for ensuring hygiene and tackling waste management and sanitation. The project envisages building at least 20 million toilets in the first year. Banks have opened over 3.02 crore accounts under the PMJDY since it was first announced by the prime minister in his Independence Day address. The government has told banks that spending under the PMJDY scheme will be counted towards their CSR spend. The scheme targets to provide two bank accounts each to more than 7.5 crore unbanked households. The ministry wants us to strongly participate in the Swachh Bharat Mission, said a senior executive at a state-run bank, confirming that his bank has received the finance ministrys letter. An executive at another state-run bank said: We have submitted the requisite details and confirmed the government about our plans to help schools. State Bank of India, the countrys biggest lender, is expected to spend over Rs 150 crore on CSR activities this fiscal. Several companies such as Larsen & Toubro (L&T), Tata Consultancy Services, Vedanta Group and Bharti Enterprises have committed funds towards the Swachh Bharat Mission. The finance ministrys letter, however, takes a contrary position to its earlier stand where it had sought exemption for banks under the mandatory 2% CSR norms. The ministry had in a letter earlier this year to the corporate affairs ministry sought temporary relief for banks from the mandatory CSR spend, citing poor economic growth and increasing capital requirements of commercial banks. According to the Reserve Bank of India, scheduled commercial banks will together need an additional capital of Rs 5 lakh crore to comply with the Basel-III regulations. Of this, equity capital requirement will be of Rs 1.75 lakh crore and non-equity capital will be Rs 3.25 lakh crore
Posted on: Tue, 16 Sep 2014 15:42:43 +0000
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