SBI, associate banks surge after Cabinet okays merger

NEW DELHI: Shares of SBI and its associates rose sharply by as much as 13.5 per cent today after the Cabinet approved their merger, a step aimed at strengthening the sector through consolidation of public banks.

The scrip of State Bank of Mysore soared 13.54 per cent, State Bank of Bikaner and Jaipur zoomed 10.86 per cent, State Bank of Travancore jumped 10.54 per cent while SBI gained 3.10 per cent on BSE.

Seeking to create a global-sized bank, the Cabinet yesterday gave the go-ahead to the merger plan of SBI and its five associates.

However, no decision was taken on the proposal to merge the Bharatiya Mahila Bank with SBI.

Latest Comment

Excellent news for banks. Now time to merge all small and loss making banks into BOB and PNB for cost cutting.RaMa Rajya

The merger of associate banks is likely to result in recurring savings, estimated at more than Rs 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds, an official statement said.

The two unlisted associate banks which will be merged with SBI are State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH).

source”cnbc”

IIM Bill 2017: Approved by cabinet, students will now get degrees instead of diplomas

The Bill enables the IIMs to award degrees instead of diplomas.

In picture, IIM-Calcutta (File Photo)

In picture, IIM-Calcutta (File Photo)

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The Union Cabinet on Tuesday approved the Indian Institute of Management Bill, 2017, granting them complete autonomy. Under the Bill, the IIMs would be declared as institutions of national importance and provided statutory powers.

After getting an approval from the law ministry, the human resource development (HRD) ministry may place the proposed draft of the Bill in the upcoming budget session of the parliament.

Till now, only 20 premier institutes give post graduate diplomas to the students.

The Bill enables the IIMs to award degrees instead of diplomas.

HRD minister Prakash Javadekar tweeted:

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Prakash Javadekar

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Historic decision to give IIMs real autonomy&grant degrees.We trust excellence&quality.This reflects vision of ModiGovt for higher education

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As per the sources, the Bill will grant powers to the board of governors to order a probe against an IIM director, if his institute fails to perform as per the proposed Act. A person similar to the rank of a High Court judge will conduct the investigation.

According to the proposed draft, the board must evaluate the performance of the new institute within the first three years of its set up and continue to check on a period of short intervals.

source”cnbc”

IIM: Bill to placed in cabinet likely to give statutory powers to the institute

Based on this inquiry, the Board may even remove the director of the institute or order any other action.

In picture, IIM-Bangalore (File Photo)

In picture, IIM-Bangalore (File Photo)

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A bill to grant statutory powers to the IIMs and enable these prestigious institutes to give degrees is expected to be presented shortly to the Union Cabinet for approval.

Among the major provisions of the draft Indian Institute of Management Bill, 2017, is one which grants powers to the IIM Board of Governors to get an inquiry conducted by a person not below the rank of a High Court judge against a director in case it is felt that an institute has not performed as per the provisions of the proposed Act.

Based on this inquiry, the Board may even remove the director of the institute or order any other action which would be appropriate. The director may be removed if he would not be convincing enough to prove his point, sources said.

Report in details:

It is also understood that as per the proposed draft, the Boards of Governors of IIMs would evaluate the performance of the institutes after every few years. The Prakash Javadekar-led HRD Ministry, it is understood, has got the draft vetted by the Law Ministry and it is likely to come before the Cabinet soon for its approval to take it before the Parliament.

The HRD Ministry had last year wanted to bring the Indian Institutes of Management Bill to the Parliament, but it was felt that more discussions were needed. Following consultations, the HRD Ministry had earlier decided to remove a provision which related to the President being the Visitor of the IIMs. The government has been looking to grant more autonomy to these institutes and more powers have been granted to their Governing Boards.

The ministry has also decided to lay down a clear rule on the line of succession in case the post of Director falls vacant and a regular person is yet to be appointed. It is understood that the new Bill would lay down that the senior-most faculty would then take charge.

Earlier, the draft Bill contained a provision as per which a Coordination Forum which would have the HRD Minister as its chairperson but after consultations, it was decided that a selection panel would choose an eminent person as the chairperson.

The Coordination Forum is a body which is expected to take up matters common to all the IIMs. The Indian Institutes of Management (IIMs) are autonomous institutes of management education and research and are presently registered as societies under the Indian Societies Registration Act.

The IIM Bill seeks to give degree-granting powers to these institutes, more autonomy and statutory status to the 20 IIMs and declare them as Institutions of National Importance.

source”cnbc”

IIMs seek Cabinet approval for withdrawal of 1975 HRD order

IIM

Following the incessant controversy over the appointment of IIM faculty under quota system for the reserved candidates, it is now been learned that the premier institutes had to be withdrawn the 1975 HRD order, which had earlier exempted the premier institutes from reservation policy.

However, there is a speculation that the 1974 HRD order was only meant for technical institutes and not for the management institutes. The confusion arose when the HRD Ministry exempted the IIM Ahmedabad from recruiting its faculty through quota and subsequently adopted the order by the IIM fraternity.

The ambiguity over IIM’s faculty recruitment

Speaking about the ambiguity of reservation policy in the IIMs, one director said, “We are bound by the 1975 order. There has been no other order from HRD ministry invalidating exemption from reservation to SCs/STs/OBCs.” The director further reiterated that the 1975 HRD order was first initiated in 1974 specified for the School of Planning and Architecture thus exempting from quota in recruiting faculty.

The IIM fraternity, following their interest, clarified that should the exemption be lifted from IIMs, the Ministry had to withdraw the HRD 1975 order. The fraternity also reiterated that such order cannot be withdraw in haste as it required approval from the Cabinet.

As reported in the TOI, one IIM Director anonymously remarked, “If the order was issued after a Cabinet decision, then HRD will have to seek Cabinet approval. It is not going to be easy,”

Meanwhile, the HRD Ministry is due to render its statement.

source”cnbc”