Ottappalam in Kerala to have India’s first Defence Industrial Park


India’s first defence industrial park will be set up at Ottappalam in Palakkad district of Kerala.
In this regard, Department of Industrial Policy and Promotion (DIPP) of Union Government has approved a proposal for this defence park forwarded by the Kerala Industrial Infrastructure Development Corporation.
The proposed defence park will be established as part of Union Government’s flagship Make in India programme and state government’s Make in Kerala project.
The park will have modern common infrastructure facilities aimed at favourable environment to component manufacturers of the defence industry. Union government also has agreed to bring the park under the Modified Industrial Infrastructure Upgradation Scheme (MIIUS).
Ottappalam was selected for the defence park in view of its strategic location in terms connectivity and other common facilities such as dedicated power and water supply along with infrastructure for the research and development centre.
Implications: This defence park will play important role bridging the gap related to defence components manufacturing sector and provide platform for export of products related to defence from small- and medium-sized enterprises (SMSEs)











Union Cabinet approves merger of SBI, 5 associate banks


The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the merger of State Bank of India (SBI) with five of its associate/subsidiary banks.
These five subsidiary banks are State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore.
The Union Cabinet also approved the introduction of a Bill in Parliament to repeal the State Bank of India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956.
Key Facts
The acquisition under Section 35 of the SBI Act, 1955 will result in the creation of a stronger merged entity. It will minimize vulnerability faced by subsidiary banks to any geographic concentration risks.
It will improve operational efficiency and economies of scale resulting into in improved risk management and unified treasury operations. Existing customers of associate banks will benefit from SBI’s global network.
The merger will lead to better management of high value credit exposures through focused monitoring and control over cash flows rather than separate monitoring by six different banks.
The merger will also result in recurring savings, estimated at more than Rs. 1,000 crore in first year, because of reduced cost of funds and enhanced operational efficiency.
Comment
The acquisition of subsidiary banks of SBI is considered an important step towards strengthening the banking sector through consolidation of public sector banks (PSBs). It is in pursuance of the Indradhanush action plan of the Central Government. In 2015, SBI was ranked 52 in the world in terms of assets, however the merger will allow its entry un top 50. The merger does not include Bharatiya Mahila Bank (BMB) and its proposal is still under consideration