The Comptroller & Auditor General (CAG) has sought details of the ongoing performance audit of government’s massive recapitalisation exercise of public sector banks (PSBs), the Finance Ministry has informed the Rajya Sabha.

In response to another question, the Ministry said collections under small savings schemes (National Saving Certificate, Public Provident Fund etc) have been very good as deposits in 10 months of the current fiscal has exceeded the total deposits of FY18 and FY19.

Fund infusion

When asked if the CAG has written to the government seeking details about the ongoing performance audit of the massive recapitalisation exercise of PSBs, Minister of State for Finance Anurag Singh Thakur replied in the affirmative.

The Government has infused total capital of ₹2.65 lakh crore in PSBs during the last three fiscal starting FY18. For the current fiscal (FY21), a total of ₹20,000 crore was provided for recapitalisation, out of which over ₹5,000 crore has been infused in one PSB (Punjab & Sind Bank).

Thakur further added that CAG conducts various types of audit including performance audit, as per audit mandate derived from the Constitution of India and the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971. After completion of the audit, CAG submits audit report to the President, who causes it to be laid before each House of Parliament.

Small savings scheme

Replying to another un-starred question, Thakur said total collection under small saving schemes during April-January period of FY21 was over ₹7.07 lakh crore. For2019-20, the collection was over ₹8.4 lakh crore. Collection during FY18 and FY19 was over ₹5.92 lakh crore and over ₹6.80 lakh crore respectively

“The higher deposits under Small Savings Schemes come from the non-rural areas,” Thakur said.

Zero coupon bond

Responding to a question on issuing zero coupon bonds, the Minister said in order to enable Infrastructure Debt Funds (which are notified by the central government) to issue zero coupon bond, necessary amendments are proposed in the Finance Bill, 2021.

Any eligible issuer can raise funds for funding projects including funding infrastructure through the issuance of non-convertible debt securities, including zero coupon bonds under SEBI’s regulations. Further, zero-coupon bonds can be issued by issuers notified by the Central government or by non-notified issuers. The investors in the zero-coupon bond issued by notified issuers get a differential tax treatment than those who invest in zero coupon bonds of non-notified issuers.

So far, 10 notifications for issuance of zero coupon bonds have been issued by the Centre for issuers such as National Bank for Agriculture and Rural Development (NABARD), Rural Electrification Corporation Limited (RECL), National Housing Bank (NHB), Infrastructure Development Finance Company Limited (IDFC Ltd)], Housing and Urban Development Corporation (HUDCO), Power Finance Corporation (PFC), and Small Industries Development Bank of India (SIDBI).

Zero coupon bond is a debt instrument which does not pay any interest. It is issued at discount and redeemed at full face value. Difference between issue price and face value is profit for depositors.

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