DIPP Notifies Automatic FDI Route For White Label ATMs

  • Foreign investors would now be able to invest up to 100 per cent equity in white label ATM operations with the government notifying the regulations for the same.
  • “The government has reviewed the extant FDI policy and decided to allow foreign investment up to 100 per cent in While Label ATM operations under the automatic route,” the DIPP said in a press note.
  • White Labelled ATMs are set up by private non-bank companies that own and operate their own brand of ATMs. The companies seeking to set up such ATMs would have to follow certain conditions.
  • Any non-bank entity intending to set up WLAs should have a minimum net worth of Rs.100 crore as per the latest financial year’s audited balance sheet, which is to be maintained at all times, it said.
  • In case the entity is engaged in any other 18 non-banking finance companies activities, then the foreign investment in the company setting up WLA shall also have to comply with minimum capitalisation norms for foreign investments in NBFC activities.

LIC cuts stake in CPCL

  • Life Insurance Corporation (LIC) has lowered its stake in Chennai Petroleum Corporation (CPCL) to 5.04 per cent by selling two per cent stake in the company, according to a stock exchange filing.

Wary of risks, GAIL to take 10% stake in TAPI pipeline

  • India will take no more than 10% stake in the US-based $10 billion Turkmenistan- Afghanistan-Pakistan-India (TAPI) natural gas pipeline, considering the risk associated with the project.
  • The four nations to the pipeline had in August agreed to co-own the project and a joint venture “Turkmenistan’s state-owned TurkmenGaz will be the leader of the consortium and will take a minimum 51% stake. India will be represented by (state gas utility) GAILIndia,” a senior government official said.
  • Considering $10 billion as the approximate project cost, the host countries need to put in $3 billion as equity.
  • “GAIL is willing to put in 10% equity,” he said. “Even that 10% equity will come for $300 million, which is not a small sum of money.”
  • The company, he said, feels that the project has inherent security and geo-political risks as it passes through some of the world’s most dangerous places.
  • “It wants to cut its risks,” he said.
  • The work on TAPI pipeline is yet to commence as the four nations have not succeeded in finding a reputed international firm that could lead the consortium to construct and operate the pipeline.
  • French giant Total SA had initially shown interest in leading a consortium of national oil companies of the four nations in the TAPI project. It, however, backed off after Turkmenistan refused to accept its condition of a stake in the gas field that will feed the pipeline.
  • Since the four state-owned firms, including GAIL, neither have the financial muscle nor the experience of a cross- country line, it was felt that an international company would be better in building and operating it in hostile territories of Afghanistan and Pakistan.
  • However, with no foreign company willing to take the project, the four nations have decided to implement it on their own, the official said.
  • The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day (mmscmd) gas for 30 years and is planned to become operational in 2018. India and Pakistan would get 38 mmscmd each while the remaining 14 mmscmd will be supplied to Afghanistan.
  • TAPI will carry gas from Turkmenistan’s Galkynysh field, better known by its previous name South Yoiotan Osman that holds gas reserves of 16 trillion cubic feet.
  • From the field, the pipeline will run to Herat and Kandahar province of Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before ending at Fazilka (Punjab) in India.