Kochi: Bankers are hoping for major announcements in the budget for the sector, and their wish list includes measures to reduce bad loans and schemes to encourage digitization of financial transactions.
Expansion of digitization: This probably is the top one on the wish list. The sector expects a roadmap on furthering digitization by attracting the common man and small businesses to digital transactions. The sector believes that digitization would bring huge benefits to the economy.
Consolidation of state-run banks: The government is expected to continue with consolidation of state-run banks following the merger of the associate banks and Bharatiya Mahila Bank with State Bank of India. Even if there is no announcement on mergers in the budget, the sector expects the finance minister to give some indications towards that.
Sale of stake in state-run banks: The budget is expected to announce a plan to reduce government stake in state-run banks.
Continuation of recapitalization: The government in October announced a Rs 2.11 lakh crore recapitalization program for state-run banks. Of this, Rs 88,140 crore will be injected this fiscal year, it said last week. The budget is expected to explain the plan to infuse the remaining amount.
Reduction in non-performing assets: Bankers expect the budget to have strict but practical steps to reduce non-performing assets and clean up the balance sheet of banks.
Making fixed deposits more attractive: Even though fixed deposits with banks are seen as safer and enjoy customer trust, investment in debt mutual funds is more attractive in terms of tax treatment. Banker expect the budget to announce measure to correct this bias against bank deposits.
Making savings bank interest tax-free: It is expected that the finance minister will finally accept this long-standing demand of bankers and investors.
Reduction in lock-in period: Currently, the lock-in period is five years for tax-saving bank fixed deposits. The budget may propose to reduce it to three years.
E-KYC, e-signature to more services: The budget is expected to make announcements on these measures to help make banking more inclusive as well as advanced.
