Highlights of Union Budget 2019-2020 -Banking and Financial Sector
Banking and Financial Sector
NPAs of commercial banks reduced by over Rs. 1 lakh crore over the last year.
Record recovery of over Rs. 4 lakh crore effected over the last four years.
Provision coverage ratio at its highest in seven years.
Domestic credit growth increased to 13.8%.
Measures related to PSBs:
Rs. 70,000 crore proposed to be provided to PSBs to boost credit.
PSBs to leverage technology, offering online personal loans and doorstep banking, and enabling customers of one PSBs to access services across all PSBs.
Steps to be initiated to empower accountholders to have control over deposit of cash by others in their accounts.
Reforms to be undertaken to strengthen governance in PSBs.
Measures related to NBFCs:
Proposals for strengthening the regulatory authority of RBI over NBFCs to be placed in the Finance Bill.
Requirement of creating a Debenture Redemption Reserve will be done away with to allow NBFCs to raise funds in public issues.
Steps to allow all NBFCs to directly participate on the TReDS platform.
Return of regulatory authority from NHB to RBI proposed, over the housing finance sector.
Rs. 100 lakh crore investment in infrastructure intended over the next five years. Committee proposed to recommend the structure and required flow of funds through development finance institutions.
Steps to be taken to separate the NPS Trust from PFRDA.
Reduction in Net Owned Fund requirement from Rs. 5,000 crore to Rs. 1,000 crore proposed:
To facilitate on-shoring of international insurance transactions.
To enable opening of branches by foreign reinsurers in the International Financial Services Centre.
Measures related to CPSEs:
Target of Rs. 1, 05,000 crore of disinvestment receipts set for the FY 2019-20.
Government to reinitiate the process of strategic disinvestment of Air India, and to offer more CPSEs for strategic participation by the private sector.
Government to undertake strategic sale of PSUs and continue to consolidate PSUs in the non-financial space.
Government to consider going to an appropriate level below 51% in PSUs where the government control is still to be retained, on case to case basis.
Present policy of retaining 51% Government stake to be modified to retaining 51% stake inclusive of the stake of Government controlled institutions.
Retail participation in CPSEs to be encouraged.
To provide additional investment space:
Government to realign its holding in CPSEs
Banks to permit greater availability of its shares and to improve depth of its market.
Government to offer an investment option in ETFs on the lines of Equity Linked Savings Scheme (ELSS).
Government to meet public shareholding norms of 25% for all listed PSUs and raise the foreign shareholding limits to maximum permissible sector limits for all PSU companies which are part of Emerging Market Index.
Government to raise a part of its gross borrowing program in external markets in external currencies. This will also have beneficial impact on demand situation for the government securities in domestic market.
New series of coins of One Rupee, Two Rupees, Five Rupees, Ten Rupees and Twenty Rupees, easily identifiable to the visually impaired to be made available for public use shortly.
Digital Payments
TDS of 2% on cash withdrawal exceeding Rs. 1 crore in a year from a bank account
Business establishments with annual turnover more than Rs. 50 crore shall offer low cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants.
Source:PIBNEWS
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