Budget 2014: What’s in it for financial service sector?
10/07/2014 17:38
Finance Minister Arun Jaitley, while presenting the Union Budget in Parliament today unleashed several financial sector reforms. To begin with FM Arun Jaitley spoke of a new financial inclusion plan, called Sampoorn Vittiyea Samaveshan (SVS), to bring banking services to 10 crore uncovered households. The main objective of SVS is to open 20 crore new bank accounts within a span of one year. Also, in order to empower weaker sections, FM said that there should be two bank accounts for each uncovered household. Finance Minister also spoke of providing greater autonomy to public sector banks and added that they would require Rs 2.40 lakh crore fresh capital infusion by 2018 to meet global Basel III norms. The government is planning to raise the required money by making public offers to the retail customers. FM has given incentives to the banks to give long-term loans to infra projects without restrictions on CRR/SLR. Banks can also borrow long-term funds in the bond market to lend for long-term. In a step taken to speed up the recovery of bad loans, six new debt recovery tribunals were proposed by the FM at Chandigarh, Bengaluru, Ernakulum, Dehradun, Siliguri and Hyderabad. For venture capital in the MSME sector, FM spoke of setting up a Rs 10,000 crore fund to attract private Capital by way of providing equity, quasi equity, soft loans and other risk capital for start-up companies. Another major announcement by Arun Jaitely was the relief proposed to the capital-starved private insurance sector. He suggested raising the FDI cap in the insurance sector from 26 per cent to 49 per cent. The move could also enable listing of a few insurers.
10/07/2014 17:38
Finance Minister Arun Jaitley, while presenting the Union Budget in Parliament today unleashed several financial sector reforms. To begin with FM Arun Jaitley spoke of a new financial inclusion plan, called Sampoorn Vittiyea Samaveshan (SVS), to bring banking services to 10 crore uncovered households. The main objective of SVS is to open 20 crore new bank accounts within a span of one year. Also, in order to empower weaker sections, FM said that there should be two bank accounts for each uncovered household. Finance Minister also spoke of providing greater autonomy to public sector banks and added that they would require Rs 2.40 lakh crore fresh capital infusion by 2018 to meet global Basel III norms. The government is planning to raise the required money by making public offers to the retail customers. FM has given incentives to the banks to give long-term loans to infra projects without restrictions on CRR/SLR. Banks can also borrow long-term funds in the bond market to lend for long-term. In a step taken to speed up the recovery of bad loans, six new debt recovery tribunals were proposed by the FM at Chandigarh, Bengaluru, Ernakulum, Dehradun, Siliguri and Hyderabad. For venture capital in the MSME sector, FM spoke of setting up a Rs 10,000 crore fund to attract private Capital by way of providing equity, quasi equity, soft loans and other risk capital for start-up companies. Another major announcement by Arun Jaitely was the relief proposed to the capital-starved private insurance sector. He suggested raising the FDI cap in the insurance sector from 26 per cent to 49 per cent. The move could also enable listing of a few insurers.
