Anand Adhikari, senior editor at Business Today lists down 5 key points government should consider for banking sector in Budget 2015-16.
- Recapitalisation of PSU banks: In view of Basel-III implementation and deteriorating asset quality, PSU banks require huge capital to remain relevant in business. The expectations are for capital infusion of Rs 20,000 crore in 2015-16.
- PSU disinvestment: There are expectations of aggressive disinvestment of PSUs by the government in 2015-16. HDFC Chairman Deepak Parekh has called for disinvesting stakes in large PSUs like LIC and BSNL.
- Banking reforms: There are many proposals pending with the government for reforming banks. The conversion of cooperative banks into full-fledged banks is one such proposal, which would go a long way in supporting financial inclusion.
- New monetary policy framework: Inflation targeting beyond January 2016 with a target of 4 per cent (+/- 2 per cent) and announcing the composition of monetary policy committee to decide the policy rates or interest rates.
- Setting up of a sovereign fund: The huge financing needs of infrastructure projects won't be bridged by banks or NBFCs. There are expectations of setting up a sovereign fund for raising resources for infrastructure projects.