Five key areas in banking Budget 2015-16 should focus on

Anand Adhikari, senior editor at Business Today lists down 5 key points the government should consider for banking sector in Budget 2015-16.

twitter-logo Anand Adhikari        Last Updated: February 24, 2015  | 09:49 IST
Five key areas in banking Budget 2015-16 should focus on

Anand Adhikari, senior editor at Business Today lists down 5 key points government should consider for banking sector in Budget 2015-16.

 

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

 

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