Jul 11 2014 : The Economic Times (Bangalore)
BUDGET AT A GLANCE : BANKING - ON THE CAPITAL EXPRESS
There's no big-bang reform in banking, but the seeds have been sown to help the industry become robust after years of struggle.
Capital raising, consolidation and debt recovery tribunals are among the key budget elements
1950: MAROONED IN MARACANA Who wants the luck of Moacir Barbosa? Not Indian banking, by any means. The Brazilian goalie was scapegoated when he wasn't able to save a strike from Uruguay's Alcides Ghiggia. Brazil lost 2-1 and Uruguay became the toast of the world.
Capital raising, consolidation and debt recovery tribunals are among the key budget elements
1950: MAROONED IN MARACANA Who wants the luck of Moacir Barbosa? Not Indian banking, by any means. The Brazilian goalie was scapegoated when he wasn't able to save a strike from Uruguay's Alcides Ghiggia. Brazil lost 2-1 and Uruguay became the toast of the world.
BONA FIDE CHIT FUNDSMeasure Bridging Regulatory Gap Impact This step will protect investors who are being duped by money circulating schemes. A change in the Act would also protect unsuspecting agents who work for pyramid marketing schemes to earn high commissions, which are unsustainable. The present Act does not distinguish a pyramid marketing scheme from a bonafide agency.
SMALL CUSTOMERS
Measure Differentiated Banks Impact More small banks in niche areas may come up serving small customers who have been ignored by bigger ones. These banks could be a thorn for bigger ones if they begin to attract depositors. Local area banks would serve farmers and migrant workforce.
MONEY MATTERS
Measure A Modern Policy Framework Impact There could be a fundamental change in the way monetary policy is conducted in India. The RBI may move towards a formal inflation target as a prime monetary policy goal as suggested by the Urjit Patel committee. Besides, it may look at consumer price inflation as a formal benchmark.
AT SESSION
Measure 6 New Debt Recovery Tribunals Impact This will result in quicker recovery and reduce the cost of funds for banks.
Currently, each DRT handles a large number of cases. A state that does not have a tribunal usually transfers the case to be heard in the neighbouring state's tribunal.
MERGER MANIA
Measure Promoting Consolidation Impact SBI could be the biggest beneficiary of it with its plans to merge subsidiaries.
Some of the regional banks may get absorbed into bigger ones such as Punjab National Bank and Bank of Baroda. But there needs to be caution and the government should consider unions' reaction.
RURAL INFRA PUSH Measure Rural Infra Development Fund Impact Foreign banks, which often fail to meet priority sector lending targets, can make up for the shortfall by investing more in such funds. Nabard, which operates the scheme, will have more resources in funding rural projects.
SMALL CUSTOMERS
Measure Differentiated Banks Impact More small banks in niche areas may come up serving small customers who have been ignored by bigger ones. These banks could be a thorn for bigger ones if they begin to attract depositors. Local area banks would serve farmers and migrant workforce.
MONEY MATTERS
Measure A Modern Policy Framework Impact There could be a fundamental change in the way monetary policy is conducted in India. The RBI may move towards a formal inflation target as a prime monetary policy goal as suggested by the Urjit Patel committee. Besides, it may look at consumer price inflation as a formal benchmark.
AT SESSION
Measure 6 New Debt Recovery Tribunals Impact This will result in quicker recovery and reduce the cost of funds for banks.
Currently, each DRT handles a large number of cases. A state that does not have a tribunal usually transfers the case to be heard in the neighbouring state's tribunal.
MERGER MANIA
Measure Promoting Consolidation Impact SBI could be the biggest beneficiary of it with its plans to merge subsidiaries.
Some of the regional banks may get absorbed into bigger ones such as Punjab National Bank and Bank of Baroda. But there needs to be caution and the government should consider unions' reaction.
RURAL INFRA PUSH Measure Rural Infra Development Fund Impact Foreign banks, which often fail to meet priority sector lending targets, can make up for the shortfall by investing more in such funds. Nabard, which operates the scheme, will have more resources in funding rural projects.
No comments:
Post a Comment