Appreciating the Budget, Prime Minister Narendra Modi said, “Union Budget 2015 is a Budget with a clear vision. It is a Budget that is progressive, positive, practical, pragmatic and prudent.”
Here are the key steps taken for banking and finance sector:
Plan to inject $1.3 billion into state banks in FY16
Government plans to infuse 79.4 billion rupees ($1.29 billion) of capital into state-owned lenders during the fiscal year to March 2016, the annual budget showed.
Govt to set up Micro Units Development Refinance Agency or Mudra Bank for SC/ST entrepreneurs
The government will set up Mudra Bank with an initial corpus of Rs 20,000 crore to provide credit facilities to SC/ST businesses.
“I propose to create a micro units development refinance agency, Mudra Bank with a corpus of Rs 20,000 crore and credit guarantee corpus of Rs 3,000 crore,” he said while presenting the Union Budget 2015-16 in Parliament. “The Mudra Bank will refinance institution through a Pradhan Mantri Mudra Yojana. The lending priority will be given to SC/ST enterprises.”
Non-bank financial companies (NBFCs) with more than Rs 500 crore to come under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act
The Act allows a lender to recover non-performing assets without court’s intervention. With the inclusion of NBFCs under the act, these institutions will now be able to better manage their loan assets.
Total Investment in infrastructure go up by nearly 70,000 crore
With substantial increase in infrastructure spending, credit demand may pick up in the coming quarters.
Postal Department to use its network for proposed Payment Bank
“Government proposes to utilise vast postal network with nearly 1.55 lakh points of presence across villages of the country,” Jaitley said while presenting the Budget in Parliament. “I hope postal department will bring the proposed Payment Bank venture successfully so that it can contribute in Pradhan Mantri Jan Dhan Yojana.”
Finance Minister Arun Jaitley proposes autonomous banks board bureau
“The Bureau will search and select heads of public sector banks and help them in developing differentiated strategies of capital raising plans to innovative financial methods and instruments,” he said while presenting the Budget.