There is also talk of creating a new Development Finance Institution (DFI) in the budget.
The banking sector has high expectations from the upcoming budget on 1 February. What can and should happen in the budget for the banking sector. On this, former Deputy Governor of RBI SS Mundra (SS Mundra) spoke to CNBC-Awaaz. It emerged from this conversation that in this budget, the proposal to create a bad bank can be approved. The bad bank will buy NPA and do the recovery work. Bad bank will help in privatization of PSU banks.
There is also talk of creating a new Development Finance Institution (DFI) in the budget. The National Bank for Financing lnfra bill is also expected. For this, provision of 1 lakh crore Authorized Capital is possible.
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In this budget, the bankrupted project can get tax rebate. These exemptions can be in the form of exemption from Capital Gains Tax and Stamp Duty. Real estate and infra projects may get relief. There is preparation for privatization of some public sector banks, which can be seen in the budget. Public capital investment is possible to PSBs.
There may be a provision of 25 thousand crores in the 2021 budget. In the current year banks have received 20 thousand crores from the government. The government has infused 2.65 lakh crores in banks during the financial year 2018-20. Government stake in banks can be brought under the holding company. The idea is to create a holding company for regional rural banks as well. This budget will focus on asset quality of banks.
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