Mumbai: Adhering to the re-capitalisation target of Rs 10,000 crore along with a commitment to do more, focus on public spending in absence of private investments and efforts to help in NPA fight today led bankers to welcome the Budget.
Describing the Budget as "balanced", Chanda Kochhar of ICICI Bank said the FM has tried to "provide a growth impetus" while maintaining fiscal prudence. "He has comprehensively addressed all areas of socio-economic priority — farmers, poor and under-privileged, infra development and strengthening of the financial sector," she said.
Dena Bank's Ashwani Kumar welcomed the Rs 10,000 crore capital infusion along with explicit commitment to do more as a "morale booster" for the sector, saying banks are in "dire" need of capital for credit growth and compliance with the Basel-III framework.
"There are many positives for banks like the balance between need to spend and maintain fiscal discipline," Axis Bank's Shikha Sharma said. She also said infra investments in the absence of private sector investments with a focus on the rural pockets is also a positive, along with the stress on housing and simplification of taxes.
The increase in allowable provision for NPAs from 7.5 to 8.5 per cent, which will reduce the tax liability for the banks, was also welcomed by the sector. "A positive for the banking sector, thrust has been accorded to evolving a swifter and effective resolution mechanism. Provision for NPAs to avail tax benefits has been raised," Bank of India's Melwyn Rego said.
The move to allow listing and trading of security receipts on exchanges which has the potential to enhance the capital flows into securitization industry and help in the war on NPAs, was also welcomed by the lenders.
The bankers also hailed the overall Budget. "The Budget is pragmatic, focuses on tax compliance, improves the ease of doing business, brings about a transformative shift in governance and is expected to broad-base the growth story," Rego said.
The moniker TEC given by Jaitley to 'transform, energise and clean' found appreciation from at least two private sector bank heads — Shyam Srinivasan of Federal Bank and and Rana Kapoor of Yes Bank. The adherence to the fiscal roadmap, with a target of narrowing the gap down to 3.2 per cent, is also a welcome step, Axis Bank's Sharma said.
