Budget 2019: Rs 70,000 crore for PSBs among top announcements in banking sector

Finance Minister Nirmala Sitharaman on Friday announced that Rs 70,000 crore would be given to the public sector banks to boost their capital and credit capacity. "Public sector banks will be provided Rs 70,000 crore to boost capital and improve credit," said Sitharaman, while presenting the Union Budget 2019-20 in the Lok Sabha on Friday.

"For purchase of high rated pooled assets of financially sound NBFCs amounting to a total of Rs 1 lakh crore during the current financial year, government will provide one time six-month partial credit guarantee to PSBs for first lot of up to 10 per cent," Finance Minister Nirmala Sitharaman said in her maiden Union Budget 2019-20.

She said NBFCs are playing an important role in sustaining credit demand and maintaining capital formation in small and medium industrial segment. The government has recovered non-performing assets (NPAs) worth Rs 4 lakh crore over the past four years, Finance Minister Nirmala Sitharaman said on Friday. In the past one year, NPAs worth Rs 1 lakh crore has been recovered, she said while presenting the first full-fledged Union Budget of Narendra Modi 2.0 government in Parliament.

Here are some major announcements of banking sector made in Budget 2019:

* Government will pump in 70,000 crore into public sector banks (PSBs) to strengthen them and enhance their lending capacity.

* STT to be limited to gap between settlements, strike price

* Propose some leeway in Securities Transactions Tax

* Propose to implement steps to make tax compliance easier

* Bad loan tax norms for most NBFCs at par with banks

* To start scheme for foreign cos in advanced technology sector

* To start scheme to invite foreign cos in sunrise sectors

* To let all NBFC to participate in trade receivable platform

* Propose to return regulation over housing fin cos to RBI

* Propose more power to RBI over NBFCs in Finance Bill

* One-time, six-month guarantee to PSU banks to buy some NBFC loans

* Fundamentally sound NBFCs should get funding from banks, MFs

* To undertake steps to improve governance in PSU banks

* Provision coverage ratio of banks highest in 7 years

* Six PSU banks enabled to come out of prompt corrective action

* To start raising part of borrowing from external market in FX

* To boost retail participation in CPSE ETFs

* To offer ETF participation via ELSS-like system

* Setting divestment target of Rs 1.05 trillion rupees for FY20

* Govt to reinitiate process of Air India divestment

* Mulling below 51% stake in PSUs on case-to-case basis

* To raise cap on foreign shareholding in some PSUs

* Steps to separate NPS Trust from PFRDA

* Financial gains from cleaning banking sector now visible

* FDI inflows remain robust despite global headwinds

* Important to increase retail invest in T-bills

* To work with regulators for AA bonds as collateral for repo

* Propose to rationalise existing KYC norms for FPIs

* To put in place action plan to deepen long-term bond market

* To create payment platform for MSMEs

* To allow FPIs to subscribe to listed debt papers of REITs

* Propose to merge NRI, FPI investment scheme routes

* To mull hiking FDI limit in media, insurance, animation cos

* Propose 100% FDI in insurance intermediaries

* To examine suggestions to further open up FDI in aviation

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