The document summarizes key points from India's banking sector budget. It notes that aggregate bank credit growth has slowed, but GDP growth is forecast to increase. Non-performing assets have risen for public sector banks but improved for private banks. The budget provides capital support to public sector banks and encourages lending to priority sectors like agriculture and affordable housing. It also aims to boost infrastructure funding and develop postal networks to drive financial inclusion.

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2. Introduction
• Since 1969 the banking sector has played an
important role in the economy.
• At present there are 26 nationalized banks
in our country.
• The present 64 trillion Indian banking
industry is governed by the banking.
regulation act 1949 & closely monitored by
the RBI.

3. Major Highlights of the Budget
• Due to sluggish growth of economy and risk aversion by
bank, Aggregate bank credit has gone up by 16.4%
during 2013 as compared to17.1% of 2012.
• GDP growth forecast an increase to 6.4% compared to
5.0%, 2012-13.
• Due to reduction in policy rates bank deposits are
expected to grow by 14-15% as compared to 13.3% in
2012.
• Net interest margin to decline by 10-15 bps
• Agriculture credit. Farmers who repay bank loans right
in time normally pay a subsidised rate of interest just at
4%.

4. Cont….
• Aggregate GNPA’s of all PSB’s increases to 3.9% as
compared to 3.0% dec,2011.
• GNPA’s of private banks improved by app ~18 bps to
1.9%.
• Expected GNPA of banking sector estimates to remain
between 3.4-3.6% by march 2014.
• Women bank-capital support of 1000 crore.
• Market borrowing plan-6.29lakh crore against 5.70lakh
crore.

5. Major Players of Banking Sector
• State Bank of India Ltd.
• Punjab National Bank Ltd.
• ICICI Bank Ltd.
• HDFC Bank Ltd.

6. Factors impacting the major players
• The budget proposed to provide 140 billion as capital
support to all PSB’s .
• Tax deduction of 1 lakh , interest paid on home loan Of
Upto 25lakh availed in 2013 for 1st time home buyers.
• 20 billion have been allocated to urban housing fund by
NHB’s .
• Banks have been directed to lend 7000 billion to agri
sector which is 21.7% higher than 2012.
• Banks are permitted to sell insurance product to
multiple companies to increase insurance penetration.

7. Cont…
• Investment of 49 billion to modernise the postal
networks.
• To mobilize the fund for estimated 55 trillion in
infrastructure the union budget encourages
setting up of more IDF’s.
• To increase household financial saving the union
budget proposes to introduce inflation index
bond.

8. Impact on Economy
•Increasing disposable income and increasing exposure to
a range of products, have led consumers towards a higher
willingness to take credit, particularly, young customers.
•Increasing spread of mobile banking, which is expected
to become the second largest channel for banking after
ATMs, will accelerate growth of the sector.
•Currently, in India, 41% of the adult population don’t
have bank accounts, which indicates a large untapped
market for banking players.
•The increase in GDP growth is expected to pull back the
economy on track.

10. QUERIES