Budget Analysis Of Banking Sector

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Budget Analysis Of Banking Sector

  1. 1. Our Challenges<br />First challenge now is to quickly revert to 9 percent growth and then aim for double digit growth; need to make recovery more broad based<br />Second challenge is to make growth more inclusive; have to strengthen food security<br />Third challenge is to overcome weakness in government's public delivery mechanism; a long way to go in this.<br />
  2. 2. Banking Dilemma <br />Apex level financial stability council to be set up for banking sector<br /> Indian Banking Association to give additional licenses to private players.<br />Provision for further capital for  Regional Rural Banks (RRBs).<br />
  3. 3. 16,500 crore to Public sector Undertaking (PSU) banks so as to maintain their Capital Adequacy ratio (CAR) in tier 1 (8%)<br />Nothing for re-capitalisationof Indian banks(non-performing assets (NPAs))<br />Formalize a symbol for the Indian rupee<br />Foreign investment reform usher in more funds to the financial services industry<br />RFID Banking Scenario (Radio Frequency Identification)<br />Extend repayment of the loan amount by farmers from December 31, 2009 to June 30, 2010. <br />
  4. 4.  Interest rate subsidy of 1% for home loans less than 10L (on property less than 20L) to continue for 1 more year.<br />Farm Credit is being raised to Rs.3,75,000 crorefrom Rs.3,25,000 crore.<br />Swavalambaninitiative –government contributes Rs.1,000 per year to each New Pension Scheme (NPS) for 3 years.(Unorganised Sector)<br />Loan Waiver scheme, is entitled to a waiver of 25 per cent of the amount due, on the condition that he repays the remaining 75 per cent.<br /> Rs.1,900 crore for Unique Identification Authority of India<br />
  5. 5. SWOT Analysis-After Licensing<br />
  6. 6. Norms/ Hurdles for Licensing<br />Open branches in the rural areas for the first two years.<br /> Spread will depend on the basis of their direct lending to agriculture sector, opening of no-frills accounts<br />Setback for companies such as Reliance Capital, Mahindra, Cholamandalam and Tata Finance Norms a setback for new entrants<br />

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