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When the government is going out there, it is our dharma to lend actively and prudently, said Uday Kotak, vice chairman and managing director of Kotak Mahindra Bank.
Small ticket loans growing at over 25 percent per year, said V Vaidyanathan, CEO of IDFC First Bank. We expect demand for large ticket loans to pick up as sentiment revives, he said.
The message I have got is consumption is increasing, and that by the festive season, demand will improve andit will motivate our economy to move in a fast rate. Things will look up, and pep up the other sectors: FM Sitharaman.
Nothing stopping us from linking deposit rates to external benchmark. I think private investment, both domestic and abroad, should pick up with the reduction in cost of capital, and banks will look to underwrite the appropriate projects, said Uday Kotak.
We feel that this is a huge opportunity to use this outreach programme to make use of the surplus liquidity we have, said Uday Kotak.
I have received a request to raise the affordablehousing scheme limit up to Rs 50 lakh from Rs 45 lakh: FM Sitharaman.
The service sector is showing very high appetite for credit, and since it contributes to more than 50 percent, there is immense possibility to reach out to them: FM Sitharaman.
Commercial vehicle related problem is seen as a cyclical problem. Private bankers and NBFCs feel that it will be taken care of in one or two quarters. Passenger vehicles demand is largely sentiment related, which should weather over. Any problem in liquidity would be seen in wholesale financing: FM Sitharaman.
The small finance banks seem to be going on a smooth map: FM Sitharaman.
I have not heard liquidity as a problem from any of those present, said FM Sitharaman.
The first round of the outreach programme will take place in 250 districts from October 3 to Obtober 7, and will work with NBFCs, HFCs to leverage the liquidity, said Rajeev Kumar.
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Among the other announcements made by Finance Minister Nirmala Sitharaman in September, she announced a special window worth Rs 10,000 crore for last-mile funding of non-NPA and non-NCLT housing projects on September 14. This will provide relief to homebuyers stuck in incomplete projects totalingnearly3.5 lakh unitsacross the country.
FM Sitharaman meeting's agenda
The Corporate Affairs Ministry, headed by Sitharaman, isconsidering a special window under the Insolvency and Bankruptcy Code (IBC) to allow for some special action like insolvency and liquidation of NBFCs, say reports. Currently, they do not come under the ambit of the IBC. These measures might be discussed in the light of certain NBFCs defaulting on their interest payments to banks, which has caused a liquidity crunch. This could also be a point of discussion in the meeting.
FM Sitharaman meeting private banks, NBFCs
Finance Minister Nirmala Sitharaman is expected to brief the media after her meeting with members of the banking sector and a few housing finance companies and non banking finance companies (NBFCs). Reportssay that the agenda of the meeting includes credit disbursal, liquidity issues and rate cut. Various banks such as Axis Bank, Kotak Mahindra Bank, HDFC Bank and ICICI Bank are said to be meeting the Finance Minister.
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The spectre of fiscal slippages awaits the country after the massive tax giveaways, which though will boost the sputtering growth engine and is positive from a long-term perspective, warned analysts. The government has pegged the fiscal impact of the 10 percentage points cut in corporate tax worth Rs 1.45 lakh crore in revenue foregone, is 0.7 percent of GDP.The Budget has pegged fiscal deficit at 3.3 percent of GDP for FY20 and the government has already crossed 77 percent of that in the first four months itself. The measures come a day after the RBI had said the government does not have any fiscal space for initiating growth-friendly measures.
FM Sitharaman slashes corporate tax rate on September 20
In a major fiscal booster, the government, on September 20,slashed effective corporate tax to 25.17 percent inclusive of all cess and surcharges for domestic companies. She said the new tax rate will be applicable from the current fiscal which began on April 1 and is being done to promote investment and growth.The government has also decided to not levy enhanced surcharge introduced in the Budget on capital gain arising from sale of equity shares in a company liable for securities transaction tax. Also, the super-rich tax will not to apply on capital gains arising from sale of any security including derivatives in hands of foreign portfolio investors. In another relief, the minister said listed companies which have announced buyback of shares prior to July 5, will not be charged with super-rich tax.
Roundup of FM's 37th GST Council announcements
Finance Minister Nirmala Sitharaman on September 20 announced several revisions to the goods and services tax (GST) rates following the 37th GST Council meeting. Several decisions taken were aimed at promoting tourism. The Council approved a cut in tax rates on rooms with a tariff of Rs 7,500 and above to 18 percent and those with tariff below Rs 7,500 to 12 percent.GST on room tariff below Rs 1,000 has been scrapped. Sitharaman, however, made no mention of any rate cuts in the auto sector except aGST cess on 10-13 seater passenger vehicles (PVs) that has been cut to 1-3 percent. Read more.
Finance MinisterNirmalaSitharamanis expected to brief the media after her interaction with members ofthe banking sector. Sheis expected to announce measures to boost the economy, which has hit a six-year low.
