Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

Accelerated investments, interest subvention suggested to boost bank credit growth: Survey

Author: IANS/Wednesday, January 24, 2018/Categories: Banking & Financial Services

Accelerated investments, interest subvention suggested to boost bank credit growth: Survey

New Delhi, Jan 24 - Bankers have suggested accelerated investments and interest subvention for investments in long gestation infrastructure projects, along with lowering of corporate tax rate and minimum alternative tax (MAT) to boost credit growth, said a survey released on January 24.

The survey, by the Federation of Indian Chambers of Commerce & Industry (Ficci) and the Indian Banks' Association (IBA), also said bankers recommended that the government should allow a full tax deduction on the NPA provisioning as against the cap of 5 per cent of taxable income.

"The bankers have suggested specific measures that may be announced in the upcoming Union Budget to facilitate credit growth and investment pick-up in the economy. They recommend accelerated investments in infrastructure sector as well as interest subvention for investments in long gestation infrastructure projects," the survey said.

According to it, most of the responding banks have suggested a reduction in corporate tax rate from 30% to 25%, lowering of MAT rate to 15 per cent and enhancing tax deductions and exemptions for individuals.

"This should boost credit demand at both corporate and retail level," it said.

The sixth round of the survey was carried out for the period July to December 2017. A total of 19 public sector, private sector and foreign banks participated in the survey. These banks together represent 59% of the banking industry, as classified by asset size.

Bank credit has been growing at a slow pace in the economy.

The survey findings reveal that banking sector performance during the July-December 2017 period remains more or less similar to the previous six months on the parameters studied.

"Nearly 67% of the participating banks have maintained their credit standards for large as well as small enterprises. Out of the few who have tightened credit for large enterprises have cited a rise in NPAs or a risk of the asset turning into NPA as the main reason for their action," the survey said.

The share of corporate to retail loans also remains the same at 56:44 as noted in the previous round of the survey.

"58 per cent of the respondent banks reported a rise in NPAs, significantly lower than 80 per cent reporting so in the previous round of the survey indicating possible stability in credit environment," the survey revealed.

Following the repo rate reduction of 25 basis points by the Reserve Bank of India in August 2017, almost 84% of the respondents have reduced their MCLR (marginal cost based lending rate).

Banks have welcomed the recapitalisation plan of Rs 2.11 trillion for public sector banks and believe that it will help in boosting credit growth and subsequently growth recovery of the economy.

A large number of banks have also welcomed the RBI's move of constituting a high-level task force for setting up a public credit registry, the survey added.

Print Rate this article:
No rating

Number of views (154)/Comments (0)

Kavita Giridhar Mallya

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.