As we are closing in on the date of the Union Budget presentation, the banking sector is betting on policy continuity on infrastructure spend. The industry leaders and experts said that the Budget should announce policy changes and incentives that help move towards growth, bring financial stability, and support digitalisation. Yashraj Erande, Managing Director and Partner, BCG, said, “For India to become a $7 trillion economy, the financial services and fintech sector has a crucial multiplier role to play. We expect the pace of reforms to accelerate with the upcoming budget. The focus of the reforms has to be on creating more large scale balance sheets, infusing digital and AI in the financial services operating model to drive efficiency, with exceptional focus on governance and risk. Driving better partnerships between fintechs and unlocking more pools of domestic and global capital to fund these balance sheets plus technology will be crucial.”
Prashant Kumar, MD & CEO, YES Bank, said, “The government is expected to remain committed to the reforms process and be focused on eight key areas: sustainable growth, financial sector, infrastructure and investment, women, youth & farmers, last-mile connectivity, inclusive development, and economic expansion – all essential towards achieving ‘Viksit Bharat’ by 2047. At YES BANK, we are prepared to support the government’s push for enhancing digital infrastructure and promoting financial inclusion. This aligns with our commitment to bringing advanced banking services to underserved regions and supporting initiatives in green mobility, affordable housing, healthcare, and education. These efforts will not only spur economic growth but also ensure holistic development.”
The industry experts also recommended that the government should increase foreign direct investment (FDI) to boost capital in the sector. Vivek Iyer, Partner, Grant Thornton Bharat, said, “Given that India is a banking led economy, initiatives around liberalisation of foreign direct investment, rationalisation of foreign bank tax rates amongst others will help boost capital flows in the country, which will further accelerate the goals towards Amrit Kaal that the government set out for India.” Currently, 49 per cent of FDI in the banking sector is allowed under the automatic route and beyond that, government approval is required for private banks. In public sector banks, up to 20 per cent of FDI is allowed.
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Many also talked about taking actions towards divestment in banks and insurance. Per experts, privatisation of certain institutions could help bring in more investment…
Read More: Budget 2024 Expectations: Banking sector hopes for policy continuity;
