Leading bankers cheered the Union Budget 2010-11, especially the steps taken on farm loan repayment, capital infusion in PSBs and interest rate funding to underprivileged sections, saying that these would improve the health of the system.
State Bank of India’s chief financial officer, S S Ranjan, said that the budget was geared towards growth and has brought new life in the banking industry, especially by way of capital infusion in weak banks and increasing the repayment tenure.
Ranjan said, “Giving more time for farmers to repay loans is definitely good news for banks as this will provide more time for banks for recovery and thus help reduce chances of more defaults”.
The government also increased the interest rate financing of crop loans from 1% to 2% and opted to stick with the rate funding for certain exports divisions for another year.
Abhijit Sen, Citibank’s Chief Financial Officer said “This is, in a way, a continuation of stimulus package to weaker sections. The measure will help to mitigate banks’ cost of funds and significantly reduce the threat of more slippages in their portfolios,”.
ICICI Bank’s Managing Director and CEO, Chanda Kochhar said the budget is geared towards improving the growth story of economy and was targetted at fiscal consolidation in the economy.
She said, “The increase in the excise duty and removal of certain exemptions on the indirect tax front…are in line with the Government’s articulation of focusing on fiscal consolidation”. ABN Amro’s Country Head, Meera Sanyal , said that the planned Rs 16,500 crore infusion into state-run banks reassets the fact that Government is serious about the financial sector and wants to strengthen it.
HSBC’s India Chief Executive, Stuart A Davis, also cheered the budget calling it as beneficial for the banking industry. He said, “There is no negative sign for the banking community. The allocation of funds for PSU banks is positive for future growth and towards its customers”.
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