Arun Jaitely met bankers at the pre-budget meeting to discuss the financial challenges after notes ban.
New Delhi:
As state-owned banks sought higher capital support from the government to resolve a massive cash crunch post ban the November 8 ban on 500- and 1,000-rupee notes, Finance Minister Arun Jaitley asked the banks to think out of the box to deal with the challenges.
"The current Financial Year is not a conventional year as many major reformative decisions have been taken during the year. There is need for out of box thinking as series of steps are required about what the Government can do and what the banks can do," Mr Jaitley said during the customary pre-budget meeting where bankers sought full tax exemption for NPA provisioning in view their profitability and demanded a Central Registry for GST registration for banks having branches across the country.
Stating that the banking sector is the backbone of our economy, Mr Jaitley said he "does not see any serious challenges as far as structural changes are concerned".
PSU banks on their part suggested that there is need for recapitalisation of banks in the current financial year as well as in the next Financial Year 2017-18.
"Post-demonetisation, liquidity in banks has improved. This may impact saving deposit rates. This makes senior citizens more vulnerable as their income is adversely affected. So, some sort of exemption need to be given to them under the Income Tax Act so that they have a decent income through their deposits," the banks demanded.
Pitching for incentives for digital transaction infrastructure, bankers suggested that there is need for exempting Banking Correspondents transactions from service tax.
It was informed that the overall mood about demonetisation in rural areas, including among farmers, is largely positive.
However, four sectors need special attention. These includes vegetable growers who depend on cash for their day to day dealings and cannot hold their crop for long as it is perishable, transport industry in rural India, and plantations in South.
It was suggested that there is urgent need for special efforts for digitisation of Primary Agriculture Cooperative Societies, Regional Rural Banks and Cooperative Banks to promote digital transactions and e-payments.
Emphasising that dairy sector has huge potential for employment generation, creation a new Dairy Infrastructure Development Fund for the purpose was suggested.
"The current Financial Year is not a conventional year as many major reformative decisions have been taken during the year. There is need for out of box thinking as series of steps are required about what the Government can do and what the banks can do," Mr Jaitley said during the customary pre-budget meeting where bankers sought full tax exemption for NPA provisioning in view their profitability and demanded a Central Registry for GST registration for banks having branches across the country.
Stating that the banking sector is the backbone of our economy, Mr Jaitley said he "does not see any serious challenges as far as structural changes are concerned".
PSU banks on their part suggested that there is need for recapitalisation of banks in the current financial year as well as in the next Financial Year 2017-18.
"Post-demonetisation, liquidity in banks has improved. This may impact saving deposit rates. This makes senior citizens more vulnerable as their income is adversely affected. So, some sort of exemption need to be given to them under the Income Tax Act so that they have a decent income through their deposits," the banks demanded.
Pitching for incentives for digital transaction infrastructure, bankers suggested that there is need for exempting Banking Correspondents transactions from service tax.
It was informed that the overall mood about demonetisation in rural areas, including among farmers, is largely positive.
However, four sectors need special attention. These includes vegetable growers who depend on cash for their day to day dealings and cannot hold their crop for long as it is perishable, transport industry in rural India, and plantations in South.
It was suggested that there is urgent need for special efforts for digitisation of Primary Agriculture Cooperative Societies, Regional Rural Banks and Cooperative Banks to promote digital transactions and e-payments.
Emphasising that dairy sector has huge potential for employment generation, creation a new Dairy Infrastructure Development Fund for the purpose was suggested.
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