Think out of box: Arun Jaitley to banks

Noting that the banking sector is the backbone of India's economy, Arun Jaitley said he "does not see any serious challenges as far as structural changes are concerned".

New Delhi, Dec 20 Finance Minister Arun Jaitley on Tuesday exhorted banks to think "out-of-box" while doing business and dealing with challenges, and said the forthcoming Union Budget, the first after demonetisation, should focus on boosting the consumption to create demand.

"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," Jaitley said during his customary pre-budget meeting with bankers according to a release by the Finance Ministry.

Noting that the banking sector is the backbone of India's economy, Jaitley said he "does not see any serious challenges as far as structural changes are concerned".

The bankers, in turn, sought full tax exemption for provisioning for non-performing assets (NPAs), or bad loans, in view their profitability and demanded a Central Registry for GST registration for banks having branches across the country.

"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 needs to be given to them under the Income Tax Act so that they have a decent income through their deposits," the statement said referring to the bankers' demands.

"It was informed that the overall mood about demonetisation in rural areas, including among farmers, is largely positive," it said.

"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 the South," it added.

IANS