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Bankers hail Budget 2018 says it addresses issues to push growth

By Vicky

The Budget has been hailed as a holistic document by the banking sector. While stating that the Budget has addressed issues to push growth, the sector has however flagged concerns on expenditure overturns.

Bankers hail Budget 2018 says it addresses issues to push growth

Largest lender State Bank chairman Rajnish Kumar said the Budget is "very comprehensive" with key measures that will have a positive impact on various segments, including tenant farmers, 10 crore poor families and senior citizens. "We believe all these measures will augur well for a meaningful growth in FY19," he said and listed specific proposals like national gold policy, integrating trade receivables platform with GSTN and maintaining government borrowings at the same level.

Budget 2018: Full text of Finance Minister Arun Jaitley's speech

ICICI Bank managing director Chanda Kochhar termed the Budget as a "responsible" one which balances the priorities, and also "holistic". "It's a very responsible balancing act which focuses on fiscal discipline on one hand and on the other, really looks taking into account all the social needs, infrastructure needs, growth and development needs of the economy," she told a TV station. She also welcomed the broader way of looking at the rural economy beyond the farm sector to include aspects like fisheries, agri-processing and rural infrastructure.

HDFC Bank flagged concerns on an "overrun" on the expenditure side and added the quantum of allocations for rural development also "seem very low". "Deterioration in quality of spending remains a concern. Deviation from the fiscal glide path is a risk and could trigger bond yields/interest rates spiral," its chief economist Abheek Barua said. State-run Bank of India's Dinabandhu Mohapatra termed it a visionary Budget which accelerates the path towards 8 per cent growth with necessary attention to small businesses, housing and rural infrastructure segments.

Key highlights of Budget 2018: Joy for agri sector, heartbreak for middle class

RP Marathe of Bank of Maharashtra said proposals like lowering the corporate tax on MSMEs to 25 per cent and focussed lending will help banks' credit growth and also private investment. Microlender-turned-universal bank Bandhan Bank's CS Ghosh said the FM addressed concerns on health, education and rural distress and MSMEs stand to gain the most from the same.

While the Budget speech did not have any specific new measure for lenders, there were comments to clean up dud loans problems for MSMEs, support lending to them under the Mudra scheme and also said that the capital infusion of Rs 80,000 crore this fiscal will help banks lend up to Rs 5 trillion. "The outreach it has managed to achieve cutting across the spectrum--rural and infra sectors, MSMEs, salaried, and retired classes--while staying on course with fiscal consolidation has struck a fine balance between the needs of growth, social development, and investor confidence which is a commendable achievement in my view," Standard Chartered's Zarin Daruwala said.

The national banking lobby IBA said the Budget has done a reasonable job of balancing populist imperatives and growth orientation. "Increased outlays on social objectives, including education, affordable housing, healthcare it has ticked all the right boxes in the pre-election year," IBA said.

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