New Delhi | Jagran Business Desk: The Union Budget 2022 is scheduled to be presented on February 1 by finance minister Nirmala Sitharaman. The banking sector is expecting various reforms for the betterment of banks from this year's budget session. Here's are some of the expectations of the banking sector from Budget 2022.

Increasing the cap on foreign direct investments (FDIs)

According to Dr Arun Singh, Global Chief Economist, Dun & Bradstreet, as quoted by Zee News the government should consider allowing financial institutions to claim 100 per cent tax deduction for bad and doubtful debt provisions. This is necessary as stressed assets are expected to increase significantly.

Demand to reduce stake in public sector banks:

Policy measures to address the governance, management, and operational issues faced by public-sector banks are also expected, said Dr Arun Singh. He added that a roadmap to reduce the government’s stake in public sector banks and consolidation have been demanded.

However, according to the sources in the banking industry, as quoted by a Dainik Jagran report, the government could complete the work of privatization of public sector banks or insurance companies during this calendar year itself. It is almost certain that the amount that the public sector banks get from the budget every year will not be given this time. It is also possible that the government may try to bring some policy clarity in the budget regarding the entry of big corporate houses in the banking sector.

Digitalisation of Indian economy:

Archana Elapavuluri, Founder of Pickright Technologies, as quoted by Zee News said “On a macro-level, technology should help the government achieve the vision of transforming India into a digital economy. This change is necessary to improve the overall economic efficiency of the country by reducing the role of cash in economic transactions, and ensuring people have access to better financial services and credit.”

Posted By: Sugandha Jha