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Informist, Tuesday, Nov. 26, 2024

 

--Banking secy: Rising digital frauds posing risk to fincl sector stability

--Banking secy: Govt agrees credit gap exists, PSU bks looking to bridge this

--CONTEXT: Banking secy Nagaraju at CII’s fincl inclusion, fintech summit

--Banking secy: PSU bks to launch new pdts in next few mos to improve credit

 

NEW DELHI – Public sector banks are set to launch new products in the next few months to improve credit in the economy, Department of Financial Services Secretary M. Nagaraju said Tuesday. "We are at a cusp where the private sector, especially the micro, small and medium enterprises are spending," he said.

 

Over the last few years, the government has already undertaken multiple steps to improve credit availability for small borrowers, including announcing a new credit model in the Budget for 2024-25 (Apr-Mar) to lend to borrowers with no past financial records. Irrespective of these reforms, Nagaraju said the department is aware of the credit gap in the economy. While the private sector, too, has a role to play, the banking secretary said that state-owned banks will drive the endeavour to bridge this gap in the system.

 

Though the banking sector is robust, Nagaraju said that rising digital frauds pose a risk to financial sector stability. Digital innovation and financial literacy will help mitigate this, he said.

 

Speaking on the sidelines of the Confederation of Indian Industry's Financial Inclusion and Fintech Summit, Nagaraju also said that the Banking Amendment Bill, tabled in the Parliament in the monsoon session, will likely be moved in the ongoing winter session. The amendments aim to bring changes to banking regulations, including redefining substantial interest for directors, increasing the number of nominees for bank deposits, and changes in compliance reporting dates. Of the three amendments that are proposed, the first pertains to raising the number of nominees to claim fixed deposit in case of the account holder's death to four from the current one. This is aimed at reducing unclaimed deposits in banks.

 

The second amendment is about increasing the "substantial interest" for directors, which the Banking Regulation Act defines as "holding of a beneficial interest by an individual or his spouse or minor child, whether singly or taken together in the shares thereof, the amount paid-up on which exceeds 5 lakhs (500,000 rupees) or 10% of the paid-up capital of the company, whichever is less." The official said the proposal is to increase the limit of substantial interest of directors to INR 20 million, or 10% of the paid-up capital. The other amendment proposes to change banks' reporting dates for various compliances to the 15th and 30th of the month from the current second and fourth Friday. End

 

Reported by Priyasmita Dutta

Edited by Namrata Rao

 

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