BFSI Industry Shares Expectations from New Government

With the formation of the new government and the assignment of ministries to Union Cabinet Ministers, the BFSI (Banking, Financial Services, and Insurance) industry has begun to express its hopes and expectations. Leaders from banks, non-banking financial companies (NBFCs), and insurance companies have outlined their key requests.

Top bankers in India are eagerly awaiting the government’s final decision on the divestment of Public Sector Banks (PSBs). They also hope the government will work on reducing the fiscal deficit and interest rates and introduce measures to boost credit growth, especially for small and medium-sized enterprises (SMEs).

Madan Sabnavis, a veteran banker and economist, emphasized that reducing the fiscal deficit is the primary expectation from the banking sector. A lower fiscal deficit would decrease the government’s borrowing needs, freeing up more resources for lending to the private sector. Additionally, it would help in maintaining lower interest rates.

“Tax benefits, such as increasing savings in time deposits as part of income deductibles, would encourage savings growth and help banks attract more deposits,” said Sabnavis, who is the Chief Economist at Bank of Baroda.

He also noted that the government has already provided a long-term perspective on PSB divestment. The banking sector is now keenly interested in the final decisions and progress on this matter.

The BFSI industry believes that if these expectations are met, it would lead to a healthier economic environment, promoting growth and stability in the financial sector.