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Banking Blog 1st Feb 2023

The Union Budget announcements are set to enhance credit growth for rural and MSME-focused lenders, providing much-needed support to the sector. Banking stocks have surged ahead of the Budget speech, indicating strong market confidence. Additionally, banks will observe ten holidays in February 2023, and measures to boost business in the GIFT IFSC have been introduced.

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51 views2 pages

Banking Blog 1st Feb 2023

The Union Budget announcements are set to enhance credit growth for rural and MSME-focused lenders, providing much-needed support to the sector. Banking stocks have surged ahead of the Budget speech, indicating strong market confidence. Additionally, banks will observe ten holidays in February 2023, and measures to boost business in the GIFT IFSC have been introduced.

Uploaded by

Kushagra Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Union Budget announcements to boost credit offtake for rural, MSME-focused

lenders
The slew of positive announcements for the MSME sector in the
Budget are expected to boost credit growth for rural and MSME-
focused lenders such as PSU banks, mid-sized private banks,
and NBFCs.
In addition to increasing credit flow to the fund-starved MSME
sector, which is still reeling from pandemic-induced challenges
and high commodity prices, this move will also give comfort to
banks that are reluctant to lend to MSMEs in the absence of
proper collateral, said Shantanu Bairagi, co-founder of Art fine.

Banking stocks are surging before FM Sitharaman's speech


As Finance Minister Nirmala Sitharaman about to start her Union Budget speech,
Dalal Street has gone highly bullish on banking stocks. Bank Nifty index has surged
around 450 points in early morning deals. Banking majors ICICI Bank, HDFC Bank,
Bank of Baroda, Kotak Mahindra Bank and Axis Bank shares have attracted strong
buying interest by market bulls in morning session on budget 2023 date.

Industrial credit growth slows down in December


Overall credit growth in the non-food credit of banks stood at 15.3% in
December compared to 17.6% in the previous month. The credit
growth came off the high of 18.3% in October. Total credit outstanding
to industry was close to `33 trillion, while overall non-food credit stood
at `132.5 trillion as of December 30, data from the Reserve Bank of
India (RBI) shows.

Banks to remain closed for 10 days in February 2023


Banks will remain closed for ten days in February 2023 including
weekends, according to the Reserve Bank of India’s holiday list. These
holidays include second and fourth Saturdays, as well as Sundays. The
central bank has placed the holidays under three brackets- Holidays
under the Negotiable Instruments Act; Holidays under the Negotiable
Instruments Act and Real-Time Gross Settlement Holidays; and Banks’
Closing of Accounts.
Budget announces host of measures to enhance business in IFSC
To enhance business activities in GIFT IFSC, Finance Minister Nirmala
Sitharaman on Wednesday announced a host of measures, including
establishing a subsidiary of EXIM Bank for trade re-financing and
allowing acquisition financing by IFSC Banking Units of foreign banks.

Private banks confident of sticking to FY24 margin guidance


A clutch of private sector banks expects net interest margins (NIM) to
flatten in the coming financial year, as the cost of deposits are likely to
go up and the impact of repo rate transmission on loan rates slows
down. However, these lenders are confident of holding their margins
within the range given in the guidance.

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