The Union finance ministry has agreed to banks’ long-standing demand for commission for Direct Benefits Transfer (DBT) transactions. The move will boost lenders’ fee income and make account opening, under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) viable. The account opening cost is Rs 140 per account.
Also, banks have to pay Rs 780 crore to the 120,000 business correspondents annually. In addition, there are other costs. Industry analysts said that receiving commissions for DBTs will also incentivise lenders to open accounts under the PMJDY scheme.
Banks have also been directed to provide overdraft facility of Rs 5,000 if an account opened under the PMJDY scheme performs satisfactorily for six months. Bankers have requested the government to cover the overdraft facility under the credit guarantee scheme which will protect banks from these accounts turning NPA. Overall, the commission income will incentivise account opening which will help these banks in long term in the form of higher deposits and credit opportunity. Positive mainly for PSU banks like SBI, BOB, BOI, Canara Bank, etc. from medium term perspective.
India’s sovereign rating upgrade likely in 2015: Deutsche Bank report
“We assign a high likelihood of a sovereign ratings upgrade for India as most macro indicators have exhibited improvements in past two years,”.
“The Sensex may reach to the level of 33,000 by the end of the current calendar year. We are setting year-end (December 2015) Sensex target at 33,000 (imputed Nifty target of 9,936), implying an upside of 23 per cent from current levels,” . “Key risks for the country’s economy are more external than domestic ones in nature,” DB vice president Abhishek Saraf said adding, “We do see four areas of risks haunting the growth of the country’s economy.”
Economy on right track; FY17 GDP could rise to 7%: Macquarie
“We believe the Indian economy is moving on the right track towards a cyclical and structural upturn and policymakers have been taking the right steps to improve productivity,” Macquarie said in a research note.
“We remain optimistic about the ability of the government to undertake structural reforms and improve the productivity dynamics that will help India move to a higher growth path in the medium term,” Macquarie said. “Overall, we expect GDP growth to pick up from 5.4% in FY15 to 6.5% in FY16 and further to 7% in FY17,” it added.