Public sector banks in India are stable now, says Sitharaman

India’s public sector banks are stable now after the prompt corrective actions (PCA) when it was caught in turbulence, said Union Finance Minister Nirmala Sitharaman.

Speaking at the Tamilnad Mercantile Bank’s (TMB) centenary celebrations in Tuticorin in Tamil Nadu on Sunday, Sitharaman said prior to 2014, the public sector banks were facing various problems.

The public sector banks were laden with huge non-performing assets (NPA) which was a serious concern for the future of the banking sector itself.

Sitharaman said a problem in the banking sector would impact the entire economic activity.

According to her, the government infused additional capital into public sector banks.

It was then prompt corrective action was taken and the public sector banks are back on the rails now, she said.

Even as the banking sector was in turbulence, TMB was carrying out its business efficiently, Sitharaman added.

Appreciating TMB, which was started as a Nadar community bank in 1921 and now gained universal acceptance, Sitharaman said the way forward is digitisation.

She said technology related solutions take away a lot of other problems. And even without a branch in a place, banking services can be offered now through digitisation.

Referring to TMB’s deposit base of Rs41,000 crore and advance portfolio of Rs32,000 crore, Sitharaman said: “If that is the rapidity with which you are using the money to make more businesses work, it is possible to be more efficient if you adopt complete technology related solutions.”

According to her, using financial technology one can cross populate data and one can assess credit rating which is possible only with digitisation.

According to KV Rama Moorthy, MD & CEO, TMB, as a part of their Centenary celebrations, the bank is kick-starting multiple initiatives, starting with the issuance of a special postage stamp and postal cards.

Meanwhile the Central Board of Direct Taxes (CBDT) has issued refunds of over Rs70,120 crore to more than 26 lakh taxpayers so far in the current financial year.

In a tweet on Sunday, the Income Tax Department said that out of the total refunds income tax refunds consisted of Rs 16,753 crore and corporate tax refunds were worth Rs53,367 crore. “CBDT issues refunds of over Rs70,120 crore to more than 26.09 lakh taxpayers between April 1, 2021 to Sept.6, 2021. Income tax refunds of Rs16,753 crore have been issued in 24,70,612 cases & corporate tax refunds of Rs53,367 crore have been issued in 1,38,801 cases,” it said.

The I-T Department has tried to smoothen its tax processing systems which is supporting quick assessments and timely generation of refunds. In wake of the pandemic, the department is going the extra mile to complete the procedures so that refunds can be generated quickly and help in ensuring liquidity position of taxpayers.

Further, due to difficulties reported by the taxpayers and other stakeholders in filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22 under the Income Tax Act, 1961, CBDT recently extended deadlines for several compliances, including the filing of Income Tax returns for AY 2021-22.

The due date of furnishing of returns of income for the assessment year 2021-22, has been extended to Dec.31, 2021, from Sept.30.

It has also decided that the due date of furnishing of report of audit under any provision of the Act for the previous year 2020-21, has been extended to Jan.15, 2022. The Indian government is considering allowing foreign institutional investors to buy up to a total of 20 per cent in state-owned Life Insurance Corporation (LIC), a government source said on Wednesday, as it presses ahead with a stake sale.

The listing of LIC is set to be India’s biggest ever initial public offering (IPO), with the government aiming to raise up to 900 billion rupees ($12.2 billion) from its stake sale.

At present, even though foreign institutional investors are allowed to hold up to 74 per cent of private insurance companies and up to 20 per cent of state-owned banks, they are not permitted to own shares in LIC.

Enabling this would allow foreign pension funds, insurance companies and mutual funds to participate in the IPO of India’s largest life insurer.

The government is keen to complete the listing this financial year to help with budgetary constraints and late last month selected 10 merchant banks out of the sixteen that had bid to kick-start the process.

In total, the merchant banks will earn a fee of around 100 million rupees ($1.36 million), higher than the token fee charged on some IPOs of state-owned firms in the past, but still significantly lower than fees for private listings.