The industry expects to see a couple of measures from the government in the upcoming budget 2022 on February 1 with an aim to boost the banking, financial, services and insurance sector. Over 75 percent of respondents want to regulate cryptocurrencies and harmonisation of tax and regulatory incentives for alternative investment funds AIFs between the domestic tariff area and Gujarat International Finance Tec-City GIFT City, according to a survey conducted by Grant Thornton Bharat on pre-budget expectations. More than 77 percent of respondents want public credit registry PCR to be implemented, according to a survey by Grant Thornton Bharat s on pre-budget expectations. A PCR is an information repository that holds all information about existing as well as new borrowers.
Grant Thornton Bharat said that the market survey shows the expectation for the government to be forward-looking by focusing on initiatives that help strengthen the stability and growth of the financial services ecosystem, as mentioned by Vivek Iyer, partner-financial services. Grant Thornton Bharat conducted a series of surveys across sectors to gauge market sentiments and better understand the expectations of Union Budget 2022. More than 1,000 people participated in these surveys across digital platforms.
As much as 57 per cent of the respondents voted for fiscal measures to mitigate damages from the ongoing Covid-19 epidemic, but stood against moratoriums to be provided by the banking system 57 per cent, reflecting an underlying recovery sentiment.
Consulting firm Primus Partners believes that growing non-performing assets are one of the biggest challenges for the banking, financial and services sector. Banks saw a rise in non-performing assets NPAs, which have increased from 7.5 per cent last year to 13.5 per cent in September 2021. The public sector banks have been impacted the most during the pandemic period. In order to finance the growth driven by private investment, there needs to be a way to improve the balance sheets by looking at initiatives beyond bank consolidation, it said.
The majority of respondents believe that the regulatory sandbox approach should be suggested for innovations around finance in order to learn more about decentralised finance in a test environment.
In another report, Atanu Chakraborty, former economic affairs secretary and part-time chairman of HDFC, said the biggest challenge to the financial system today is the arbitrage between banks, NBFCs and unregulated fintech entities. Unless sandbox-oriented solutions are developed, this may pose a real threat to financial system stability.