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Arun Jaitley

Economy round-up: State banks may get more powers; GST on track for April 2017 rollout

28 September, 2016

Finance minister Arun Jaitley has said that a law to empower bankers at state-owned banks to take key decisions, without fear of consequences, is on the anvil, according to a report.

The Mint newspaper reported that Jaitley said the law, which is being debated by a parliamentary standing committee, will reach Parliament shortly. The finance minister said that executives at public-sector banks, which lend huge sums of money, are constrained by laws including the Prevention of Corruption Act of 1998 that hampers quick decision-making on bad loans, especially while taking haircuts by selling them off to managers of stressed assets, the report said.

Interestingly, this comes even as banks have reportedly dropped plans to sell Essar Steel’s loans worth more than Rs 44,000 crore and recast the debt. The Financial Express reported that the consortium of lenders to the distressed steelmaker has decided against taking a 50% haircut by selling the loans to the Asset Care and Reconstruction Enterprise, which is backed by the Hong Kong-based SSG Capital. The prominent lenders to the steel company include the State Bank of India, Punjab National Bank and IDBI Bank.   

Separately, Jaitley reiterated that the government is confident of meeting the April 2017 target to implement the Goods and Services Tax (GST) in the country. He said that the rollout was possible, if state finance ministers do not divide themselves on party lines.

This comes even as banks and retail outlets, online and offline, are bringing back zero-cost equated monthly installments on purchases made through credit cards, ahead of the coming festive season, The Economic Times reported. The report said that the scheme has made a comeback after three years, although, in a new avatar, with e-commerce firm such as Flipkart offering zero EMI schemes to customers. Unlike the previous occasion, bankers and retailers are now offering customers the interest due on their EMIs as a discount. In 2013, the Reserve Bank of India had barred retailers and banks from offering zero-cost EMIs, saying that the interest was camouflaged and passed on as processing fees.

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Economy round-up: State banks may get more powers; GST on track for April 2017 rollout

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