Mumbai:
Government to have some presence in life insurance, general insurance and reinsurance, said finance minister Nirmala Sitharaman on Wednesday in Mumbai.
On the government's plans to reduce stakes in insurers, Sitharaman said the government will go down to having minimum holdings in such companies.
Addressing the media, Sitharaman said, “During the budget, a public enterprise policy was announced, wherein we had identified certain strategically important sectors and in them, the bare minimum presence of the government will be there. Banks, financial institutions, and insurance are identified as strategic sectors, which means the government’s minimum presence will be there in insurance”.
“If minimum presence is something that has to be there as per policy, I will obviously be present in LIC, in the general insurance industry, and somewhat in the reinsurance sector also,” she added.
Having said that, the government will look to amalgamate or disinvest in entities in the financial sector, after ensuring that they have a minimum presence.
“But, over and above a bare minimum presence, if there is a need for me to identify those (entities), which are there but are probably not necessary for my bare minimum presence, I will think in terms of amalgamating, or disinvesting in them,” the finance minister said.
The privatisation agenda is part of the government’s strategic disinvestment policy. According to the policy, in strategic sectors such as banking, insurance and financial services, there will be a bare minimum presence of public sector enterprises. The remaining public enterprises in strategic sectors will be privatised, merged or closed, said analysts.
She also asked the employees not to fear anything saying the government is sensitive about their concerns.
When asked about the reports of government mulling insurance bonds as an alternative to bank guarantees, Sitharaman said it was just a suggestion that had come from the industry.
Admitting that family pension for bank employees is at a paltry level, the government on Wednesday announced to raise the same to 30 per cent of the last-drawn salary.
Earlier, kin of a deceased PSB employee used to get a maximum of Rs 9,284 per month as a family pension, said Department of Financial Services Secretary Debasish Panda.
''The cap has been completely removed and a uniform slab of 30 per cent at the last-drawn salary will be entitled as family pension,'' Panda told reporters here, admitting that the earlier levels were ''paltry''.
This would result in the family pensions rise to as high as Rs 30,000-Rs 35,000 a month, Panda said.
Similarly, the ministry has also decided to increase the employer's contribution in New Pension Scheme (NPS) to 14 per cent of the salary from the current 10 per cent, he said.
Sitharaman unveiled the fourth edition of the Public Sector Bank (PSB) Reforms Agenda 'EASE 4.0' for 2021-22-tech-enabled, simplified, and collaborative banking,
She expressed her satisfaction at public sector banks' (PSBs) performance in the past few years, and appreciated that many of them have come out of the RBI's prompt corrective action framework.
Panda said a dozen PSBs have become leaner and started delivering profits which have upped the investor confidence in them and made them self-dependent for capital raising.
He said that since last year, the banks have collectively raised over Rs 69,000 crore, including Rs 10,000 crore in equity, and are in the process of raising another Rs 12,000 crore at present.
The finance ministry on Wednesday informed that public sector banks have reported healthy profits and have accelerated on technology-driven reforms.
As per an official release by the ministry, it informed, "PSBs have reported a profit of Rs 31,817 crore in financial year of 2020-21 as compared to a loss of Rs 26,016 crore in financial year of 2019-2020.
This is the first year when PSBs have reported a profit after five years of losses. Total gross non-performing assets stood at Rs 6.16 lakh crore as of March 2021, reduction of Rs 62,000 crore from March 2020 levels. Number frauds at PSBs have substantially come down to 2,903 in financial year 2020-21 compared to 3,704 in financial year 2018-19."
PSBs have setup mechanism for customers where they can register loan requests 24X7 through digital channels such as Mobile and Internet banking, SMS, missed call and call centre. In FY21,
PSBs have collectively disbursed Rs 40,819 crores of fresh personal, home and vehicle loans through leads sourced from such digital channels. This accounts for approximately 10 per cent of overall disbursements in personal, home and vehicle loans in the above said period.
The top 7 PSBs have built analytics capabilities through the setup of dedicated analytics teams and IT infrastructure to proactively offer loans to its existing customers. Such loan offers were generated using the existing customer transactions data within the banks. In FY21, Rs 49,777 crores of fresh retail loan disbursements were made by the top 7 PSBs based on these credit offers
PSBs have also extensively used external partnerships and dedicated marketing salesforce network for the sourcing of retail segment and MSME segment loans. Sourcing from such channels has been 9.1 lakh loans in FY21.