Banking industry wants GST easing and KYC tweaks

Budget 2022 expectations: Ahead of budget day, expectations from different sectors of government come to light. The banking industry is no different. The sector has a host of demands from Finance Minister Nirmala Sitharaman, who will present the Union Budget 2022 on February 1, next week. Tax breaks and additional benefits the banking industry wants the government to notice in this year’s budget session.

Whether the government will listen to their demands will be clear on February 1 when Sitharaman presents the 256th budget on February 1.

“With digital payments, where the focus should be on digital banking, many accounts opened under JAN DHAN YOJNA are not operational at all. At the macro level, technology should help the government realize its vision of transforming the ‘India into a digital economy,’ said Archana Elapavuluri, Founder of Pickright Technologies on Budget 2022.

“This change is necessary to improve the country’s overall economic efficiency by reducing the role of cash in economic transactions and ensuring that people have access to better financial services and credit,” she added.

Ram Shriram, Founder of BharatATM, said waiving GST and TDS on financial services through business correspondents during the Union Budget 2022 will provide transparent services.

“The growth of the digital payments industry and its adoption is the result of soft taxation for self-service digital customers,” he said.

“To ensure that the same benefits reach less tech-savvy citizens, our government should consider a relaxation of GST and TDS for financial inclusion services offered by Business Correspondent (BC) outlets across India. Cancellation of GST and TDS will help the industry reduce the cost of providing transparent financial services,” Shriram added.

Experts also expect incentives for the banking sector and tax exemptions. “Incentives to the banking sector include reimbursement of certain costs or tax subsidies in the form of weighted deductions or 100% amortization,” said Divam Sharma, founder of Green Portfolio, which is a management services provider. portfolio registered with SEBI.

Recently, the Reserve Bank of India (RBI) set up an in-house financial technology department to focus on the dynamically changing financial landscape of the country.

Apart from GST exemptions and tax exemptions, experts also demanded KYC regulations and NPA perspective during the budget, which could help mitigate risks in the banking sector.

“The regulatory framework and implementation of electronic and video KYC customer onboarding should be advanced to increase efficiency. Technological advancements should further support this to create a CKYCR (central KYC registry), a repository of customer KYC information,” said Deepak Bhawnani, Founder and CEO of Alea Consulting.

“National Asset Reconstruction Co (NARCL) and India Debt Resolution Company Ltd (IDRCL) should certainly be launched in conjunction with the soon to be announced Union Budget 2022-23 to facilitate risk mitigation efforts,” he added. the support provided by the government has improved the situation of the sector, banking players cannot afford to ignore the risks that still exist, Bhawani said.

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