Cut in most administered interest rates by 0.5% (by 50 basis points) from March 1, 2002.
Setting up of Asset Reconstruction Company by June 2002.
Banks are now allowed to deduct 7.5% of their total income against provisions made by them for bad and doubtful debts.
Banks are given option to deduct up to 10% of their non-performing assets (NPAs) falling in the category of loss or doubtful assets from total income.
Bill on the banking sector reforms is to be introduced in Parliament.
Foreign banks permitted to operate in India with fully owned branches after the specific permission of RBI. |
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The FDI limit in private sector banks has been raised to 74% from the existing 49%.
The SBI will have to lend at lower rates to the agricultural sector as well as SSIs. SBI will now offer loans in the range 2% above its Prime Lending Rate (PLR) or 2% below its PLR.
Tax exemption on interest on housing loans maintained at Rs 150,000 per year.
The government has agreed to buy back older government borrowing with high interest rates from banks.
Reduction in the interest rates on all small savings schemes by 1%. |
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The government proposed to double credit to the agriculture sector in the next three years.
Significant emphasis on making credit available towards infrastructure development.
Inter-institutional group comprising select banks and financial institutions incorporated to ensure speedy conclusion of loan agreements for infrastructure projects. Nearly Rs 400 bn will be kept aside by this consortium for infrastructure support.
Task force to be set up to explore reforms in the cooperative banking sector.
Securitisation Act to be amended.
FDI in the insurance sector to be hiked from 26% to 49%. |