Published 19:29 IST, August 23rd 2019
Home, vehicle, other retail loans to become cheaper: FM Sitharaman
The government on Friday announced a slew of measures to ensure that loans for home, vehicles and consumption goods become cheaper and widely available.
The government on Friday announced a slew of measures to ensure that loans for home, vehicles and consumption goods become cheaper and widely available through banking and non-banking finance companies. Addressing the media, Finance Minister Nirmala Sitharaman also said that banks will pass on RBI rate cut benefits to borrowers through MCLR reduction. She said that banks will launch repo rate and external benchmark-linked loan products that will lead to reduced easy monthly installments for housing, vehicle and other retail loans. The minister also announced additional liquidity support of Rs 20,000 crore to housing finance companies (HFCs) by the National Housing Bank (NHB), thereby increasing the total support to Rs 30,000 crore.
Finance Minister announces a string of reforms
The government announced a partial credit scheme for purchase of pooled assets of non-banking finance companies and HFCs up to Rs 1 lakh crore to be monitored at the highest level in each bank. Prepayment notices issued to NBFCs will be monitored by banks. The minister said that NBFCs will be permitted to use the Aadhaar authenticated bank 'Know Your Customer' (KYC) to avoid repeated processes. The government has decided to make necessary changes in PMLA rules and Aadhaar regulations to ease the lending process.
"Working capital loans for the industry will also become cheaper," Finance Minister Nirmala Sitharaman said. To reduce harassment and bring in greater efficiency, public sector banks (PSBs) will ensure the mandated return of loan documents within 15 days of loan closure. "This will benefit borrowers who have mortgaged assets," Nirmala Sitharaman said.
Finance Minister explains on-ground implementation
The Finance Minister explained the entire process of tax collections which will occur on the ground. She said that no notices will be issued without central approval. Assuring that anomalies in paper and practice will be eliminated, she said that these moves will favour the assessee. She also announced that the assessee will be able to track the issue and complain if he has any grievance. She continued to say that any issue without the DIN is not valid. Nirmala Sitharaman assured assessees that such a document need not be considered as it has not been issued by the centralized system. Such a notice could be cast away, said the Finance Minister. She made it clear that the implementation of the centralized IT system will be ensured on a ground level.
"If there is a notice being issued on ground and some amount is being claimed by an assessee, that cannot happen without central approval. Also, the amount stated will eventually be resolved. Either it will be ruled in favour of the assessee or the tax authorities and the tax will be paid. Or the claim will be settled. But the amount will be taken as what was claimed, not more or less. This will be available to the assessee himself. This is done so that he can quote that and complain if necessary. There should be no anomalies in paper and practice. We believe this will address the harassment angle in favour of the assessee," she said.
Updated 19:49 IST, August 23rd 2019