New Delhi: State Bank of India Chairman Dinesh Kumar Khara has pitched for tax relief on interest income, saying it will help banks mobilize savings which can be used to finance long-term infrastructure projects.
Currently, banks are required to deduct tax when the interest income on deposits across all bank branches exceeds Rs 40,000 in a year. In respect of savings accounts, interest earned up to Rs 10,000 is exempt from tax.
"If some relief can be given in the budget with respect to tax on interest income, it will be an incentive for depositors. After all, the banking sector uses the deposits raised for capital formation in the country," he said in an interview. .,
Finance Minister Nirmala Sitharaman is likely to present the full budget for 2024-25 in Parliament next month.
Looking at the current economic growth rate, SBI Chairman expects 14-15 percent loan growth during the financial year 2024-25.
"Normally the way we look at it is that GDP growth rate plus inflation and 2-3 per cent on top of that. That gives us a number of 14 per cent or thereabouts," he said.
"Therefore, 14-15 per cent credit growth depends on the opportunities available for lending and it meets our risk appetite. We would be happy to grow at this pace," he said.,
He said, as far as deposits are concerned, it increased by 11 percent last year.
“And we have some scope available in terms of additional SLR… which ensures that there is no pressure on us to raise deposit rates to support our loan-to-deposit ratio,” he said. "
The bank has an excess statutory liquidity ratio (SLR) of between Rs 3.5 lakh crore and Rs 4 lakh crore.
“Incidentally, I may add here that our loan-deposit ratio is only around 68-69 per cent. This leaves enough room for us to lend without putting pressure on deposit interest rates.Still, he said, "We always value deposits. That's why we recently increased the interest rate for short-term deposits because we felt there was room for improvement... We need to improve our deposit growth rate. "Some improvements should be made." limit during this year. And our effort will be to achieve at least 12-13 percent growth this year."
Last month, SBI had increased fixed deposit rates on select short-term maturities by up to 75 basis points.For retail term deposits of 46-179 days, the rate increased by 75 basis points to 5.50 per cent as against 4.75 per cent earlier.
Currently, banks are required to deduct tax when the interest income on deposits across all bank branches exceeds Rs 40,000 in a year. In respect of savings accounts, interest earned up to Rs 10,000 is exempt from tax.
"If some relief can be given in the budget with respect to tax on interest income, it will be an incentive for depositors. After all, the banking sector uses the deposits raised for capital formation in the country," he said in an interview. .,
Finance Minister Nirmala Sitharaman is likely to present the full budget for 2024-25 in Parliament next month.
Looking at the current economic growth rate, SBI Chairman expects 14-15 percent loan growth during the financial year 2024-25.
"Normally the way we look at it is that GDP growth rate plus inflation and 2-3 per cent on top of that. That gives us a number of 14 per cent or thereabouts," he said.
"Therefore, 14-15 per cent credit growth depends on the opportunities available for lending and it meets our risk appetite. We would be happy to grow at this pace," he said.,
He said, as far as deposits are concerned, it increased by 11 percent last year.
“And we have some scope available in terms of additional SLR… which ensures that there is no pressure on us to raise deposit rates to support our loan-to-deposit ratio,” he said. "
The bank has an excess statutory liquidity ratio (SLR) of between Rs 3.5 lakh crore and Rs 4 lakh crore.
“Incidentally, I may add here that our loan-deposit ratio is only around 68-69 per cent. This leaves enough room for us to lend without putting pressure on deposit interest rates.Still, he said, "We always value deposits. That's why we recently increased the interest rate for short-term deposits because we felt there was room for improvement... We need to improve our deposit growth rate. "Some improvements should be made." limit during this year. And our effort will be to achieve at least 12-13 percent growth this year."
Last month, SBI had increased fixed deposit rates on select short-term maturities by up to 75 basis points.For retail term deposits of 46-179 days, the rate increased by 75 basis points to 5.50 per cent as against 4.75 per cent earlier.
