Transmission of monetary policy decision is important and the same will be discussed with the heads of public and private banks on February 21, said the Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday while responding to a question on delay in passing on of interest rate cut to borrowers. Earlier this month, the RBI cut the benchmark interest rate by 0.25 per cent to 6.25 per cent.
On being asked about the likely interim dividend to the government, he told reporters that it’s difficult to pre-judge what the central bank board will decide.
Meanwhile, Arun Jaitley addressed the customary post-budget meeting of the central board of the Reserve Bank earlier in the day. The central bank independently decides dividend and specifics are not decided in the board meeting, Finance Minister Arun Jaitley said when asked about interim dividend.
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Commenting on mergers in the banking space, Finance Minister Arun Jaitley said India needs fewer and mega banks which are strong.
The customary post-budget meeting took place against the backdrop of a slight deviation from the fiscal deficit target for the current financial year, a tax rebate for income up to Rs 5 lakh and income support scheme for 12 crore farmers.
The government announced the ‘Pradhan Mantri Kisan Samman Nidhi’ (PM-KISAN) in the budget under which Rs 6,000 per year would be provided to farmers holding cultivable land of up to 2 hectares.
The government also decided to increase standard deduction from Rs 40,000 to Rs 50,000 and raised the TDS threshold on interest earned on bank/post office deposits from Rs 10,000 to Rs 40,000.
In the Interim Budget, the government has projected a fiscal deficit of 3.4 per cent of the GDP for 2019-20, against the earlier target of 3.3 per cent.