Budget 2022 Sectoral Pick: Major announcements that could boost BFSI segment – Nirmal Bang lists top 10 things here!

Brokerage firm Nirmal Bang sees BFSI (Banking, Financial Services, and Insurance) segment to get a major boost from the Budget 2022 announcements. The Union Budget 2022 will be presented by Finance Minister Nirmala Sitharaman on February 1, 2022. 

The brokerage firm sees significant focus on the national monetisation pipeline besides incentives to states to priortise capex. However, it does not anticipate any changes in tax rates. Some incentives to support domestic personal consumption could likely be announced, it feels.  

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From measures related to credit flow to MSME to announcements regarding Central Digital Bank Currency and many others, the brokerage house has list of expectations from the Budget 2022. 

Below are the 10 expectations Nirmal Bang sees for BFSI sector 

1)We expect measures to support credit flow to the MSME (Micro Small and Medium Enterprise) sector in order to revive overall growth. 

2) We expect an announcement on setting up of a formal body to oversee the operations of fintech players. 

3) For formalisation of credit to marginal borrowers, we could expect an announcement making it mandatory to share credit data of small borrowers to a rating agency. 

4) Expect announcement on setting up of Central Bank Digital Currency. 

5) Government may consider some credit-support measures for businesses and sectors (Transport, Hospitality, etc) that have found it difficult to recover from the adverse impact of covid-19. 

6) We expect further measures around operations of NARCL and NABFID (especially in light of continued focus on infra development). 

7) We expect the budget to continue with some of the liquidity schemes announced earlier to support and ensure funding availability to NBFCs Insurance sector. 

8) We expect announcements to support higher insurance penetration, especially in the protection and retirement space.  

9) In a support to higher insurance penetration, this may include personal tax benefits as well as reduction in GST rates to make insurance products more affordable. 

10) We expect Budget 2022 to retain the thrust on capex-related spending to support growth, which may direct impact on banking and financials.