Budget 2025: Major banking sector reforms to boost credit and growth

SUMMARYThe government has introduced significant reforms to support the banking sector, improve access to credit, and aid the growth of small businesses and infrastructure. Here’s a breakdown of the key announcements:By CNBCTV18.com February 1, 2025, 5:34:40 PM IST (Published)1 / 8A ₹15,000 crore SWAMIH (Special Window for Affordable and Mid-Income Housing) Fund will be established to target the completion of 1 lakh stalled housing units, providing crucial support to homebuyers and developers and addressing the ongoing housing crisis. (Image: Shutterstock)2 / 8In a move to empower Micro, Small and Medium Enterprises (MSMEs), the government has revised the classification criteria. The investment limit will be increased by 2.5 times, and the turnover limits will be doubled, allowing a larger number of businesses to benefit from MSME schemes. (Image: Shutterstock)3 / 8The credit guarantee cover for MSMEs has been enhanced, with the limit raised from ₹5 crore to ₹10 crore, offering more financial support to small businesses in need of growth capital. (Image: Shutterstock)4 / 8To support farmers, the Kisan Credit Card (KCC) loan limit will be raised to ₹5 lakh from the current ₹3 lakh, ensuring better access to credit for agricultural activities and boosting the agricultural sector. (Image: Shutterstock)5 / 8For micro-enterprises, the government will introduce customised credit cards with a ₹5 lakh limit, specifically for businesses registered on the Udyam portal. In the first year, 10 lakh cards will be issued to help micro-businesses thrive. (Image: Shutterstock)6 / 8The FDI limit in insurance companies will be increased from 74% to 100%, subject to meeting certain conditions, enabling greater foreign investment and strengthening the insurance sector. (Image: Shutterstock)7 / 8MUDRA loans will now be extended to homestay businesses, providing financial backing to small entrepreneurs in the tourism sector and supporting the growth of the hospitality industry. (Image: Shutterstock)8 / 8Lastly, NaBFID will establish a ‘Partial Credit Enhancement Facility’ for corporate bonds, designed to promote infrastructure investment by enhancing the creditworthiness of infrastructure projects and encouraging private sector participation. (Image: Shutterstock)Continue Reading

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