Finance Minister Nirmala Sitharaman presented the Union Budget 2025 on February 1st, 2025, at 11:00 AM before the Parliament. In her Budget 2025, she speech outlined a series of financial sector reforms aimed at boosting rural banking access, enhancing investment opportunities, and streamlining financial processes. The proposed changes are expected to strengthen India’s financial ecosystem while ensuring that credit access and banking services reach rural and underserved areas.
Recognizing the need for better financial services in rural areas, the government plans to deepen and expand the services of India Post Payment Bank. This aims to improve financial inclusion and ensure that banking and payment services are accessible to those in remote locations.
To support infrastructure development, the government has proposed setting up a ‘Partial Credit Enhancement Facility’ through the National Bank for Financing Infrastructure and Development (NaBFID). This initiative will help companies raise funds through corporate bonds, making it easier to finance large-scale infrastructure projects.
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Public Sector Banks will develop a ‘Grameen Credit Score’ framework to empower self-help groups (SHGs) and rural borrowers. This system will assess the creditworthiness of rural borrowers, helping them access loans and financial services more easily.
A huge reform announced in the Budget is the increase in the Foreign Direct Investment ( FDI ) limit for the insurance sector from 74% to 100%. This move is expected to attract global insurance companies, leading to more competition, better insurance products, and greater penetration of insurance services across India.
The government will set up a Forum for Regulatory Coordination and Development of Pension Products. This initiative aims to improve pension schemes and provide better retirement solutions, ensuring that more citizens have access to secure pension plans.
To make financial transactions easier and more secure, the government will roll out a revamped Central KYC Registry in 2025. This initiative will simplify the Know Your Customer (KYC) process, reducing paperwork and making it more convenient for individuals and businesses to complete financial transactions.
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