With their core lending business hit due to demonetisation, public sector banks have sought higher capital support from the government.
PSU bank heads met finance minister Arun Jaitley on Tuesday to present their suggestions for Budget 2017.
Under the Indradhanush scheme announced last year, the government said it will infuse R25,000 crore in state-owned banks during the current fiscal.
Besides, banks also want the service tax on digital transactions to be removed.
“We have requested the government to reduce the limit of free ATM withdrawals,” said a top private banker, who did not wish to be named.
Currently, you can make five ATM transactions a month from another bank’s ATM without paying extra charges. The number could be brought down to two, said the banker quoted above .
The executives have also suggested introducing debit cards with smart chips for public transport payments at retail outlets through e-wallets instead of cash, sources said.
However, as expected, a large part of the bankers’ meeting with Jaitley focussed on demonetisation. Bankers requested the government to refrain from frequent changes to withdrawal and deposit limits, highlighting difficulties faced by banks to readjust to the changes.
They also suggested that civic bodies should be encouraged to collect property tax and utility tax online. The government should make it compulsory for employers to make salary payments digitally. Shopkeepers and customers should also be given tax concessions for using digital means.
A specific roadmap is also likely to be chalked out to promote digital payment in smaller towns. “We need to incentivise shopkeepers in smaller towns and rural areas to move towards cashless transactions... cash is predominantly used for transactions here. A clear scheme may be introduced,” said an official who attended the meeting.
The lenders also suggested that business correspondents could be given added incentives for educating people in using various digital methods.
(With inputs from PTI)