P K Gupta
Executive director, Corporation Bank
The Union Budget 2003-04 proposes to offer a buyback of illiquid gilts - entirely on a voluntary basis - from banks that are in need of liquidity, or of encashing the premium for making provisions for their non-performing assets (NPAs), thereby improving their balance sheets, or otherwise.
The premium to be offered will be set on a transparent basis. If the banks declare the premium received as business income for income tax purposes, they will be allowed additional deduction to the extent such income is used for provisioning of their NPAs.
It is a fact that a large proportion of the bank
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