Finance Minister Nirmala Sitharaman to meet public sector bank heads today

Finance Minister Nirmala Sitharaman (Photo: ANI)

NEW DELHI : Continuing efforts to increase credit disbursement, Finance Minister Nirmala Sitharaman will meet the heads of public sector banks (PSBs) today to take stock of recent steps taken by the government, including the first phase of the ‘outreach programme’ across over 200 districts during the festive season, a senior government official told Mint.

It is learnt that the minister is expected to review the progress of the partial guarantee scheme to the Non-Banking Financial Company (NBFCs), and other decisions pertaining to Micro, Small and Medium Enterprises (MSMEs) announced less than a month ago.

Meeting top officials of PSBs on September 19, Sitharaman had asked them not to declare stressed assets of MSMEs as non-performing asset (NPA) till March 31, 2020, invoking the existing guidelines of the banking regulator. “The progress related to announcements made last month could be discussed,” the official cited above added.

Since September 19, the finance minister has already met public as well as private sector banks, NBFCs, housing finance companies (HFCs) and microfinance institutions (MFIs) and prodded them to take steps to increase credit disbursal during the festive season, seeking to boost consumer demand, amid a slowdown in the economy.

Last week, banks, along with NBFCs, HFCs and MFIs, held the first phase of the ‘loan mela’ or the outreach programme in over 200 districts across the country to give loans pertaining to various categories, including agriculture, MSMEs, vehicles. The second phase of the programme will begin a few days ahead of Diwali.

“At the end of August 2019, overall credit growth in the banking sector stood at 10.1% on a year-on-year basis. This is in parallel with record recoveries and cleaning of bank balance-sheets showing better quality of asset book,” the finance ministry had said last month.

The partial credit guarantee scheme announced in the Budget for the purchase of pooled assets of NBFCs and HFCs will be reviewed. As part of the 1 trillion scheme, which was announced for restoring liquidity in NBFCs, the government is providing one-time six-month partial credit guarantee to state-owned banks for the first loss of up to 10% for the purchase of high-rated assets.

[“source=livemint”]