Nirmala Sitharaman announces ‘loan melas’ to boost credit growth

Economic slowdown, Nirmala Sitharaman, Nehruvian polic, 1991 reforms, Parakala Prabhakar
Finance Minister Nirmala Sitharaman in her Tuesday’s press meet had hinted at an upcoming economic package to alleviate the situation arising out of the coronavirus crisis. Photo: PTI

Finance minister Nirmala Sitharaman on Thursday (September 19) said that the government is reviewing the health of public sector banks and has asked them to lend more.

She said that public sector banks will hold “shamiana meetings” with non-banking financial companies and retail borrowers in 400 districts between now and September 29.

She said the meetings are meant to provide credit to homebuyers and farmers among borrowers. “Reviewed liquidity situation with banks and have identified some NBFCs that they can lend to,” she said.

The FM had last month announced a mega merger of 10 state-run banks into four large entities. The move is aimed at unleashing the latent strength of the banking sector.

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Addressing a press conference on Thursday, Sitharaman said that in the first phase, between September 24 and 29, the programme will be held in 200 districts. She added that another 200 districts will be covered during October 10 till 15.

Ministers or MPs will also be deputed to attend such programmes and they will be required to submit a report on the same, news reports stated.

The idea behind the programme is to ensure disbursal of maximum credit in view of the upcoming festive season. During these meetings, credit will be provided to several sectors, including retail, agriculture, MSME, business and others, news agency PTI reported.

Further, Sitharaman announced that the banks have been directed that they must not declare any stressed MSME loans as non-performing assets (NPA) till March 31, 2020, the report said.

(With inputs from agencies)

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