Money & Banking

Finance Minister to review credit flow from PSBs on May 22

K.R.Srivats New Delhi | Updated on May 21, 2020

Nirmala Sitharaman

Meeting may also discuss execution issues of measures announced in the over ₹20 lakh crore stimulus package

Finance Minister Nirmala Sitharaman will hold a meeting on Friday via video conference with chief executives of Public Sector banks ( PSBs) and Chairman of State Bank of India to review the credit flow into the economy from these banks.

The Friday meeting will also be attended by NABARD Chairman, SIDBI CMD and MD of National Housing Bank.

This meeting, which comes amidst the fourth phase of a nationwide lockdown due to COVID-19, was earlier slated for May 11, but had to be deferred, official sources said. The meeting is expected to review the credit sanction and disbursements since March 1 this year. It will also look at COVID-19 related sanctioned/pre-approved emergency credit and reassessment based additional working capital, it is learnt.

It comes on the heels of the government rolling out an over ₹ 20 lakh crore economic stimulus package, popularly known as ‘Atmanirbhar’ package.

On the agenda

Also on the agenda is review of the support given to NBFCs ( credit as well as TLTRO) along with details of the number of NBFCs supported and assistance to micro finance institutions.

The crucial issues of credit support to MSMEs, interest rate transmission to borrowers and progress under TLTRO ( availment as well as deployment) and state of moratorium will be discussed at the meeting.

This meeting is also significant given that there is strong perception in industry circles that banks continue to be risk averse and prefer to park substantial portion of the liquidity infused by the RBI as part of COVID-19 relief measures back into the reverse repo window of the central bank. Indian banks on an average are parking as much as ₹ 7-8 lakh crore every day in the reverse repo window, say banking industry observers.

Published on May 21, 2020

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