Money & Banking

Stimulus package: To improve liquidity, ₹ 70,000-cr capital to be infused into public sector banks

PTI New Delhi | Updated on August 23, 2019 Published on August 23, 2019

Banks to launch repo rate and external benchmark-linked loan products

Finance Minister Nirmala Sitharaman on Thursday announced upfront capital infusion of ₹ 70,000 crore into public sector banks, a move aimed at boosting lending and improving liquidity situation.

The move is expected to generate an additional lending and liquidity in the financial system to the tune of ₹ 5 lakh crore, she said at a press conference.

The finance minister further said that banks have decided to pass on RBI rate cut benefits to borrowers through MCLR reduction.

Sitharaman said that banks will launch repo rate and external benchmark-linked loan products that will lead to reduced easy monthly instalments for housing, vehicle and other retail loans.

“Working capital loans for the industry will also become cheaper,” the minister said.

Sitharaman said that to reduce harassment and bring in greater efficiency, public sector banks will ensure mandated return of loan documents within 15 days of loan closure. “This will benefit borrowers who have mortgaged assets.”

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Published on August 23, 2019
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