Reviewing health of public sector banks, says finance minister Nirmala Sitharaman
Finance minister Nirmala Sitharaman had last month announced a mega merger of 10 state-run banks into four large behemoths. The move is aimed at unleashing the latent strength of the banking sector.
Finance minister Nirmala Sitharaman on Thursday 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.
Among them the Punjab National Bank merged with Oriental bank of Commerce and United Bank of India to create India’s second largest Public Sector Bank (PSB) with a business of Rs 17.5 lakh crore.
The public meetings between the banks and the borrowers will be held in two segments. The first will be held from September 24 to September 29 in 200 districts, the second between October 10 and 15 covering another 200 districts.
Sitharaman said there will be an effort to ensure maximum credit is disbursed during the festival season. In October, India will celebrate Diwali, one of the most crucial times for India business.
The finance minister also said that stressed micro, small and medium enterprises (MSMEs) would not be declared NPAS till March 31 next year. “We have requested that the bank should make an effort to sit with such stressed asset MSMEs and work it out with them to get them out of that situation,” she added.
India economy is facing a slowdown. The gross domestic product (GDP) growth slowed to 5% in the quarter ended June which was the slowest speed of growth since March 2013 when it was 4.7%.