Finance Minister May Urge Bankers To Sanction Key Sector Loans During Meet

Finance Minister Nirmala Sitharaman is scheduled to meet heads of public sector banks (PSBs) on Monday (June 20) to review performance of the lenders and progress made by them on various schemes launched by the government for revival of the economy..This is the first review meeting after the presentation of Budget 2022-23..Banks would be urged to sanction loans for productive sectors to accelerate revival of the economy facing headwinds including from Russia-Ukraine war, sources said..Last week during the Iconic Week celebration of the finance ministry, banks conducted outreach programme across the country where eligible borrowers were sanctioned loans on the spot..The Finance Minister would take a stock of credit growth, asset quality and business growth plan of banks, sources said..They said there would be a comprehensive review of various segments and progress in government schemes including Kisan Credit Card, Emergency Credit Line Guarantee Scheme (ECLGS)..In the Budget, ECLGS was extended by a year till March 2023. Further, the guarantee cover for the scheme was expanded by Rs 50,000 crore to Rs 5 lakh crore..The coverage, scope and extent of benefits under ECLGS 3.0 pertaining to hospitality, travel, tourism and civil aviation sectors were expanded..Also, the credit limit for eligible borrowers was increased to 50 per cent of their fund-based credit outstanding from 40 per cent earlier..The enhanced limit is subject to a maximum of Rs 200 crore per borrower. Besides, sources said, review of capital requirement of banks and financial inclusion drive would be reviewed during the meeting..It is to be noted that the meeting is being held against the backdrop when all PSBs posted profit in the second financial year in a row. They have more than doubled their net profit to Rs 66,539 crore during 2021-22..The collective profit of 12 state-owned banks together was Rs 31,820 crore in 2020-21. However, there were collective losses for five straight years during 2015-16 to 2019-20..The highest amount of net loss was registered in 2017-18 at Rs 85,370 crore, followed by Rs 66,636 crore in 2018-19; Rs 25,941 crore in 2019-20; Rs 17,993 crore in 2015-16 and Rs 11,389 crore in 2016-17..To improve financial health of PSBs, the Government implemented a comprehensive 4Rs strategy - recognition of non performing assets (NPAs) transparently, resolution and recovery of value from stressed accounts, recapitalising of PSBs, and reforms in PSBs and the wider financial ecosystem -- for a responsible and clean system..Comprehensive steps were taken under the 4Rs strategy to reduce NPAs of PSBs. As part of the strategy, the Government has infused Rs 3,10,997 crore to recapitalise banks during the last five financial years - from 2016-17 to 2020-21, out of which Rs 34,997 crore were sourced through budgetary allocation and Rs 2,76,000 crore through issuance of recapitalisation bonds to these banks.

Finance Minister May Urge Bankers To Sanction Key Sector Loans During Meet

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