Finance Minister Nirmala Sitharaman to meet heads of PSBs on Monday; may urge them for credit growth

Finance Minister Nirmala Sitharaman is scheduled to satisfy the heads of public sector banks (PSBs) on Monday to evaluation the efficiency of the lenders and the progress made by them on varied schemes launched by the federal government for the revival of the economic system.

Banks could be urged to sanction loans for productive sectors to speed up the revival of the economic system going through headwinds together with from the Russia-Ukraine battle, sources stated.

Final week through the Iconic Week celebration of the finance ministry, banks carried out outreach packages throughout the nation the place eligible debtors have sanctioned loans on the spot.

The Finance Minister would take inventory of credit score progress, asset high quality, and enterprise progress plan of banks, sources stated, including non-performing belongings (NPAs) of Rs 100 crore and the restoration standing would even be mentioned.

They stated there could be a complete evaluation of varied segments and progress in authorities schemes together with the Kisan Credit score Card, and Emergency Credit score Line Assure Scheme (ECLGS).

Within the Finances, ECLGS was prolonged by a yr until March 2023. Additional, the assure cowl for the scheme was expanded by Rs 50,000 crore to Rs 5 lakh crore.

The protection, scope, and extent of advantages beneath ECLGS 3.0 for hospitality, journey, tourism, and civil aviation sectors had been expanded.

Additionally, the credit score restrict for eligible debtors was elevated to 50 per cent of their fund-based credit score excellent from 40 per cent earlier. The improved restrict is topic to a most of Rs 200 crore per borrower.

Moreover, sources stated, the evaluation of capital necessities of banks and the monetary inclusion drive could be reviewed through the assembly.

It’s to be famous that the assembly is being held in opposition to the backdrop when all PSBs posted a revenue within the second monetary yr in a row. They’ve greater than doubled their web revenue to Rs 66,539 crore in FY’22. The collective revenue of 12 state-owned banks collectively was Rs 31,820 crore in FY21.

Nevertheless, there have been collective losses for 5 straight years throughout 2015-16 to 2019-20.

The best quantity of web loss was registered in 2017-18 at Rs 85,370 crore, adopted 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 enhance the monetary well being of PSBs, the federal government carried out a complete 4Rs technique — recognition of NPAs transparently, decision and restoration of worth from burdened accounts, recapitalization of PSBs, and reforms in PSBs and the broader monetary ecosystem — for a accountable and clear system.

Complete steps had been taken beneath the 4Rs technique to scale back NPAs of PSBs. As a part of the technique, the federal government has infused Rs 3,10,997 crore to recapitalize banks over the past 5 monetary years — from 2016-17 to 2020-21, out of which Rs 34,997 crore had been sourced by way of budgetary allocation and Rs 2,76,000 crore by way of issuance of recapitalization bonds to those banks. PTI DP ANZ DRR