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FM Nirmala Sitharaman to meet CEOs of public sector banks on Aug 25

August 16, 2021 12:47 PM

FM Nirmala Sitharaman to meet CEOs of public sector banks on Aug 25
FM Nirmala Sitharaman to meet CEOs of public sector banks on Aug 25, adding that banks may be nudged to push loan growth in productive sectors.

FM Nirmala Sitharaman to meet CEOs of public sector banks on Aug 25, to meet heads of public sector banks (PSBs) on August 25 to review financial performance of the lenders and progress made by them to support the economy battered by COVID-19 pandemic.

Given the importance of the banking sector in generating demand and boosting consumption, sources said the meeting with the MD and CEOs of PSBs is considered important. Recently, the Finance Minister said the government is ready to do everything required to revive and support economic growth hit by the COVID-19 pandemic.

“Growth will be given its importance. Growth will be pushed both by the Reserve Bank and by us…,” she had said. Interestingly, this would be the first physical review meeting since the outbreak of the pandemic in March last year.

Also Read: Pandemic hurt India’s prospects to become $5 tn economy by FY25

The meeting is expected to take stock of the banking sector, progress on restructuring 2.0 scheme announced by Reserve Bank of India (RBI), sources said, FM Nirmala Sitharaman to meet CEOs of public sector banks on Aug 25, adding that banks may be nudged to push loan growth in productive sectors.

The revamped Rs 4.5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) would also be reviewed during the meeting likely to be held in Mumbai, sources said.

At the same time comprehensive steps were taken to control and to effect recovery in NPAs, which enabled PSBs to recover Rs 5,01,479 crore over the last six financial years, the government informed Parliament recently. As far as credit growth of scheduled commercial banks (SCBs) is concerned, it has remained positive for 2020-21 despite contraction in GDP (-7.3 per cent) due to the COVID-19 pandemic.

Gross loans and advances – outstanding of SCBs increased from Rs 109.19 lakh crore as of March 31, 2020 to Rs 113.99 lakh crore as of March 31, 2021. Agriculture and allied activities, micro, small and medium enterprises, housing and auto have witnessed a year-on-year growth of 12.3 per cent, 8.5 per cent, 9.1 per cent and 9.5 per cent, respectively, during the year.

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