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FM Nirmala Sitharaman to meet PSU CEOs to review credit flow

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Finance Minister Nirmala Sitharaman will hold a meeting with Chief Executives of Public Sector Banks (PSBs) and Chairman of State Bank of India to review the flow of credit into the economy from these banks.

 

Amidst national lockdown due to coronavirus, this meeting will review the credit sanction and disbursements since March 1 this year. It will also look at COVID-19 related sanctioned/pre-approved emergency credit and reassessment based additional working capital, it is learnt.

 

Also on the agenda is review of the support given to NBFCs (credit as well as TLTRO) along with details of the number of NBFCs supported and assistance to micro finance institutions. The crucial issues of credit support to MSMEs, interest rate transmission to borrowers and progress under TLTRO (availment as well as deployment) and state of moratorium will be discussed at the meeting.

 

This meeting is also significant given that there is strong perception in industry circles that banks continue to be risk averse and prefer to park substantial portion of the liquidity infused by the RBI as part of Covid-19 relief measures back into the reverse repo window of the central bank. Indian banks on an average are parking as much as Rs 7-8 lakh crore every day during the last few days in the reverse repo window, say banking industry observers.

 

Earlier this month, RBI Governor, Shaktikanta Das held a meeting with heads of both public and private sector banks to take stock of the economic situation and review implementation of various measures announced by the central bank.

 

The deployment of excessive funds by banks under the reverse repo route may also come up for discussion on Monday, sources said.

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