Mumbai: Union Finance Minister Nirmala Sitharaman on Wednesday said it is too early to say if there is a lack of demand for credit and announced a district-wise outreach to be undertaken by banks to help credit growth from October.
A push to credit growth from such outreach efforts will also help the momentum set by the stimulus packages, which have been extended by the government since the onset of the pandemic.
It can be noted that in late 2019, banks had conducted the "loan melas" in 400 districts to push up sagging credit growth. Even now, the credit growth is stuttering at around
6 per cent.
"I think it is too early to conclude whether there is a lack of demand… I don't think it is time yet to conclude that there is no credit pick-up. Even without awaiting indications, we have taken steps to ramp up credit," Sitharaman told reporters here.
She noted that over Rs 4.94 lakh crore was disbursed by the banks between October 2019 and March 2021 through the outreach initiatives undertaken by them.
"This year too sometime in October, there will be a credit outreach in every district of the country," she said.
Sitharaman added that the government had announced that credit up to Rs 1.5 lakh will be given to borrowers through NBFC-MFIs.
"In order to keep up the momentum of stimulus that we are periodically giving, we have also asked banks to go out and give credit," she said.
Meanwhile, Sitharaman said there is a need to ramp up credit growth in the eastern pockets of the country in states like Jharkhand, West Bengal, and Odisha, where the populations are displaying a higher propensity to deposit money in current and savings
accounts.
Banks have also been asked to create state-wise plans for northeastern states to help the logistics sector and exporters.
Finance Minister Nirmala Sitharaman said she has requested banks to work with all state governments to push the one district, one product' agenda.
Banks have also been requested to have interaction with export promotion agencies, chambers of commerce and industry to understand and address the requirement of exporters on a timely manner, Sitharaman said while addressing media here on
Wednesday.
The Finance Minister, who is on a two-day visit to the financial capital, said between public sector banks, there should be some kind of a simple approach so that exporters are not made to run between one bank to another scouting for a better offer.
During the day, she met heads of public sector banks (PSBs) to review their financial performance.