Finance Min to meet heads of PSBs on June 20 for review, may nudge them for loan growth
New Delhi: Finance Minister Nirmala Sitharaman is scheduled to meet heads of public sector banks (PSBs) on Monday 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 FY21. However, there were collective losses for five straight years during 2015-16 to 2019-20.
