FM Nirmala Sitharaman to Meet PSU Bank Chiefs on Friday, to Review Credit Flow

Finance Minister Nirmala Sitharaman will hold a review meeting with CEOs of public sector banks (PSBs) on Friday to discuss various issues, including loan disbursement, as part of efforts to revive the economy reeling under the COVID-19 impact, sources said.

The meeting, which was earlier scheduled for May 11, got deferred due to the stimulus package announcements, they added.

The meeting assumes significance as the banking sector has to implement many schemes under the Rs 21 lakh crore economic package announced by the finance minister in five tranches last week.

The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday gave its nod for many of the schemes announced as part of 'Aatma Nirbhar Bharat Abhiyan' package to prop up the economy reeling under the COVID-19 crisis.

The meeting, to be held via video-conferencing, will also take stock of interest rate transmission to borrowers by banks and progress on moratorium on loan repayments, the sources said.

The RBI had on March 27 slashed the benchmark interest rate by a massive 75 basis points and also announced a three-month moratorium to be given by banks to provide relief to borrowers whose income has been hit due to the lockdown.

At the Friday meeting, chief executives of public sector financial institutions will also be present as some of the schemes have to be implemented by them.

The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through the Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus crisis.

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 Friday, sources said.

Besides, progress under the targeted long-term repo operations (TLTRO) for the NBFC sector and microfinance institutions (MFIs), and sanctions under the COVID-19 emergency credit line will also be reviewed.