Saturday, November 27, 2021
Home > Finance News > FM Nirmala Sitharaman asks banks to conduct credit outreach programme across India

FM Nirmala Sitharaman asks banks to conduct credit outreach programme across India


The finance minister Nirmala Sitharaman on Wednesday announced that she has asked state-run banks to step up lending and hold outreach programmes or loans melas across India from October to lend to desirable borrowers, in order to give momentum to the stimulus package. Sitharaman said that it was too early say that there is lack of credit demand in the economy.

“This year too sometime in October, there will be a credit outreach in every district of the country,” the finance minister said. “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.”

The outreach programme or loan melas that was mooted in 2019, are aimed at meeting the demand of borrowers during the festival season. Last year, in a period of four days agriculture, vehicle, home, education and personal loans were sanctioned. At the end of March 2021, almost Rs 4.94 lakh crore was distributed under the credit outreach programme (between October 2019 and March 2021).

The planned outreach programs come at a time when the credit growth in the banking system has been ranging between 5-7% because of slugging demand for big-ticket corporate loans and also due to risk aversion among bankers given the rise in defaults in retail segment because of the second wave of COVID-19 pandemic.

“I think it too early to conclude whether there is lack of demand, we have been addressing credit requirements of small and medium businesses in particular in various ways,” the minister said. “Banks have shown extreme nimbleness in reaching out. 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 also said that she had asked banks to come up with specific plans for the north eastern states so that businesses and requirements of these states are met.

“Be it Odisha, Jharkhand or West Bengal where CASA deposits are disproportionately high as compared to the credit extended to them,” the minister said.

Sitharaman also praised the performance of public sector banks and added that there were now in a position to raise funds from the capital markets to cater to growth capital requirements.

The minister also approved a proposal to enhance family pension and employer contribution under the National Pension Scheme. As per the earlier scheme there were slabs of 15%, 20% and 30% of the last drawn salary, which was capped at a maximum of Rs 9284.

“Now, the cap has been completely removed and a uniform slab of 30% at the last drawn salary will be entitled as family pension. This would go as high as Rs 30,000-Rs 35,000 per family,” said Debashish Panda, financial services secretary. “The employer contribution to NPS corpus has also been hiked to 14%.”

Meanwhile, the rules for letting companies to list overseas may come up in the February budget, as some issues are yet to be resolved and are under discussion, Revenue Secretary Tarun Bajaj said.

“The direct lisiting is under consideration of the government because to make it success there would be requirements and amendments to legislations to ensure there is smooth trading of these outside the territory of India,” Bajaj said. “We are in discussions to the players that are asking for this. May be in the budget session we will see what we can do.”



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: