Finance Minister Sitharaman to meet CEOs of PSU banks on Oct 14

NEW DELHI: Finance minister Nirmala Sitharaman will meet heads of public sector banks (PSBs) on October 14 to take stock of the recent measures to push credit and revive growth before the festive season.
Sitharaman had announced a series of measures including loan outreach programmes to be undertaken before the festive season across 400 districts to push credit growth and improve the GDP growth. PSBs were to conduct the first phase of the outreach programme across 250 districts for four days starting October 3, with the next phase set to begin on October 21.

The department of financial services has written to heads of PSBs to attend the meeting, which will have specific issues of credit growth, fund flow to NBFCs as well marketbased fund raising by PSBs on the agenda.

The finance minister will also discuss credit provided to micro, small and medium enterprises (MSMEs), progress of the government’s 59-minute loan approval scheme and the assets purchased by PSBs from NBFCs under the partial credit guarantee scheme announced in the Union budget.

Sitharaman had in the budget announced a one-time partial credit guarantee of `1 lakh crore for first losses of up to 10% on the purchase of high rated pooled assets of financially sound NBFCs for six months.

These moves have been part of a larger effort to restore the economy to a higher growth trajectory after the GDP growth hit a six-year low of 5% in April-June. Besides measures to boost credit, the government has also cut corporate tax rates from 30% to 22% for existing companies and from 25% to 15% for new manufacturing companies.

The Reserve Bank has also cut interest rates in each of its five bi-monthly monetary policy committee (MPC) meetings this year by a total of 135 basis points to 5.15%, its lowest level since March 2010. In the latest MPC, the bank cut rates by 25 basis points and lowered its estimate for GDP growth in the fiscal from 6.9% to 6.1%.