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FM to take a call on credit growth

Meeting heads of PSBs today; will review various schemes on economy revival

Finance Minister Nirmala Sitharaman
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Finance Minister Nirmala Sitharaman

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New Delhi: Finance Minister Nirmala Sitharaman is scheduled to meet the heads of public-sector banks (PSBs) on Monday to review the performance of the lenders and the progress made by them on various schemes launched by the government for the revival of the economy.

Banks would be urged to sanction loans for productive sectors to accelerate the revival of the economy facing headwinds including from the Russia-Ukraine war, sources said. Last week during the Iconic Week celebration of the finance ministry, banks conducted outreach programs across the country where eligible borrowers have sanctioned loans on the spot. The Finance Minister would take stock of credit growth, asset quality, and business growth plan of banks, sources said, adding non-performing assets (NPAs) of Rs 100 crore and the recovery status would also be discussed. They said there would be a comprehensive review of various segments and progress in government schemes including the Kisan Credit Card, and 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 for 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, the review of capital requirements of banks and the 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 a profit in the second financial year in a row. They have more than doubled their net profit to Rs 66,539 crore in FY'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.

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