Finance Minister to meet private banks on Thursday, loan benchmarking, MSME credit on agenda

Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman is planning to meet private lenders on Thursday and likely to hold significant discussion on external benchmarking of retail loans as directed by the Reserve Bank of India (RBI) from October 1, and how banks are spreading awareness among customers about the step.

Nirmala Sitharaman

The meeting will commence at 5:30 pm.

In reaction to the meagre transmission of interest rates by banks, the apex bank, earlier this month, had mandated that all the lenders to sync retail loans with an external benchmark, such as the repo rate. All lenders are asked to begin such products by October 1.

On the sidelines of this direction, finance minister will take a review on how the lenders are helping the needy segments of the borrowers, namely micro, small and medium enterprises (MSME) and non-banking financial companies.

The finance minister will also be discussing the experience of the private lenders on liquidity infusion facilities offered by the National Housing Bank.

The meeting with private banks is to be held a week after the major announcements by the finance minister after her meeting with the chief executives of public sector banks (PSBs) last Thursday. Sitharaman had then announced several new measures, such as loan camps across 400 districts of the country and that PSBs would not declare stressed MSME assets non-performing assets, as directed by the RBI circular.

The press conference, post the scheduled meeting, is likely to commence at 7 pm on Thursday.

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