Finance minister Nirmala Sitharaman will be meeting the Chief Executive Officers (CEOs) of public sector banks (PSBs) on October 14 to take the progress on the recent measures taken pertaining to push credit and revival of growth prior the festive season.
Sitharaman had earlier announced several measures including loan outreach programmes to be initiated before the festive season across 400 districts for pushing credit growth and improvement in the GDP growth.
PSBs were directed to organise 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 sent a written communique to the heads of PSBs to attend the meeting, which will have specific issues of credit growth, fund flow to NBFCs as well market-based fund raising by PSBs on the agenda.
The union finance minister will also be discussing credit provided to micro, small and medium enterprises (MSMEs), progress on the government’s 59-minute loan approval scheme and the assets bought by PSBs from NBFCs under the partial credit guarantee scheme announced in the Union budget.
Sitharaman had announced a one-time partial credit guarantee of `1 lakh crore for first losses of up to 10 percent on the purchase of high rated pooled assets of financially sound NBFCs for six months, in the Union Budget.
These steps were a part of a superior effort to restore the economy to a higher growth level after the GDP growth hit a six-year low of 5% in April-June.
Besides the steps taken to boost credit, the government has also cut corporate tax rates from 30 percent to 22 percent for existing companies and from 25 percent to 15 percent for new manufacturing companies.
The Reserve Bank has also slashed 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 percent, 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 percent to 6.1 percent.