The finance minister also said banks have been urged not to report any stressed MSME loan accounts as non-performing assets until March 2020.
Regarding the proposed credit surge, she said, “They can belong to the famous RAM category which is retail, agriculture (farmers), they can also belong to MSME sectors. We also add those who want loans for homes, those who want loans for vehicles to come also there. ”
“The range can be anything, self-help groups, Mudra, vehicle loans, housing loans, MSMEs, all farmer organizations, any of them can come and this that day, sitting there, they can sort out the loan needs, ”FM Sitharaman said. a press conference after a meeting with bank chiefs.
Government wants to increase credit consumption during festival season
Detailing the latest measures taken by the government to ensure greater consumption of credit, Sitharaman said the banks as well as the NBFCs would sit under “shamianas” in a public place and meet the lending requirements of various groups.
This, she said, was done to let everyone see the banks going out and providing credit and to dispel the idea that planned commercial banks are sitting with liquidity.
Sitharaman said that in the first phase, which will start next Tuesday and end on September 29, 200 districts will be covered. Thereafter, the next 200 districts will be covered between October 10 and 15. “Thus, in two installments, 400 districts of the country will have their NBFC or NBFCS of district which operate in this zone in connection with banks and bringing new customers to come to take credit. “Sitharaman said, adding that the banks had learned that for every old customer five new customers had to be recruited.
“This is the rule of thumb that we have proposed. That for every customer who wants a loan, please give it. But for every new one, which you give now, you will bring someone fresh, someone who has never taken a loan from a bank should be brought in and given for the category they want, ”said Sitharaman. The FM said Deputy Finance Minister Anurag Thakur would oversee the PSU banks’ lending program.
The government is keen to ensure that demand for credit accelerates during festival season to help revive demand for goods ranging from consumer goods to housing and retail loans. The Center unveiled a series of measures to counter the impact of a slowdown in economic growth that slowed to a 6-year low of 5% in the April-June quarter, triggering a call for action to support growth.
Regarding assistance to MSMEs, Sitharaman said that an existing Reserve Bank provision allows banks not to declare them NPA even after the 90 days. “So if there are MSMEs with stressed assets, the banks have enough powers given by the Reserve Bank not to declare it NPA and work with them if possible to restructure their loan so that it can come out of the bank. difficult situation, “said FM. .