New Delhi: Minister of Finance Nirmala Sitharaman is scheduled to meet with the head of the public sector (PSB) next week to review the performance of lenders and progress made by them to support the economy that was beaten by Pandemic Covid-19.
The bank will be urged to provide loan sanctions for the productive sector to accelerate the economic revival, said the source.
According to sources, a two-day meeting will begin on November 17 and conduct a comprehensive review of various segments, progress in the government scheme including Aatmanirbhar Bharat Abhiyan.
In addition to bankers, high-ranking officials from various ministries will participate to highlight large problems with the bank and suggest how to smooth the process.
High-ranking officials from the Ministry of Infrastructure, Agriculture and the Allied Department will be part of the meeting organized by the Ministry of Finance.
Given the importance of the banking sector in producing demand and increasing consumption, the source says meetings with MDS and PSB CEO are considered important.
The meeting came when the bank carried out an outreach program to encourage loans in the productive sectors of the economy.
Since the start of the government’s national credit outreach program on October 16, the Bank has gave sanctions 13.84 laps with a total RS 63,574 Crore through 10,580 camps held throughout the country on October 31.
In accordance with the data distributed by the Ministry of Finance, as many as RS 21,687.23 Crore in a business loan approved approved 3.2 Lakh beneficiaries, while vehicle loans worth 4,560.39 crore approved up to 59,090 borrowers.
This meeting is expected to take the stock of the banking sector, the progress of the 2.0 restructuring scheme announced by the Bank of India (RBI) reserves, said Source, added that the Emergency Credit Line Guarantee Scheme Rs 4.5 Lakh Crore (ECLG) will also be reviewed during the meeting.
In addition, the Minister of Finance is expected to take stock from a bad loan situation or non-performing assets (NPA), and discuss various recovery steps by the bank, they said.
As a result of the government recognition strategy, completion, recapitalization, and government reform, the NPA has decreased to Rs 7.39,541 Crore as of March 31, 2019 to Rs 6,78,317 Crore on March 31, 2020 and further to RS 6,16,616 Crore as on March 31, 2021 (temporary data).
At the same time the comprehensive steps were taken to control and influence the NPA recovery, which allowed PSB to recover Rs 5,01,479 Crore for the last six years, the government told the parliament recently.
To ease concern among bankers, the Ministry of Finance recently issued a uniform ‘staff accountability framework for NPA accounts to RS 50 Crore.
Looking to protect an honest bank employee, the government has come out with a framework where the officers concerned will not be lifted if a Bonafide decision that involves a loan to RS 50 Crore is wrong.
The framework will only include sincere decisions and not involving malifide deviations or intentions, according to the norms issued by the Ministry of Finance.
This determines the details and procedures that must be followed because they examine the act of negligence and such commissions in the part of the Bank officials concerned.
To save them from unnecessary hassle, this framework also provides the resolution of these cases to bankers.
“Banks must start and complete staff accountability exercises within six months from the date of the account classification as NPA,” the ministry said.
In the past, several senior bankers were arrested in the default case of loans.
FM to meet PSB’s head; encourage them for credit expansion
