The banks' purchases of pooled assets of NBFCs and housing finance companies up to Rs 1 lakh crore, as announced in the Budget, will also be monitored.
Amid the growing clamour for steps to boost the flagging consumer demand, the finance ministry has convened a meeting with chiefs of state-run banks, including SBI and Punjab National Bank, on September 19 to see if they have passed on the benefits of the repo rate cuts to customers.
Finance secretary Rajiv Kumar will review public-sector banks’ (PSBs’) progress in introducing “repo rate-linked loan products to step up affordable credit”, a source told FE. He will also take stock of PSBs’ credit disbursement to small businesses and traders, and their collaboration with non-banking financial companies to boost advances. The banks’ purchases of pooled assets of NBFCs and housing finance companies up to Rs 1 lakh crore, as announced in the Budget, will also be monitored.
The progress on some of the reforms measures, recently announced by finance minister Nirmala Sitharaman, including mandatory release of security documents within 15 days post-loan closure, will also be reviewed. These apart, banks’ analysis of state/ regional/branch-level performance will also be discussed, following an extensive exercise since August. While the first round of this exercise, mandated by the finance ministry, had involved seeking inputs from branch-level officers, the second leg focused on inter-bank sharing of ideas. The move is part of the government’s drive to promote a “bottom-up” approach to herald banking reforms. While the overall credit growth is still at about 12%, the flow of loans to SMEs has remained weak.