Honest borrowers will find it easier to get loans from public sector banks (PSBs) following the reforms being undertaken, Financial Services Secretary Rajiv Kumar has said, asserting that there would be a premium on integrity.
Honest borrowers will find it easier to get loans from public sector banks (PSBs) following the reforms being undertaken, Financial Services Secretary Rajiv Kumar has said, asserting that there would be a premium on integrity. The government this week announced a slew of reforms for the banking sector and said it will infuse an unprecedented Rs 88,139 crore capital in 20 PSBs before March 31 to boost lending and revive growth. Announcing the reforms, Finance Minister Arun Jaitley had said that stringent norms for disbursal of high value loans have been framed, with strict surveillance on big loan defaulters and mandatory reporting of loans of over Rs 250 crore if there is a breach of any covenant. PSBs have been reeling under non-performing assets (NPAs) or bad loans, which total around Rs 8 lakh crore and have hampered lending, impacting growth. “One of the key objectives of the reform process announced by the government is to put a premium on the integrity of borrower and make need-based funding easy and hassle free or genuine and honest borrowers,” Kumar told PTI.
In addition to various fintech tool, he said, GST return filed by anyone gives fair idea to banks about the cash flow. Banks can thus decide about sanction of loans, Kumar said, adding that rigorous due diligence and ring-fencing of cash flows would ensure safety and security of loans sanctioned. He said special focus will be there on micro, small and medium enterprises (MSMEs), financial inclusion and job creation. For easy access to finance for the MSME sector, it has been decided they would make online application for loans that would be 100 per cent automated and decision making would be tracked at each stage.
Decision with regard to loan application has to be finalised within 15 days for the online proposal made through Udyamimitra.com. As part of government resolve to fund the unfunded, banks would also focus on enhancing exposure to MUDRA and Stand Up India. Since the launch of Mudra Yojana by Prime Minister Narendra Modi in April 2015, banks have disbursed more than Rs 3.80 lakh crore to over 8.90 crore beneficiaries.