Finance Minister Nirmala Sitharaman on Thursday said that the banks have started moving in the direction of reforms announced by the government.
Finance Minister Nirmala Sitharaman on Thursday said that the banks have started moving in the direction of reforms announced by the government. Among the several decisions taken in the meeting with PSU bank heads today, Nirmala Sitharmaan said that the government has planned to hold ‘loan melas’ to encourage lending amid the ongoing slowdown. The liquidity situation has been also been reviewed with the banks and some of them have even identified NBFCs they can lend to now, she said. The government plans to links NBFCs and retail customers with banks of 400 districts in two tranches across the country. No stressed asset MSME will be declared an NPA, she said, adding the banks should sit with such stressed MSMEs and help them get out of situation till March 31, 2020.
Earlier today, finance minister held a meeting with the PSU bank heads to discuss easing liquidity conditions and providing operational support, after her announcement to merge 10 PSU banks into four bigger and stronger lenders. Even as the government says the merger would improve the banking scenario in the country, bank officials and unions have shown resentment about the move. The unions have announced a protest at Delhi’s Jantar Mantar on Saturday.
The government in August announced the merger of 10 PSU banks into four strong lenders. After this, the total number of PSBs will come down to 12 from 24 banks, Nirmala Sitharaman had said at a press conference on August 30. The announcement of the big banks merger plan includes 1) merger of Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank to form the second-largest public sector bank in the country, after the State Bank of India (SBI); 2) merger of Canara Bank and Syndicate Bank to create India’s fourth-largest PSU bank; 3) merger of Union Bank of India with Andhra Bank and Corporation Bank to build India’s fifth-largest lender, and; 4) merger of Indian Bank with Allahabad Bank to make India’s seventh-largest PSU bank. The government already announced infusion of Rs 70,000 crore last month with an aim to recapitalise the debt-struck PSU banks.