PSU banks give record loans in festive month of October; boost credit flow to revive slowing economy

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Published: November 21, 2019 6:34:11 PM

The PSU banks stepped up credit flow for economic revival as record disbursal of Rs 2.52 lakh crore was seen in the festive month of October, the finance ministry said on Thursday.

I-T dept busts Rs 3,300-cr hawala racket involving infra firmsThe government in September had asked state-run banks to boost lending and hold outreach programmes or loans melas in 400 districts Image: PTI

The PSU banks stepped up credit flow for economic revival as record disbursal of Rs 2.52 lakh crore was seen in the festive month of October, the finance ministry said on Thursday. Of this, Rs 1.05 lakh crore was fresh lending, the department financial services said in a statement. The loans given to the financially stressed NBFC sector stood over Rs 19,000 crore in the given month. An amount of Rs 46,800 crore was given as a working capital loan, it said. PSBs are well capitalised and have sufficient liquidity to cater to credit demand as per prudential norms, finance secretary Rajeev Kumar said.

The government in September had asked state-run banks to boost lending and hold outreach programmes or loans melas in 400 districts to lend to desirable NBFCs and retail borrowers. The government organised loan melas in two phases, with the first leg from October 1 and 9 and the second one from October 21 to 25. It was mandated by the government to push retail loan growth directing the banks to hold loan melas in partnership with non-bank lenders in 400 districts.

Also read: Amid GDP growth fall, ICRA says there’s a ray of hope for economy

Meanwhile, the government recently announced several measures to boost the slowing economy including the amalgamation of the big banks: 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.

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