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Sitharaman calls for loan melas in 400 districts

NEW DELHI: NEW DELHI: Union Finance Minister Nirmala Sitharaman on Thursday announced a country-wide loan disbursement initiative from banks along with relief to stressed medium and small scale industries (MSMEs) whose sticky loans will not be declared non-performing assets till the end of the current fiscal.

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Tribune News Service
New Delhi, September 19

Union Finance Minister Nirmala Sitharaman on Thursday announced a country-wide loan disbursement initiative from banks along with relief to stressed medium and small scale industries (MSMEs) whose sticky loans will not be declared non-performing assets till the end of the current fiscal.

Public Sector Banks (PSBs) have reported weighted average rate cuts of 27-basis points till August 2019.

Another 10 out of the 18 PSBs have affected additional rate cuts ranging from 15 to 5-basis points in the current month.

Fifteen PSBs have already introduced repo-rate-linked loan products for housing and vehicles, consumer credit, cash credit limits and mortgage-based loans.

Over one lakh repo-linked proposals, amounting to over Rs 40,000 crore, have been sanctioned.

The remaining three PSBs such as Oriental Bank of Commerce will also be introducing such products by October 1. These measures are aimed at improving access to affordable credit.

Since the announcement of consolidation of PSBs, all 10 banks have accorded in-principle approval to the proposals.

They have assured the finance minister that there will not be any disruption in credit-decision making due to process of amalgamation.
Employee interests are being protected through learning and growth opportunities for the employees.

Addressing a news conference, Sitharaman said PSBs will hold meetings in 400 districts with non-banking-finance companies and retail borrowers in 400 districts.

The public meetings by banks will be held in two phases, both a week long.

The first meeting will kick off on September 24 and last till September 29 in 200 districts.

The remaining 200 districts will be covered between October 10 and 15.

The disbursements camps are intended to ensure that there is maximum credit disbursal during the festive season.

Diwali, which falls in October this year, is considered the biggest shopping season. During the public meetings, credit will be provided for retail, agriculture, MSME and housing sector, among others.

In a relief to stressed MSMEs, Sitharaman also said banks have been asked not to declare their outstanding loans as NPAs till March 31, 2020.

In the meantime, the banks will work on a formula to recast their debt. The decision is in line with a RBI circular that provides for stressed loan accounts of MSMEs not being declared NPAs.

On the review with PSB CEOs, Sitharaman noted that that loan disbursement to key sectors was robust in the last fiscal.

This year, the PSB pool buy-out of NBFC/HFC till September this year was Rs 93,018 crore while proposals of another Rs 33,200 crore were in the pipeline.

To support decision making and to prevent harassment for genuine commercial decisions by bankers, CVC has issued directions to classify cases as vigilance and non-vigilance along with setting up of an advisory board for first level examination to decide whether the case is a criminal act or a genuine commercial decision.

This will apply to large fraud cases above Rs 50 crore and is aimed at instilling a sense of protection among bankers from prosecution for genuine decisions and promote lending.

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