Nirmala Sitharaman meets PSU banks, assures of ‘enough liquidity’ in system

15/10/2019

new delhi: Finance Minister Nirmala Sitharaman on Monday said public-sector banks have sufficient liquidity. The minister also said efforts are being made to ensure that due payments are released to the micro, small and medium enterprises (MSME) sector by large corporates.
After a review meeting with heads of public-sector banks (PSBs), Sitharaman, at a press conference, said banks have been asked to provide bill discounting facility to MSMEs against payments due from large corporates.
According to returns filed by large corporates, as much as Rs.40,000 crore is due to the MSME sector, Sitharaman said.
“Big corporates have reported to the MCA in the regular returns that they owe Rs.40,000 crores to the MSMEs.
The banks agreed that since they suffer the most from shortage of cash during these camps they will reach out to all these MSMEs to do the bill discounting," finance and banking secretary Rajiv Kumar said.
He said as much as Rs.81,781 crore was disbursed in the first phase of the outreach programme or loan mela organised by state-owned banks across over 200 districts during 1-9 October. Of these, new term loans accounted for Rs.34,342 crore. The second outreach programme will start ahead of Diwali from 21 October and will continue for the next four days. To increase credit disbursal, Sitharaman had last month said banks, and other financial institutions such as small finance banks, microfinance institutions, and non-banking finance companies (NBFCs) start outreach programme across 400 districts across the country, in two phases, to give loans pertaining to various categories, including agriculture, MSMEs, vehicles.“All public sector banks are now maintaining their regulatory capital, they have sufficient liquidity and therefore they are very robust," Kumar said.
As far as concerns pertaining to slowdown in the economy is concerned, Sitharaman said the government has not set up a turnaround time right now, but has been constantly meeting, hearing and responding to the industry and concerned stakeholders.
In the last few weeks, World Bank, other multilateral institutions, rating firms and brokerages have cut their growth estimates for India, after Asia’s third-largest economy grew at the slowest pace in six years in April-June quarter at 5% because of a demand slump.
On Sunday, the World Bank slashed its economic growth forecast for India to 6% for the current fiscal from its April projection of 7.5%, citing a broad-based and severe cyclical slowdown. Similarly, on Thursday, Moody’s Investors Service lowered its 2019-20 growth forecast for India to 5.8% from 6.2% earlier, saying the economy was experiencing a pronounced slowdown partly due to long-lasting factors.

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