Modi tells bank chiefs to boost MSME loans
GOVT BACKING The PM told top private and public banks to push lending in the agriculture sector amid disruption caused by Covid-19
NEWDELHI: Prime Minister Narendra Modi met heads of top private and public sector banks and nonbank lenders on Wednesday and urged them to scale up lending to micro, small and medium enterprises (MSMES) and agriculture amid the disruption caused by the coronavirus pandemic.
In a video conference that lasted for over three hours, lenders presented a wish-list to the prime minister, in which they expressed their need to raise capital and fast-track digital lending and the need for the government to implement reforms on agriculture and housing, an official familiar with the development said on the condition of anonymity.
“It was a feedback-taking session with the prime minister. He told banks and financial institutions to continue to focus on economic revival. Banks have been assured support from the government,” another official said.
On Tuesday, a statement from the Prime Minister’s Office said subjects of discussion would include credit products and efficient models for delivery, financial empowerment through technology, prudential practices for stability and sustainability of the financial sector.
Top officials from the finance ministry, including financial services secretary Debashish Panda, heads of State Bank of India, Punjab National Bank and Bank of Baroda, among others, were part of the meeting.
Since March, the Reserve Bank of India (RBI) and the finance ministry have announced a slew of measures to help businesses tide over the Covid-19 crisis. However, a sustained rise in infections, and a partial lockdown in some states have continued to put businesses and lenders under pressure, with most of them expecting a second round of stimulus from the government.
Banks, particularly, may come under immense pressure.
Last week, the central bank said non-performing assets are expected to rise to a 20-year high to 12.5% of total advances by March 2021. RBI warned that if the economic conditions worsen further, this may soar to 14.7% under the very severely stressed scenario.
Anuja contributed to the story.