Finance Minister Nirmala Sitharaman will hold a review meeting with chief executives of public sector banks on Friday to debate various issues, including credit offtake, as a part of efforts to prop up the coronavirus-hit economy, sources said. The meeting was scheduled on May 11, but because of the stimulus package announcements, it was deferred, as they added. The meeting, to be held via video-conferencing, also will size up of rate of interest transmission to borrowers by banks and progress on the moratorium on loan repayments, the sources said.
The Reserve Bank of India had on March 27 slashed the benchmark interest rate by a massive 75 basis points and also announced a three-month moratorium to be given by banks to provide the relief to borrowers whose income has been hit because of the lockdown. Nirmala Sitharaman Also CEOs of public sector financial institutions will also be present at the meeting. The meeting assumes significance within the light of the over around Rs 20 lakh crore comprehensive economic package announced for the economy reeling under the corona virus crisis.
The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 percent through the Emergency Credit Line Guarantee Scheme for the MSME sector hit hard by the coronavirus crisis. Earlier this month, RBI Governor Shaktikanta Das held a gathering with heads of both public and personal sector banks to require stock of the economic situation and review the implementation of varied measures announced by the financial institution . The deployment of excessive funds by banks under the reverse repo route can also come up for discussion on Friday, sources said. Besides, progress under the targeted long-term repo operation for the NBFC sector and microfinance institutions, and sanctions under the Covid-19 emergency credit line also will be reviewed.