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Union finance minister Nirmala Sitharaman will hold a review meeting with chief executives of state-run banks on Monday to discuss several issues as part of efforts to shore up the economy hit by the coronavirus pandemic.
The meeting comes at a time when the Center is likely to roll out its next relief package to offset the deepening economic crisis during the coronavirus pandemic and the ensuing triple-phased lockdown.
Before this, Reserve Bank of India (RBI) governor Shaktikanta Das held a meeting with heads of both public and private sector banks earlier this month to take stock of the economic situation and review the implementation of various measures announced by the central bank.
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The central bank had on March 27 slashed its repo rate, its benchmark interest rate, by a massive 75 basis points and also announced a three-month moratorium to be given by banks to provide relief to borrowers whose income has been hit due to the lockdown .
Interest rate transmission to borrowers by banks and progress on a moratorium on loan repayments will also be on agenda during Monday’s meeting via video-conferencing.
News agency PTI said, citing unnamed sources, that the deployment of excessive funds by banks under the reverse repo route may also come up for discussion on Monday.
Progress under the targeted long-term repo operations (TLTRO) for non-bank financial companies (NBFC) sector and microfinance institutions (MFIs) and sanctions under the Covid-19 emergency credit line will also be reviewed.
Under the emergency credit line, borrowers can avail a maximum of 10% of the existing fund-based working capital limits, subject to a cap of Rs 200 crore.
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Public sector banks have sanctioned loans worth Rs 42,000 crore to the MSME sector and corporates since the start of the lockdown.
Nirmal Sitharaman had said last Thursday that as many as 3.2 crore borrowers have taken advantage of the three-month moratorium scheme on repayment of loans announced by RBI.
PSBs complemented RBI on loan moratorium. Their effective communication & proactive actions ensured that over 3.2 cr. a / c availed 3-month moratorium. Quick query redressals allayed customer concerns. Ensuring responsible banking amid #lockdown, ”the finance minister had tweeted.
Sitharaman also said state-owned banks have sanctioned loans worth Rs 5.66 lakh crore to borrowers during March and April and that its disbursement will start soon after the Covid-19 lockdown is lifted.
She said the banks sanctioned loans worth Rs 77,383 crore between March 1 and May 4 to provide sustained credit flow to NBFCs and housing finance companies.
Besides, under TLTROs, total financing of Rs 1.08 lakh crore was extended, “ensuring business stability and continuity going forward”, she had said.
(With agency inputs)
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