Published 10:21 IST, September 19th 2019
Finance Minister to hold a review meeting with Public Sector Banks
FM Nirmala Sitharaman will hold a review meeting with the PSBs on Thursday to discuss various issues, including follow up on transmission of monetary policies.
Finance Minister Nirmala Sitharaman will hold a review meeting with the Public Sector Banks (PSBs) on Thursday to discuss various issues, including the follow up on transmission of monetary policy rates. According to an agenda item of the meeting, the government is set to ask PSBs to expeditiously introduce repo-rate linked products "to step up affordable credit".
Linking Retail Loans
The Reserve Bank of India (RBI) earlier this month had made it mandatory for banks to link all their fresh retail loans to an external benchmark. This will be effective from October 1 with the Central Bank's repo rate being one such benchmark. Following RBI's move, banks such as Punjab National Bank (PNB) and Allahabad Bank announced linking their retail loans with the RBI's repo rate.
Other discussions
The Finance Ministry will also discuss ways in which PSBs can offer doorstep banking facility. Some PSBs offer doorstep banking for citizens over 70 years of age and differently-abled customers. Additionally, the ministry will discuss how banks can help customers in tracking online loan applications for retail, MSME (micro, small and medium enterprise), housing, and vehicle loans, among others. It will also ask the top management of banks to closely monitor "loans to MSMEs, small traders, SHG (self-help groups) and microfinance institutions, borrowers and collaboration of banks with non-banking financial companies for co-origination of loans."
Further, the Centre will review the announcement made by the Finance Minister last month to mandate release of security documents within 15 days of loan closure. The move is intended to help customers, especially in the corporate sector, who face difficulties in applying for various clearances due to pending loan repayment. The ministry will take a stock of pooled assets of Non-Banking Financial Companies (NBFCs) or housing finance companies purchased by PSBs, following a one-time credit guarantee of up to Rs 1 trillion announced in the Budget 2019-20.
Updated 13:52 IST, September 19th 2019