New Delhi: Finance Minister Nirmala Sitharaman met private sector banks, non-banking finance companies (NBFCs) and housing finance companies on Thursday, sources said. At the meeting, a number of issues were taken up for discussion like liquidity, rate cut, credit disbursal, the sources added.
The meeting comes as many NBFCs like IL&FS, DHFL and Altico have defaulted on interest payment availed from the banks, causing a credit crunch in the sector. Many banks have tightened the noose around credit flow, fearing large scale defaults on existing loans. The Finance Minister has announced a slew of measures in the past few weeks to rejuvenate the economy.
Here are highlights from the meetings:
- Most banks to follow external benchmark-based lending from October 1, said Uday Kotak after FM's meeting with private bankers.
- If there was a problem of liquidity, it was in the wholesale financing, and not in the retail, said Nirmala Sitharaman
- On the whole it was very tonic-like meeting, where I heard a lot of positive things. Not one voice said there was a concern, shortfall of demand. None of them voiced liquidity concerns, said Sitharaman
- Low commercial vehicle demand a cyclical problem, said Sitharaman
- Sitharaman said private bankers told her, slump in commercial vehicle sales is cyclical; sentiments driving lower passenger vehicle sales
- Affordable housing scheme has taken off well, said Sitharaman
- Service sector showing high appetite for credit: Nirmala Sitharaman
- There is immense possibility to reach out to them provided of course there are some simpler tweaking that we can do using their salaries and cash they earn also as a part can be used for their credit assessment, said Sitharaman
- Loans for affordable housing scheme taken off well; demand from bankers to raise limit to Rs 50 lakh from current Rs 45 lakh: Sitharaman
- Many of the MFIs and micro-finance units which have come here are in deep country, they said that in those areas there is still demand and they are extending loans. All of them clearly voiced a positive growth which is a good encouraging story: Finance Minister
- Small banks seem to be going on a smooth map: Sitharaman
- No shortage of liquidity says Sitharaman after meeting with the bankers
- Most MFIs sees demand in rural India
- Private sector banks will join outreach programme in 400 districts for potential lending: Finance Secretary Rajeev Kumar
- Festival season is coming. Therefore, we have all decided to join the outreach program and step up their efforts in various districts, Kumar said