Friday, September 30, 2022

What happened at RBI Governor’s first meeting with PSB heads?

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PW Bureau

The meeting was cordial and ended with the PSBs making a pitch for easing rules to recognise bad loans

New Delhi: The first meeting that Reserve Bank of India (RBI) Governor Shaktikanta Das had with public sector banks (PSBs) immediately after taking the reins of the new job was cordial and ended with the PSBs making a pitch for easing rules to recognise bad loans.

“In keeping with a well-articulated consultative approach, the governor had free-flowing discussions on important issues like liquidity, credit offtake, and conditions of MSMEs and finance companies,” said a senior banker familiar with the development.

PSBs seeks a revision of RBI February circular

Highlighting the sore spots in the RBI’s February 12 circular, PSB chiefs sought a relook at provisions for resolving stressed assets. A key bone of contention is the rule recognising loan default from day one and initiating steps for resolution.

Bankers gave an assessment of the liquidity situation in the busy and festive season and fund requirements, and the impact of the RBI’s liquidity management operations, sources said.

The chairman of State Bank of India and managing director, and chief executives of six public sectors banks including Bank of Baroda, Central Bank of India and Union Bank of India attended the meeting. Das will hold discussions with the chiefs of PSBs outside Mumbai in the next few days. This will be followed by interactions with the heads of private sector banks.

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