FM Nirmala Sitharaman says no liquidity crisis post 'tonic-like' meet with private banks

NEW DELHI: Finance Minister Nirmala Sitharaman today announced a mega credit outreach plan after hours of deliberation with private sector banks, NBFCs and Housing finance companies.

Weeks after meeting public sector bankers, the finance minister met private sector lenders and financial institutions that, according to her, categorically stated they are not facing liquidity crisis. They also said there is enough demand for loans, she added.

"There is a demand and the banks don't mind lending. Things are looking forward and upward; consumption is happening, demand will get back in festive season,"the FM said while addressing the presser.


"On the whole, it was a very tonic-like meeting where I heard good things, positive thing," she said, and added that "the message I got is that consumption is happening".

She indicated that economic slowdown seems to have bottomed out and the coming festive season will help the economy start looking up. The GDP growth in the first quarter of the current financial year slipped to an over six-year low of 5 per cent.

Here are key announcements from FM's address:

• To take advantage of festive season the government has decide to take outreach programme in more than 400 districs. All banks have decided to join the programme. The First round of bank outreach programme in 250 districts on October 3 to 7.
• Micro finance companies are steering strong loan demand in rural areas.
• Service sector showing high appetite for credit.
• Affordable housing scheme took off really well. Loans for affordable housing scheme taken off well; demand from bankers to raise limit to Rs 50 lakh from current Rs 45 lakh.
• Slump in commercial vehicle sales is cyclical and likely to pick up in the next one or two quarters., Sitharaman quoted private bankers telling her.
• Small finance companies are on a smooth path.

With inputs from PTI