Finance minister, PSB heads to talk ways to prop up economy today

NEW DELHI: Finance minister Nirmala Sitharaman will hold a meeting with the heads of public sector banks on Saturday to discuss various issues including recent government measures to prop up the economy.

The meeting comes amid demands for easier credit flow to industry and consumers to boost demand.

Sitharaman will review implementation of the budget announcement on the absorption of merchant discount rate charges by banks and the overdraft facility to PM Jan Dhan Yojana account holders through RuPay debit cards.


“Business establishments with annual turnover more than Rs 50 crore shall offer such low-cost digital modes of payment to their customers and no charges or merchant discount rate shall be imposed on customers as well as merchants,” she had proposed in her budget speech. “RBI and banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment.”

A performance review of the online platform for the auction of secured assets under the SARFAESI Act is also on the agenda, said a person privy to the matter.

The recovery of non-performing assets through both the National Company Law Tribunal and other means is expected to be discussed. Banks have recovered Rs 4,01,393 crore over the past four financial years, including a record Rs 1,56,702 crore during 2018-19.

The meeting is expected to take stock of the banking sector and how to push loan growth, the people said, adding that the lenders may be nudged to further cut interest rates to fully pass on transmission of the repo rate cut.

Although the Reserve Bank of India has made credit cheaper, lending rates are increasing after accounting for inflation and falling economic growth.

As the bad loan recognition process nears completion, the level of gross non-performing loans of banks improved to 9.1% as of end-September compared with 11.2% in 2017-18, RBI said in a report.