Speed Post News Network
Mumbai : Union Finance and Corporate Affairs Minister Nirmala Sitharaman chaired a post-budget meeting with heads of Banks, Non-Banking Financial Institutions (NBFCs), and Financial Institutions at Mumbai, Maharashtra, on February 22, 2022.
The meeting was attended by Union Minister of State for Finance Dr. Bhagwat Kishanrao Karad; Sanjay Malhotra, Secretary, Department of Financial Services; Ajay Seth, Secretary, Department of Economic Affairs, and Dr V Anantha Nageswaran, Chief Economic Adviser. The heads of all Public Sector banks, select Private Sector Banks, NBFCs, and Financial Institutions were also present during the meeting.
Underscoring the importance of information sharing and collaboration, the Finance Minister exhorted all the banks to sign up to the Account Aggregator model which would facilitate seamless flow of credit for small borrowers and promote digital lending. Sitharaman directed that pilots for Account Aggregator model and cashflow-based lending may be replicated in different regions across the country including in the North Eastern Region, on the lines of the initiative by two banks in Varanasi District in Uttar Pradesh, according to a PIB release.
The meeting deliberated on various budget announcements in the context of PM GatiShakti, Defence, Telecom, Manufacturing & exports, Emergency Credit Line Guarantee Scheme (ECLGS) and tax concessions to new manufacturing units and start-ups, which offer new opportunities to the financial sector.
The meeting discussed various schemes/programmes such as subordinated debt to MSMEs, KCC, Aatma Nirbhar Bharat Schemes, and credit outreach programme which provided immediate relief to the borrowers and the banks, from the impact of the Covid-19 pandemic. ECLGS, which has been enhanced to Rs 5 lakh crore and extended up to March 31, 2023, was also discussed.
It was emphasised that digital banking, digital payments, and fintech innovations are an opportunity for banks to find new ways to reduce the cost of intermediation and provide cost-effective services and that the benefits of digital banking should reach every nook and corner of the country in a consumer-friendly manner. It was further stressed that banking industry should target to open accounts of unbanked adults under Jan Dhan Yojana and ensure Insurance/Pension coverage to all eligible adults.
It was highlighted at the meeting that with a record profit of Rs 1.22 lakh crore in FY 20-21 and Rs. 0.79 lakh crore in HY 21-22, declining Gross NPA figures to 6.90% (as on Sep’21) from all-time high of 11.20% (as on Mar ’18) and sufficient buffers with all time high CRAR ( Capital- to- Risk Weighted Assets Ratio) of 16.5% (as on Sep ’21) against the regulatory mandate of 11.5%, banks are in a strong position to support future growth enabling the country’s economy for a take-off. The way forward for stepping-up the lending activity and building a conducive credit environment for businesses and individuals was also stressed upon during the meeting.