Public sector banks, along with NBFCs who they have given liquidity to, will hold open public meetings in 400 districts around the nation to extend loans to borrowers, including MSMEs, farmers and homebuyers. Customers can attend these gatherings to get loans from banks and NBFCs, announced Finance Minister Nirmala Sitharaman during a press briefing on Thursday.
Anurag Thakur, Minister of State in the Finance Ministry, will supervise the initiative that will be conducted in two tranches, covering 200 districts in each leg. The public meetings will begin from September 24.
"In public view, the scheduled banks will now show that they are really indeed pushing liquidity through the NBFCs or directly to the customers. This shall happen in first 200 districts between Tuesday (September 24) and September 29. After this, the next 200 districts will happen between October 10 and October 15," Sitharaman said.
"The borrowers can belong to the famous RAM (Retail, Agriculture and MSMEs) categories. We want borrowers who want loans for vehicles and houses also to attend these open public meetings," the Finance Minister said.
The loans availed at these gathering could be anywhere from Mudra and SHGs to MSMEs and FPOs, the Finance Minister added.
During these public meetings, banks have been asked to extend loans to five new customers for every one old customer who wants credit, said FM Sitharaman. "We do not want recycling of loans. Old customers can also get it, but news ones will also have to be brought in," she added.
FM Sitharaman also said that banks have been asked not to declare any stressed MSME as non-performing assets (NPAs), even after 90 days of default, till March 31, 2020. She further added that banks have been asked not to recast existing debts of MSMEs.
Earlier today, FM Sitharaman met heads of public-sector banks to review the liquidity situation of lenders and steps taken by them to pass on the 110 bps rate cut by RBI.
"The discussion was in great detail. Banks have started doing a lot on the announcements that were made and on some of the budgetary provisions," FM Sitharaman said at the beginning of the press meet.
The Finance Minister also reviewed the implementation of series of measures announced since August 23, including consolidation of 10 public sector banks into four, in order to boost economic growth.