SME Times News Bureau | 22 Feb, 2022
Union Minister for Finance Nirmala Sitharaman chaired a post-budget meeting with heads of Banks, Non-Banking Financial Institutions (NBFCs) and Financial Institutions on Tuesday in Mumbai.
The
meeting was attended by Union Minister of State for Finance Dr. Bhagwat
Kishanrao Karad; Shri 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 in 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.
The Minister directed that pilots for
Account Aggregator model and cashflow-based lending may be replicated in
different regions around the country including in the North Eastern
Region, on the lines of the initiative by two banks in Varanasi
district.
The
meeting deliberated on the 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 31.3.2023, 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 in 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 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 in the meeting.