FM Nirmala Sitharaman to review credit growth with public sector banks chiefs

Finance minister Nirmala Sitharaman is scheduled to meet chiefs of public sector banks (PSBs) on Monday to review the credit growth in various sectors of the economy.

The meeting is likely to set priority areas for the banking sector in the coming months for accelerating the gross domestic product (GDP) growth.

The minister is expected to discuss credit flow to micro, small and medium enterprises (MSMEs), non-banking financial companies (NBFCs), housing finance companies (HFCs), retail and auto sector.

According to the Financial Stability Report of RBI in June, credit growth of scheduled commercial banks (SCBs) picked up, with public sector banks (PSBs) registering near double-digit growth. Capital adequacy of the scheduled commercial banks improved after the recapitalisation of PSBs.

The minister will also meet stakeholders this week to finalise decisions and timelines for action on the U K Sinha panel report on MSME sector.

As many of the actions proposed by the committee involve inter-ministerial coordination, the minister will be holding a meeting within this week with the revenue and expenditure departments, MSME ministry, and also ministries IT, rural development, health and family welfare, corporate affairs and commerce as well as telecom to finalise decisions and timelines for action.

The expert committee headed by U K Sinha, which submitted the MSMEs recommendations for the sector's development in June, suggested Rs 5,000 crore stressed asset fund for MSMEs on the lines of the Textile Upgradation Fund Scheme in relief to small businesses hurt by demonetisation, Goods and Services Tax and the ongoing liquidity crunch.