NEW DELHI: On a day the RBI chief hinted at further steps to arrest the slowdown, Finance Minister Nirmala Sitharaman unveiled a scheme reminiscent of the loan melas of the 1980s to jump-start the economy before the festival season.
PSU banks along with NBFCs will hold ‘Shamiana meetings’ in 400 districts to give away loans to retail, housing, agriculture and MSME sectors from next week, she said on Thursday.
The shamiana meetings will be held in two tranches over the next month.
The idea is to ensure “maximum credit disbursal during the festive season”, she added.
Diwali, which falls in October, is considered to be the biggest shopping season in most parts of the country.
Hinting that those seeking credit will not be disappointed, she said, “Don’t want banks to only recycle loans with existing customers. Banks will be encouraged to include new retail customers for lending.” Banks have also been asked not to declare any stressed MSME loan as NPA till March 31, 2020.
Earlier in the day, RBI governor Shaktikanta Das advised the government to front-load its spending, warning there is little fiscal space for counter-cyclical measures to boost growth.
Blast from the past
In the 1980s, banks gave away loans in large numbers under orders from the govt to individual borrowers without collaterals. The socialist experiment saw bulk of the loans turning bad
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