NEW DELHI: Reassuring that there is enough liquidity in banks, Finance Minister Nirmala Sitharaman said public sector banks (PSBs) have distributed loans worth Rs 81,781 crore during nine-day loan mela organised by banks and efforts are being made to ensure that large corporates release their dues to micro, small and medium enterprises (MSME) ahead of Diwali.
“There was demand for the credit. Credit across all sectors was given by banks be it agriculture loans or for vehicles,” Sitharaman said, after meeting heads of PSBs.
"The minister on Monday reviewed the credit growth progress in PSBs where they discussed the liquidity situation, preparedness of banks for merger and discussing issues of IBC and Credit Guarantee Scheme. “At least Rs 81,781 crore was disbursed in the outreach programme. Of these, new loans accounted for Rs 34,342 crore,” Finance Secretary Rajeev Kumar said.
According to the assessment of the Reserve Bank of India’s Monetary Policy Committee (MPC), there is a virtual crash in the commercial credit, which has slumped from Rs 7.76 lakh crore to Rs 90,995 crore.
Interestingly ‘non-food credit’ by banks which was Rs 1.65 lakh crore last fiscal, this year it has contracted to Rs 93,700 crore.
The government during annual review of PSBs last month, had announced that it will be conducting loan melas to ensure there is enough liquidity in the system.
PSBs will be conducting another outreach programme for four days starting October 21.
This programme is expected to address the liquidity concerns that have impacted consumption in recent times, amid the economic slowdown that has gripped India.
According to returns filed by large corporates to the Ministry of Corporate Affairs, Rs 40,000 crore is due to MSMEs, she said adding that all efforts would be made to ensure that MSMEs get their dues ahead of Diwali.