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MSME needs, Atma Nirbhar discussed in meeting with PSBs

Finance minister met PSB heads via video conferencing on friday

Published: 23rd May 2020 09:21 AM  |   Last Updated: 23rd May 2020 09:21 AM   |  A+A-

Union Finance Minister Nirmala Sitharaman addresses a press conference to announce the fifth and final tranche of economic stimulus package at the National Media Centre in New Delhi on Sunday.

Union Finance Minister Nirmala Sitharaman addresses a press conference to announce the fifth and final tranche of economic stimulus package at the National Media Centre in New Delhi on Sunday. (Photo | Anil Shakya, EPS)

By Express News Service

NEW DELHI: Easy availability of liquidity, restructuring of loans, and stress in the financial sector were some of the top points discussed as Union Finance Minister Nirmala Sitharaman met heads of public sector banks on Friday, amidst the backdrop of the coronavirus pandemic.

“A review meeting through video conferencing was held with all PSBs. Everybody aligned on the need for quickly addressing the needs of MSMEs and other customers,” the Department of Financial Services said.
Some officials who attended the meeting said that MSME loans and implementation of Aatma Nirbhar Bharat economic package was at the centre of the talks.

“The emphasis was on successful implementation of the schemes announced last week. There was general agreement that MSMEs need hand-holding at this moment. The FM emphasised that the role of banks will be very important in the success of the schemes announced,” said a finance ministry official.

Bankers, on the other hand, highlighted the increasing pressure on their manpower, stress on the sector and also lack of clarity on the restructuring of loans and non-performing asset (NPA) norms.

“While the RBI has increased the moratorium period, bankers sought more clarification regarding the NPA norms and loan restructuring. They also pointed out the stress on manpower due to the extended pressure on banks. The finance minister acknowledged the stress,” the official added.

The meeting was proposed for last week, but was postponed due to announce the Rs 20 lakh crore Aatma Nirbhar Bharat package.

The meeting was held after RBI Governor Shaktikanta Das concluded the MPC meet, and announced repo and reverse repo rate cuts by 40 bps each. Das also forecasted FY21 GDP growth to be in the negative territory and extended moratorium by three months.

“While borrowers heave a sigh of relief, banks and financial institutions will continue to worry. Their access to committed cash flow continues to remain in suspension and in the already stretched system, they will find it a challenge to meet the growing needs of financing, the demand for which will continue to be on an increase,” said Veena Sivaramakrishnan, partner, Shardul Amarchand Mangaldas & Co.

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