The idea to establish ABBFF was to remove the fear of witch-hunting and actions based on hindsight, among officials of public sector banks.
Nirmala Sitharaman is scheduled to meet heads of public sector banks on June 20 and is expected to take a stock of credit growth, asset quality and plan revival of the economy, sources said.
In the Union Budget for 2021-22, the government announced its intent to take up the privatisation of two PSBs in the year and approved a policy of strategic disinvestment of public sector enterprises.
The enhanced capital would help banks expand their business and push credit growth in the productive sectors.
Large surplus systemic liquidity, forward guidance of continuing with the accommodative stance and the external benchmark system for pricing of loans in select sectors aided monetary transmission.
Finance Minister Nirmala Sitharaman reviewed various steps taken by PSBs in implementing pandemic-related measures initiated by the government and RBI.
Briefing reporters, the convener Srinivas alleged that successive governments have attempted to weaken nationalised banks, despite the said financial institution having contributed immensely.
Finance Minister Nirmala Sitharaman had announced that two PSBs would be privatised in FY21-22, apart from the IDBI Bank.
According to the statistics given by the UFBU, the 13 corporates' outstanding dues were at Rs 4,86,800 crore and it was resolved at Rs 1,61,820 crore resulting in a loss of Rs 2,84,980 crore.
The government has already privatised IDBI Bank by selling its majority stake in the lender to LIC in 2019 and merged 14 public sector banks in the past four years.
The sources said that a list of eligible persons to be appointed as independent directors has gone to the Prime Minister's Office and it will take a final call soon.
The fresh NPA generation rate (or slippages) remained elevated during the second wave in absence of regulatory relief such as moratorium, the report said.
Still, that fares better than FY20, when state-run banks some of which were placed under the RBI’s prompt corrective action, downsized staff by about 38,000.
Such loan offers were generated using the customer transactions data within the banks.
Sitharaman's meeting with MD and CEOs of PSBs assumes significance given the importance of the banking sector in generating demand and boosting consumption in the backdrop of the Covid second wave.