Finance Minister reviews Customer Outreach Initiatives and support to NBFCs

Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman reviewed the performance of Public Sector Banks (PSBs) here today in a meeting with bank chief executives. Credit and implementation of measures announced to support economic growth were reviewed in-depth.

In the review, it was noted that during the first phase of the Customer Outreach Initiative, from 1st to 9th October 2019, PSBs disbursed ₹ 81,781 crore, including new term loans of ₹ 34,342 crore. Banks shared their plans for the second phase of the Customer Outreach Initiative, with camps in about 150 districts between 21st to 25th October 2019, building on the momentum already built.

As in the first phase, NBFCs would also participate. Further, receivable bill discounting for MSMEs would also be a focus area.  Details of specific dues outstanding of the companies, including MSME, with the corporates and aggregating approximately ₹ 40,000 crores will be shared by the Ministry of Corporate Affairs with banks for reaching out to MSMEs during the Customer Outreach Initiative for bill discounting and enabling MSMEs to access working capital.

In addition, home loans, vehicle loans, agriculture loans, education loans, and other MSME and personal loans would be focused upon. It was reiterated that the outreach would be without any dilution in diligence or underwriting standards. It was also noted that with the recent recapitalisation of over ₹ 55,000 crore, PSBs are well equipped to support credit needs.

It was noted in the review that PSBs have continued to support the NBFC/HFC sector. Since the IL&FS default in September 2018 till 10th October 2019, PSBs have sanctioned total support of ₹ 3,97,557 crore in the form of credit as well as pool-buyouts of ₹ 1,07,792 crore, including ₹ 15,455 crore under the newly launched Partial Credit Guarantee Scheme. Disbursement by PSBs to NBFCs has been ₹ 39,068 crore since the last review on 19th September 2019 till 10th October 2019.

The PSB’s chief executives informed that they will continue expeditious disbursement of pool buy-outs including those sanctioned under the Partial Credit Guarantee Scheme. Government would also issue suitable clarifications to banks with a view to expedite processing of proposals under the scheme.