New Delhi, Jan 29: Public sector banks (PSBs) on Monday promised Union Finance Minister Piyush Goyal to step up the level of domestic credit growth from 9.1 per cent year-on-year at the end of the second quarter of the current financial year.
The banks also showed commitment to further improve on the MSME robust growth in credit and reducing trend in turnaround time for loan applications through growing use of fintech and technology as evidenced by the success of the 59 minutes loan portal, through which over 1.25 lakh MSMEs have been accorded in-principle approval.
They agreed to work further on increasing use of advanced data analysis and where possible, artificial intelligence algorithms for better, faster and hassle-free credit decisions and monitoring of accounts.
The PSBs assured the Finance Minister about these commitments during a meeting with bank CEOs which he called to review the performance of banks.
Further, enabled by the recently approved MSME Restructuring Scheme and the 12-point agenda for supporting MSMEs announced by Prime Minister Narendra Modi at the launch of the MSME Outreach and Support Programme, PSBs committed to increase MSME lending.
Banks also committed to step up their efforts for financing under Pradhan Mantri Awas Yojana which is aimed at securing Housing for All by 2022.The Minister advised PCA banks to maintain the trend of improvement in performance, with a view to bringing them out of the PCA framework at the earliest. In this connection, the significant reduction in NNPAs and significant de-risking of their credit portfolios during the current financial year were taken note of.
In financial inclusion and customer EASE, the recent expansion of banking outlets as per the 5-km from village distance norm was taken note of and banks were asked to expeditiously complete the opening of branches and banking outlets in LWE-affected areas.
During the review, it was also underlined that to consolidate the gains made through financial inclusion initiatives by banks implemented so far and deepen it further. In this regard, banks were asked to ensure that the benefits extended under Pradhan Mantri Jan Dhan Yojana by making overdraft facility and accidental insurance cover on RuPay cards more attractive reach the common people, and to ensure opening of accounts as per expanded focus from “every household to every adult”, with added emphasis on usage of accounts by enhancing DBT flows through these accounts, adoption of social security schemes, promoting digital payments through the use of RuPay cards.
Banks were also asked to leverage the pipeline of Jan Dhan-Aadhaar-Mobile (JAM) to provide better access to financial inclusion products and services to accelerate the realisation of a digitalised, financially included and insured society.Earlier, RBI Governor Shaktikanta Das also interacted at length with bank CEOs, noting the importance of PSBs for the economy at all times and especially at the present juncture in helping meet broader economic goals. He also flagged the need for PSBs to extend credit while observing prudential norms but without excessive conservatism.
He also asked banks to take advantage of the MSME restructuring scheme to support viable MSME units. The Governor flagged the need for further strengthening various aspects of banking, including underwriting standards, capacity building, use of technology and governance. Department of Financial Services Secretary Rajiv Kumar was also present during the meeting.
The review meet was called against the backdrop of visible signs of strengthening of the financial of PSBs as a result of government’s comprehensive 4R’s approach of recognition, resolution, recapitalisation and reforms, which has positioned banks to step up their support to meet the lending needs of a growing economy.
Amidst a number of positives, the Finance Minister highlighted the need for each and every PSB to ensure that recent gains are sustained and better service delivered to all stakeholders.UNI