FM urges PSBs to enhance credit flow to employment generating sectors
FM MEETS CEOs OF NORTH BASED PUBLIC SECTOR BANKS
FM MEETS CEOs OF NORTH BASED PUBLIC SECTOR BANKS
The Government has taken several steps to ease the liquidity situation and support the banks through the period of Global Financial Crisis. Stating this at the first zonal meeting with the CEOs of north based public sector banks here today, the Finance Minister Shri Pranab Mukherjee appreciated the Public Sector Banks for doing a commendable job over the last year in meeting the credit needs of the economy while the world credit markets struggled with the economic slowdown. The Public Sector Banks have been the leaders in taking forward the Government's goal of targeted lending to achieve inclusive growth, he added. Shri Mukherjee emphasized that taking advantage of the upcoming busy season, banks should gear up to enhance credit flow to the employment generating sectors especially agriculture and the Micro & Small Enterprises.
Commending the role of the Public Sector Banks in reaching agriculture credit to the farmers in a timely manner, Shri Pranab Mukherjee said that in order to meet their current year priority sector lending target for agriculture credit, the banks need to enhance the credit flow to agriculture for the subsequent quarters of the financial year. Pointing out the scheme, announced by the government, of a 1 per cent additional subvention on interest to farmers who pay their dues in time, Shri Mukherjee urged the Banks to make use of it to improve repayments.
Noting that the Public Sector Banks in India play a vital role in providing housing loans up to Rs.20 lacs under Priority Sector Lending, the Finance Minister pointed out that the Government is providing interest subvention of 1% on all individual housing loans up to Rs.10 lacs for units costing up to Rs. 20 lacs and advised the Banks to pay due attention to such house loan borrowers. He emphasized the need to target these loans to the rural areas so as to meet the housing needs of the rural population.
Shri Mukherjee expressed confidence that the allocated target of reaching 15% of the Priority Sector Lending to minority communities will be attained by 31st March. The growth rate of advances to micro and small enterprises has been approx. 13%, for the last six months and this needs to be improved in view of the target of 20% on year on year growth in flow of credit that is required to be achieved annually for this sector, added the Minister. Appreciating the performance of Public Sector Banks in the area of education loans the Finance Minister advised the banks to give special attention to rural areas and girl students while extending education loans.
Highlighting Public Sector Banks’ role in achieving the target of inclusive growth he urged them to rapidly scale-up their efforts to reach banking to the inaccessible regions of the country through alternative methods and technological means. Finance Minister expressed hope that the North based Public Sector Banks are making concerted efforts to open more ‘no-frill accounts’, provide Kisan Credit Cards to all farmers, link all existing Self Help Groups to bank credit, adopt the Banking Correspondents/Banking Facilitators model, while making the NREGA accounts in the rural branches operational for credit off-take also. The debt swap scheme of the Public Sector Banks will help to end the villagers’ reliance on informal and exploitative sources of credit, he added.
Shri Mukherjee said that the Government, with the help of State Governments, is trying to remove infrastructure bottlenecks of connectivity and coordination to facilitate the achievement of the goal of Financial Inclusion. Highlighting the importance of State Level Bankers Committee Forum, which can provide a holistic and a co-ordinated view of the development and banking needs at the State level, he advised the banks to use this mechanism to get the support of the State Government and other affiliated agencies so as to improve the reach of banks, improve the CD ratio, the lending to minority and weaker sections, infrastructure lending and other channels of priority sector lending.
The meeting was attended among others by Shri Namo Narain Meena, Minister of State for Finance, Shri Ashok Chawla, Finance Secretary, Shri G.C. Chaturvedi, Additional Secretary (Financial Services), CEOs of the North Based Public Sector Banks, Chairmen of Financial Institutions and officers from the Ministry of Finance
Commending the role of the Public Sector Banks in reaching agriculture credit to the farmers in a timely manner, Shri Pranab Mukherjee said that in order to meet their current year priority sector lending target for agriculture credit, the banks need to enhance the credit flow to agriculture for the subsequent quarters of the financial year. Pointing out the scheme, announced by the government, of a 1 per cent additional subvention on interest to farmers who pay their dues in time, Shri Mukherjee urged the Banks to make use of it to improve repayments.
Noting that the Public Sector Banks in India play a vital role in providing housing loans up to Rs.20 lacs under Priority Sector Lending, the Finance Minister pointed out that the Government is providing interest subvention of 1% on all individual housing loans up to Rs.10 lacs for units costing up to Rs. 20 lacs and advised the Banks to pay due attention to such house loan borrowers. He emphasized the need to target these loans to the rural areas so as to meet the housing needs of the rural population.
Shri Mukherjee expressed confidence that the allocated target of reaching 15% of the Priority Sector Lending to minority communities will be attained by 31st March. The growth rate of advances to micro and small enterprises has been approx. 13%, for the last six months and this needs to be improved in view of the target of 20% on year on year growth in flow of credit that is required to be achieved annually for this sector, added the Minister. Appreciating the performance of Public Sector Banks in the area of education loans the Finance Minister advised the banks to give special attention to rural areas and girl students while extending education loans.
Highlighting Public Sector Banks’ role in achieving the target of inclusive growth he urged them to rapidly scale-up their efforts to reach banking to the inaccessible regions of the country through alternative methods and technological means. Finance Minister expressed hope that the North based Public Sector Banks are making concerted efforts to open more ‘no-frill accounts’, provide Kisan Credit Cards to all farmers, link all existing Self Help Groups to bank credit, adopt the Banking Correspondents/Banking Facilitators model, while making the NREGA accounts in the rural branches operational for credit off-take also. The debt swap scheme of the Public Sector Banks will help to end the villagers’ reliance on informal and exploitative sources of credit, he added.
Shri Mukherjee said that the Government, with the help of State Governments, is trying to remove infrastructure bottlenecks of connectivity and coordination to facilitate the achievement of the goal of Financial Inclusion. Highlighting the importance of State Level Bankers Committee Forum, which can provide a holistic and a co-ordinated view of the development and banking needs at the State level, he advised the banks to use this mechanism to get the support of the State Government and other affiliated agencies so as to improve the reach of banks, improve the CD ratio, the lending to minority and weaker sections, infrastructure lending and other channels of priority sector lending.
The meeting was attended among others by Shri Namo Narain Meena, Minister of State for Finance, Shri Ashok Chawla, Finance Secretary, Shri G.C. Chaturvedi, Additional Secretary (Financial Services), CEOs of the North Based Public Sector Banks, Chairmen of Financial Institutions and officers from the Ministry of Finance
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