New Delhi: Coming to aid the slackening economy, public sector banks will increase their lending to about Rs22.5 trillion in the current fiscal, up around 4% over the target fixed for them.
With the upward revision of their credit target by Rs56,000 crore, banks are expected to lend about Rs22.5 trillion by the end of current fiscal, the finance ministry officials said.
As per the ‘Statement of Intent´submitted by all the public sector banks, credit growth was expected to be 20% during 2008-09 over the last year, they said.
With the revision in the credit target by the government, credit disbursal would be 24% higher than the last year, they added.
Last week, finance secretary Arun Ramanathan had said, “We have three months more...we have enhanced the original (bank’s credit disbursal) plans by Rs56,000 crore. So, we are planning to provide, in addition to the earlier plans, over Rs56,000 crore.”
The target enhancement will benefit all sectors, including real estate, corporate, small and medium enterprises and non-banking financial companies, the officials said.
The decision of the government follows the announcement of the RBI to further reduce the key policy ratios and rates to unlock more bank funds and signal soft interest rate regime to neutralise the impact of the global financial turmoil on the economy.
Till 19 December 2008, the outstanding credit of commercial banks, including private sector banks, stood at Rs25,92,418 crore to non-food sector.