Don't want banks to only recycle loans with existing customers: Sitharaman
For every one existing customer who wants a loan, banks will have to bring five fresh customers for loans, the FM told heads of PSU banks at a review meeting on ThursdayNo stressed MSME would be declared an NPA till March 2020, said Sitharaman
New Delhi: State-run banks have identified some NBFCs they can lend to immediately, said Finance Minister Nirmala Sitharaman.
Sitharaman held a meeting on Thursday with heads of state-run banks to review transmission of the central bank’s 110 basis points of interest rate cuts this year.
In a press conference after the meeting, she said, "In 200 districts, PSU banks will hold 'shamiana' meetings with NBFCs and retail borrowers between now and 29 September."
Another 200 districts will see similar gatherings from 10 October to 15 October.
She also said that PSU banks have been told that for every one existing customer who wants a loan, banks will have to bring five fresh customers for loans.
"Don't want banks to only recycle loans with existing customers. Banks will be encouraged to include new retail customers for lending," said Sitharaman.
Sitharaman said she reviewed liquidity moving from banks to NBFCs and from NBFCs to customers.
No stressed MSME will be declared an NPA up unil 31 March, 2020, said the Finance Minister.
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