Public sector banks (PSBs) have disbursed loans of ₹2.39 trillion in November to non-bank lenders, large and small businesses, as well as farmers, and ₹2.52 trillion in October, the finance ministry said on Tuesday.
In a bid to improve consumer demand amid an economic downturn, outreach camps, or loan melas, were held in two phases across 374 districts in October alone.
In September, finance minister Nirmala Sitharaman prodded state-owned lenders to reach out to customers and signal their willingness to lend during the festive season.
“The strong outreach effort of PSBs has continued in November as well, with disbursement of ₹2.39 lakh crore (trillion) to MSMEs (micro, small and medium enterprises), NBFCs (non-banking financial companies), corporates, retail and agriculture sector borrowers. This has raised the total disbursement by PSBs to these sectors since the launch of the customer outreach in October to ₹4.91 lakh crore," the finance ministry said in a statement.
Since October, banks have disbursed loans of ₹72,985 crore to MSMEs, including ₹35,775 crore in November.
Indian businesses, especially MSMEs, have been battling a demand slowdown and a liquidity crunch. Increased credit disbursal by banks will help small businesses scale up operations, which is expected to boost jobs growth. PSBs have disbursed ₹25,525 crore to NBFCs in November, and ₹19,628 crore in October. The non-bank lenders have been under a liquidity pressure after payment defaults by group companies of Infrastructure Leasing and Financial Services Ltd (IL&FS) last year.
“Total support sanctioned by PSBs in the form of credit to (including co-origination and on-lending) and pool buyouts from NBFCs since the IL&FS default in September 2018 till November 2019 has risen to ₹4.23 lakh crore, including pool-buyouts of ₹1.24 lakh crore," the ministry said.
Data shared by the ministry showed that corporate houses borrowed the most during October-November, followed by MSMEs and farm loans. “PSBs being adequately capitalized and record recovery underway, have sufficient liquidity to support credit growth," it said.