FM press conference highlights: Low CV demand a cyclical problem, says FM

Finance Minister Nirmala Sitharaman today met private sector banks, NBFCs and Housing finance companies on Thursday, official sources said.

Issues like liquidity, rate cut, credit disbursal were to be on the agenda between the Finance Minister and the lenders and financiers, sources said.

Many NBFCs like IL&FS, DHFL, Altico have defaulted on interest payment availed from banks leading to the credit crunch with banks stopping the credit flow to them fearing large scale defaults on existing loans.

Here are the highlights:

• At this stage, RBI is handling it. Let there a comprehensive picture emerge, post that the govt will have to see what best can be done so that there is some assurance given to people who are affected: FM Sitharaman on PMC Bank crisis
• I get from this meeting today is that consumption is happening.Demand will get back&motivate our economy to move at a faster rate.The coming half year, things will have to look up & pep up every other sector,even if there are 1 or 2 sectors in which there may be some stress: FM
• Private investment will respond with reduction in corporate tax; banks will be willing to underwrite such investments: Uday Kotak.
• Most banks to follow external benchmark based lending from 1 October, says Uday Kotak after FM's meeting with private bankers.
• If there was a problem of liquidity, it was in the wholesale financing, and not in the retail: FM
• On the whole it was very tonic-like meeting, where I heard a lot of positive things. Not one voice said there was a concern, shortfall of demand. None of them voiced liquidity concerns: FM Nirmala Sitharaman
• Low commercial vehicle demand a cyclical problem: FM
• Slump in commercial vehicle sales is cyclical; sentiments driving lower passenger vehicle sales, FM quotes private bankers as telling her
• Affordable housing scheme has taken off well: FM
• Service sector showing high appetite for credit: FM
• There is immense possibility to reach out to them provided of course there are some simpler tweaking that we can do using their salaries and cash they earn also as a part can be used for their credit assessment, says FM
• Loans for affordable housing scheme taken off well; demand from bankers to raise limit to ₹50 lakh from current ₹45 lakh: FM
• Many of the MFIs and micro-finance units which have come here are in deep country, they said that in those areas there is still demand and they are extending loans. All of them clearly voiced a positive growth which is a good encouraging story.
• No shortage of liquidity says FM Sitharaman after meeting with the bankers
• Most MFIs sees demand in rural India
• Private sector banks will join outreach programme in 400 districts for potential lending: Finance Secretary after FM meeting with bankers
• Finance Secretary Rajeev Kumar after meeting private sector banks and financial institutions, earlier today: Festival season is coming. Therefore, we have all decided to join the outreach program and step up their efforts in various districts.