Home / News / India /  FM Sitharaman to meet heads of PSBs on 20 June, check what's expected
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Finance Minister Nirmala Sitharaman is all set to meet the heads of public sector banks (PSBs) on 20 June to review the performance of the lenders.

During the meeting, the banks may be requested to sanction loans for productive sectors to accelerate the revival of the economy facing headwinds including from the Russia-Ukraine war.

It is most likely that FM Sitharaman may take a stock of credit growth, asset quality, and business growth plan of banks. Also, she may discuss the non-performing assets (NPAs) of 100 crore and the recovery status.

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Comprehensive review of various segments and progress in government schemes including the Kisan Credit Card, and Emergency Credit Line Guarantee Scheme (ECLGS) might be discussed during the meeting.

In the Budget 2022-23, the government extended the ECLGS by a year till March 2023. Also, the guarantee cover for the scheme was expanded by 50,000 crore to 5 lakh crore.

Apart from this, the credit limit for eligible borrowers was increased to 50 per cent of their fund-based credit outstanding from 40 per cent earlier. However, the enhanced limit is subject to a maximum of 200 crore per borrower.

This meeting is being held against the backdrop when all PSBs posted a profit in the second financial year in a row. The PSBs have more than doubled their net profit to 66,539 crore in FY'22. Data says, collective profit of 12 state-owned banks together was 31,820 crore in FY21.

For five straight years during 2015-16 to 2019-20, there were collective losses. The highest amount of net loss was registered in 2017-18 at 85,370 crore, followed by 66,636 crore in 2018-19; 25,941 crore in 2019-20; 17,993 crore in 2015-16 and 11,389 crore in 2016-17.

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Citing the continuous collective losses, the government implemented a comprehensive 4Rs strategy -- recognition of NPAs transparently, resolution and recovery of value from stressed accounts, recapitalization of PSBs, and reforms in PSBs and the wider financial ecosystem -- for a responsible and clean system.

The government also infused 3,10,997 crore to recapitalize banks during the last five financial years -- from 2016-17 to 2020-21, out of which 34,997 crore were sourced through budgetary allocation and 2,76,000 crore through issuance of recapitalization bonds to these banks.

With inputs from PTI.

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