In a meeting with public banks Union Finance Minister Nirmala Sitharaman will review bad loans of Rs 100 crore or more. The assessment of asset quality and recovery is a part of the performance review of state-run lenders, a senior finance ministry official said while confirming the development.
This is the first review meeting after the presentation of Budget 2022-23.
Apart from the performance review, the Centre will also take stock of credit growth, capital raising plans of banks and their business performance. Moreover, lenders will also share details on progress in financial inclusion and related government schemes.
“Progress in schemes announced under Aatmanirbhar Bharat and details on the saturation drive in Kisan Credit Card or KCC will also be shared,” Economic Times quoted another executive in the know if it as saying.
It is worth mentioning here that all of the country’s 12 public sector banks (PSBs) reported profit in FY22 and its almost double of recorded net profit of Rs 31,820 crore last fiscal. However, the Centre has not allocated any capital towards bank capitalisation in the current fiscal.
Moreover, during the meet with FM, banks will be urged to sanction loans for productive sectors to accelerate the economic revival facing headwinds including from Russia-Ukraine war. Last week during the Iconic Week celebration of the finance ministry, banks conducted outreach programme across the country where eligible borrowers were sanctioned loans on the spot.
Meanwhile, in PSB Manthan 2022, held in April, banks were instructed to prepare a three-year roadmap to improve their performance and competitiveness.
FM Sitharaman, earlier this month, also reviewed the progress in setting up the National Asset Reconstruction Company Ltd (NARCL), the special purpose asset reconstruction company for taking over the large value NPA accounts (above Rs 500 crore) from the banks.
