As per news reports, finance minister, Nirmala Sitharaman has stated that state-owned banks will not declare stressed assets of MSMEs as non-performing assets (NPAs) till March 31, 2020 in wake of listing more measures to lift up the economy by ensuring credit.
The finance minister also stated that state-owned lenders will hold meetings with non-banking financial companies and new retail customers in 200 districts until September 29 to explore ways of giving credit.
Finance minister, Sitharaman was speaking after holding a review meeting with public sector banks (PSBs) where they discussed various issues, including follow up on transmission of monetary policy rates.
As per news reports, the Reserve Bank of India (RBI) had made it mandatory earlier this month for banks to link all their fresh retail loans to an external benchmark, effective from October 1 and the central bank’s repo rate being one such benchmark.
Following this move, banks such as Punjab National Bank and Allahabad Bank also announced linking their retail loans with the RBI’s repo rate.
The minister also said that the RBI had also issued a circular that provides for stressed loan accounts of micro, small and medium enterprises (MSMEs) not being declared non-performing assets (NPAs). The minister added that the banks have been asked to follow that circular.