Nirmala Sitharaman : As the outbreak needs to be stabilized, Government is putting all the funds with the help of banks and NBFC. But now when the question to open up the economy arises; it is going to be tedious to recover from the slowdown country has faced.
Finance Minister, Nirmala Sitharaman conducted a meeting through video conference with top executives of Public Sector Banks on Monday, to discuss the credit flow and details of financial issues for key sectors like MSME sector and NBFC’s, the rate of borrowing and to measure the progress under long term repo operations. The usage of excessive funds by bank under reverse repo route and repayment moratorium will be briefly discussed.
It is aimed to evaluate the preparation of lenders for the long term and to support the credit appetite of the economy once the relaxations are imposed. The meeting is held at a time when the government is planning to declare its next relief package which is expected to focus on MSME sector and supply chain including liquidity and credit involved.
For the liquidity and credit flow to be at ease, banks like Punjab National Bank and SBI have increased their working capital limit for eligible customers to help them overcome temporary cash crunch. PSB’s started their year with bearing huge losses due to the global pandemic which eroded their position in the market. Especially, in coming quarters when the impact of pandemic is going to diminish, the economy would need a credit push to get back on its feet, and the government indeed is preparing for the push.
PSB’s will have to do heavy lifting as the lenders ability to lend would be impaired by the crisis and the number of borrowers will pound up at that time. Thus, Government has a lot to plan and revise the expenditure budgets, maintain the deficit, control the inflation, generate job opportunities after the reopening of economy