Finance Minister Nirmala Sitharaman is due to meet the heads of public sector banks (PSBs) on April 23 to take stock of the performance of the lenders and the progress made by them on various plans launched by the government for reviving the economy. battered by the pandemic.
This is the first full review meeting after the presentation of the 2022-2023 budget. Banks would be asked to sanction lending to productive sectors to speed up economic recovery, sources said.
According to sources, there would be a comprehensive review of the various segments and the progress of government programs, including the Emergency Credit Line Guarantee (ECLGS) scheme.
In the budget, the ECLGS has been extended for one year till March 2023. Also, the warranty coverage of the scheme has been extended from Rs 50,000 crore to Rs 5 lakh crore. The coverage, scope and breadth of benefits of ECLGS 3.0 for the hospitality, travel, tourism and civil aviation sectors have been expanded.
Additionally, the credit limit for eligible borrowers has been increased to 50% of their outstanding funds-based credit, from 40% previously. The enhanced limit is subject to a maximum of Rs 200 crore per borrower.
Since its launch in May 2020, loans worth Rs 3.19 lakh crore have been sanctioned till March 25, 2022. About 95% of the guarantees issued are for sanctioned loans to micro, small and medium enterprises.
The meeting to be held in New Delhi will set the agenda for the current exercise which has just begun. In the last financial year, no PSB suffered any loss during the April-December period and recorded a collective net profit of Rs 48,874 crore during the period.
PSBs made a combined net profit of Rs 31,820 crore in 2020-21. However, there have been collective losses for five consecutive years from 2015-16 to 2019-20.
The highest amount of net loss was recorded in 2017-18 at Rs 85,370 crore, followed by Rs 66,636 crore in 2018-19; Rs 25,941 crore in 2019-20; Rs 17,993 crore in 2015-16 and Rs 11,389 crore in 2016-17.
From 2009-2010 to 2014-2015, PSOs were making a profit on their books.
To improve the financial health of PSBs, the government has implemented a comprehensive 4Rs strategy – transparent recognition of NPAs, resolution and value recovery of troubled accounts, recapitalization of PSBs, and reforms of PSBs and the financial ecosystem at the national level. broad sense – for a responsible and clean environment. system.
Comprehensive measures have been taken as part of the 4Rs strategy to reduce PSB NPAs.
As part of the strategy, the government infused Rs 3,10,997 crore to recapitalize banks over the last five fiscal years – from 2016-17 to 2020-21, of which Rs 34,997 crore came from budget allocation and Rs 2, 76,000 crores through the issuance of recapitalization bonds to these banks.
(With PTI entries)
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Posted: Sunday April 10th 2022, 2:13 PM IST