The finance ministry has asked banks to speed up NPA resolution; Focus on credit growth


New Delhi: The Ministry of Finance A meeting was held on Monday with the heads of public sector banks (PSBs) to review their annual performance and the progress they have made on various government schemes.
The meeting was to be chaired by the Finance Minister Nirmala SitharamanBut she was unable to attend due to some other pressured engagement.
However, the annual performance review of PSBs was chaired by Minister of State for Finance Bhagwat Ke Karad. In addition to the minister, Financial services Secretary Sanjay Malhotra and other senior officials of the Department of Financial Services (DFS) were present at the meeting.
According to sources, the banks were asked to approve loans for productive sectors to accelerate the recovery of the economy, which is facing difficulties, including the Russia-Ukraine war.
During the Finance Ministry’s Iconic Week celebrations earlier this month, banks conducted outreach programs across the country where eligible borrowers approved on-site loans.
Banks have been asked to expedite the non-performing assets (NPA) resolution and focus on recovering bad loans, the sources said.
The meeting took stock of banks’ credit growth, asset quality and business growth plans, sources said. 100 crore non-performing assets (NPAs) and recovery status were also discussed.
The progress of various departments and government schemes including Kisan Credit Card and Emergency Credit Line Guarantee Scheme (ECLGS) was extensively reviewed.
In the budget, ECLGS was extended by one year until March 2023. In addition, the guarantee cover for the scheme is Rs. 50,000 crore to Rs. 5 lakh crore was made.
The coverage, scope and scope of benefits under ECLGS 3.0 for the Hospitality, Travel, Tourism and Civil Aviation sectors were expanded.
Also, the credit limit for eligible borrowers was earlier increased from 40 per cent to 50 per cent of their fund-based credit. Advanced limit A maximum of Rs. 200 crore.
In addition, the review of banks’ capital requirements and financial inclusion campaigns were part of the agenda, sources said.
The meeting took place when all PSBs reported profit for the second consecutive financial year. In FY22, their net profit more than doubled to Rs. 66,539 crore. The combined profit of 12 state-owned banks in FY21 was Rs 31,820 crore.
However, there was mass loss for five consecutive years from 2015-16 to 2019-20.
The highest amount of net loss in 2017-18 was Rs. 85,370 crore, followed by Rs. 66,636 crore was registered; In 2019-20, Rs. 25,941 crore; In 2015-16, Rs. 17,993 crore and Rs. 11,389 crore.
To improve the financial health of PSBs, the government has implemented a comprehensive 4Rs strategy – transparent recognition of NPAs, resolution and recovery of value from stressed accounts, recapitalization of PSBs and reform of PSBs and wider financial ecosystem – accountable and clean system.
Extensive measures were taken under the 4Rs strategy to reduce the NPA of PSBs. As part of the strategy, the government will provide Rs. 3,10,997 crore, of which Rs. 34,997 crore through budgetary allocation and Rs. 2,76,000 crore by issuing recapitalization bonds to these banks.

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