Finance Minister Nirmala Sitharaman to meet chiefs of these banks on Monday - Here is why

Union Finance Minister Nirmala Sitharaman is all set to hold a review meeting with CEOs of public sector banks (PSBs) on Monday to discuss various issues, including credit offtake, as part of efforts to prop up the economy hit by the COVID-19 crisis.  The meeting, to be held via video-conferencing, will also take stock of interest rate transmission to borrowers by banks and progress on moratorium on loan repayments, as per a report by news agency PTI. The deployment of excessive funds by banks under the reverse repo route may also come up for discussion on Monday, the report added.

The RBI had on March 27 slashed the benchmark interest rate by a massive 75 basis points and also announced a three-month moratorium to be given by banks to provide relief to borrowers whose income has been hit due to the lockdown.

Earlier this month, RBI Governor Shaktikanta Das held a meeting with heads of both public and private sector banks to take stock of the economic situation and review the implementation of various measures announced by the central bank. 

Besides, progress under the targeted long-term repo operations (TLTRO) for the NBFC sector and micro finance institutions (MFIs), and sanctions under the COVID-19 emergency credit line will also be reviewed.

Under the emergency credit line, borrowers can avail a maximum of 10 per cent of the existing fund based working capital limits, subject to a cap of Rs 200 crore. Public sector banks have sanctioned loans worth Rs 42,000 crore to the MSME sector and corporates since the start of the lockdown.

The finance minister had on Thursday said as many as 3.2 crore borrowers have taken advantage of the three-month moratorium scheme on repayment of loans announced by the Reserve Bank. "PSBs complemented RBI on loan moratorium. Their effective communication & proactive actions ensured that over 3.2 cr. A/c availed 3-month moratorium. Quick query redressals allayed customer concerns. Ensuring responsible banking amid #lockdown," she had tweeted.