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FM Sitharaman to meet heads of PSBs next week and nudge them for credit expansion to boost the economy

Finance Minister Nirmala Sitharaman is scheduled to meet heads of public sector banks (PSBs) next week to review performance of the lenders and progress made by them to support the economy battered by COVID-19 pandemic.

Banks would be urged to sanction loans for the productive sectors to accelerate revival of the economy, sources said.

According to sources, the two-day meeting would commence on November 17 and undertake a comprehensive review of various segments, progress in the government schemes including Aatmanirbhar Bharat Abhiyan.

Apart from the bankers, top officials from various ministries would participate to highlight major issues with the banks and suggest ways to smoothen the process.

Top officials from infrastructure ministries, agriculture and allied departments would be part of the meeting hosted by the Finance Ministry.

Given the importance of the banking sector in generating demand and boosting consumption, sources said the meeting with the MDs and CEOs of PSBs is considered important.

The meeting comes at a time when banks are undertaking outreach programmes to push lending in the productive sectors of the economy.

Since the commencement of the government’s nationwide Credit Outreach Programme on October 16, banks have sanctioned 13.84 lakh loans totalling Rs 63,574 crore through 10,580 camps held across the country as of October 31.

As per the data shared by the Finance Ministry, as much as Rs 21,687.23 crore in business loans were sanctioned to about 3.2 lakh beneficiaries, while vehicle loans worth Rs 4,560,39 crore were sanctioned to 59,090 borrowers.

The meeting is expected to take stock of the banking sector, progress on restructuring 2.0 scheme announced by the Reserve Bank of India (RBI), sources said, adding, the revamped Rs 4.5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) would also be reviewed during the meeting.

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