economy

FM reviews readiness of PSBs to deal with covid

FM reviews readiness of PSBs to deal with covid

New Delhi: Finance minister Nirmala Sitaraman on Friday reviewed the preparedness of public sector banks (PSBs) to tackle any potential impact of the fresh wave of covid-19 that has led several states to reimpose curbs on public gatherings and operations of businesses and offices. Sitharaman assessed steps taken by the banks to implement covid-related steps initiated by the Union government and Reserve Bank of India (RBI), according to a finance ministry statement. The finance minister also separately discussed with RBI governor Shaktikanta Das and other officials on post-pandemic economic recovery and the readiness of PSBs to tackle any challenge posed by the current surge in covid infections. According to the finance ministry, the PSBs informed the minister that they are adequately capitalized and prepared for any stress scenario in the future. Sitharaman met the Chairmen and Managing Directors of PSBs through a virtual meeting. The review meeting was also attended by junior finance minister Bhagwat Kisanrao Karad and Secretary, Department of Financial Services (DFS), Debasish Panda, along with senior officials of the DFS. Sitharaman noted that the business outlook is improving progressively despite global headwinds and the spread of the Omicron variant of coronavirus. She underlined that contact-intensive sectors may require more support to help them fight the pandemic. She said that credit demand is expected to pick up due to growth in retails segments, improvement in overall macroeconomic prospects and improving financial health of borrowers. During the review meeting, bankers pointed out that PSBs have observed an improvement in the repayment culture in the country. PSBs have performed well and, supported by various policy measures, provided the required impetus to the economy for coming out of shackles of pandemic induced stress. During the meeting, it was noted that PSBs recorded a net profit of ₹31,820 crore in FY 2020-21, highest in last five financial years. In the first half of the current fiscal (FY22), the net profit of the government-owned banks stood at ₹31,145 crore. Further, in the last seven financial years, according to the government, PSBs have made a recovery of over ₹5.49 lakh crore. Their capital to risk weighted assets ratio (CRAR) as on September 2021 was 14.4%, against the regulatory requirement is 11.5%. In terms of credit disbursement, the review meeting highlighted that PSBs recorded a year-on-year credit growth of 11.3% in personal loans, 8.3% in agriculture loans and overall credit growth of 3.5%, as on September last year. Under the credit outreach programme launched in October 2021, PSBs have sanctioned an aggregate loan amount of ₹61,268 crore. During the meeting, the Minister of State for Finance, Bhagwat Karad said that the state-run banks are the power engines of the Indian economy and added that moving with the times, banking has become more open and customer centric. PSB chiefs also shared their views on the banking business and suggested several steps to the Finance Minister for the overall growth of the business. Download.

economy 2022-01-08 Livemint