New Delhi, Sep 26 (IANS) Finance Minister Nirmala Sitharaman will meet private sector banks, NBFCs and Housing finance companies on Thursday, official sources said.
HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank are expected to attend and some select HFCs and NBFCs are also likely to be there.
Liquidity, rate cut, credit disbursal are likely to be part of the discussion between the Minister and the lenders and financiers, sources said.
Earlier in September, Sitharaman said government wants to ensure maximum credit disbursal during the festive season and to expedite that the flow of banks' liquidity to the NBFCs and the customers, she had announced that all scheduled banks (both public and private banks) will hold large gatherings in a total of 400 districts, where customers can come and take any type of loan they want from the banks and the NBFCs partnering with them.
Holding a review meeting with Public Sector banks, she had said banks had already entered into 14 tie-ups with NBFCs for co-originating loans with another 36 such tie-ups in the pipeline.
"The perception is that the banks have the liquidity and this is not going to the NBFCs and from there to the end customers," she had said following a meeting with the heads of the public sector banks. In this meeting private sector banks or NBFCs were not part of. She ha d said would meet the private banks separately.
The Corporate Affairs Ministry which Sitharaman is heading is also looking at opening a special window for NBFCs under the Insolvency and Bankruptcy Co de of which they are not current part of to facilitate some limited actions l ike their insolvency and liquidation proceedings under the IBC. Many NBFCs like IL&FS, DHFL, Altico have defaulted on interest payment availed from bank s leading to the credit crunch with banks stopping the credit flow to them fearing large scale defaults on existing loans.
Sitharaman had also reviewed the liquidity situation of PSU lenders and steps taken by them to pass on the 110 bps rate cut by RBI to retail loans. From October 1, the lenders will have to link their retail loans to external ben chmark like repo rate or T-bills which may lead to some automatic fall in interest rates on floating loans.
In this context 400 districts will be chosen where there will be gatherings organised by banks of the NBFCs they have partnered with to encourage customers to avail of not just retail, agriculture, and MSME loans, but also loans for vehicles and housing, and Mudra loans. In public, the banks will show that they are pushing liquidity into the system, the FM had said.
"The borrowers can belong to the famous RAM (Retail, Agriculture and MSMEs) categories. We want borrowers who want loans for vehicles and houses also to attend these open public meetings," the Finance Minister had said.
"The idea is to take stock of everything and spur the credit growth, especially in the automobile sector, in the agriculture sector, in the MSMEs and also look at the 'co-origination' with the NBFCs and HFCs, where the banks ha ve the credit availability... so that they can join hands together and lending reach to the last mile," Finance secretary Rajeev Kumar had said.
(This story was auto-published from a syndicated feed. No part of the story has been edited by The Quint.)
(The Quint is available on Telegram. For handpicked stories every day, subscribe to us on Telegram)
We'll get through this! Meanwhile, here's all you need to know about the Coronavirus outbreak to keep yourself safe, informed, and updated.
Liked this story? We'll send you more. Subscribe to The Quint's newsletter and get selected stories delivered to your inbox every day. Click to get started.
The Quint is available on Telegram & WhatsApp too, click to join.