Finance Minister Sitharaman to meet heads of PSBs on April 23 to motivate them for credit extension

This is the first full review meeting after the presentation of Budget 2022-23. Sources said banks would be urged to sanction loans to productive sectors to accelerate the revival of the economy.

According to sources, there will be a comprehensive review of various sections and progress of government schemes including Emergency Credit Line Guarantee Scheme (ECLGS).

In the budget, ECLGS was extended for one year till March 2023. Also, the guarantee cover for the scheme was extended by? 50,000 crore 5 lakh crore. The scope, scope and extent of benefits relating to hospitality, travel, tourism and civil aviation sectors have been expanded under ECLGS 3.0.

Also, the credit limit for eligible borrowers was increased from 40 per cent to 50 per cent of their fund-based credit outstanding. The increased limit is subject to the maximum 200 crores per borrower.

Since its launch in May 2020, the loan value 3.19 lakh crore has been sanctioned till March 25, 2022. About 95 per cent of the guarantee issued is for loans sanctioned to micro, small and medium enterprises.

The meeting to be held in New Delhi will set the agenda for the current financial year which has just begun. During the last financial year, none of the public sector banks suffered any loss in the April-December period and made a collective net profit 48,874 crore during this period.

PSBs earned a combined net profit of 31,820 crore in 2020-21. However, there was a collective loss for five consecutive years during 2015-16 to 2019-20. The highest amount of net loss was recorded in 2017-18 85,370 crore, after that 66,636 crore in 2018-19; 25,941 crore in 2019-20; 17,993 crore in 2015-16 and 11,389 crore in 2016-17.

During 2009-10 to 2014-15, public sector banks were making profits on their books.

To improve the financial health of PSBs, the government implemented a comprehensive 4R strategy – transparent recognition of NPAs, recovery and recovery of value from stressed accounts, recapitalization of PSBs, and reform of PSBs and the wider financial ecosystem – a Responsible and clean system. Comprehensive steps were taken under the Rs 4 strategy to reduce the NPAs of PSBs.

As part of the strategy, the government has invested 3,10,997 crore for recapitalization of banks during the last five financial years – 2016-17 to 2020-21, out of which 34,997 crore were received through budgetary allocation and 2,76,000 crore through issuance of recapitalization bonds to these banks.