One of the agenda items stated that the discussions will look at the banks’ progress under the Reserve Bank of India (RBI)'s Targeted Long-Term Repo Operations (TLTRO). The RBI had received bids for only about half the Rs 25,000 crore it offered under its revised TLTRO last month, indicating that banks
were reluctant to lend to NBFCs.
Sitharaman will review the credit flow to the NBFCs
and “interest rate transmission to borrowers” along with “deployment of funds under reverse repo.”
Reverse repo rate is the interest rate that the RBI pays to banks for parking surplus funds with it. Although it has been cut twice, banks have deployed Rs 8.53 trillion at the reverse repo window.
“Banks have sanctioned loans to companies, but these have not yet been disbursed as industries are waiting to start business. This is a major reason why the banks have parked surplus funds with the central bank,” a top Finance Ministry official explained, requesting anonymity.
The Finance Ministry said on Thursday that state-owned banks sanctioned loans worth Rs 5.66 trillion during March-April this year.
‘Can generate big volumes in currency derivatives’
Finance Minister Nirmala Sitharaman
on Friday expressed hope that trading of rupee-dollar derivatives contracts in India will generate huge volumes, given the world class business environment and competitive tax regime at GIFT-IFSC. The minister on Friday launched INR-USD futures and options contracts on the two international exchanges -- BSE's India INX and NSE's NSE-IFSC, at GIFT-IFSC in Gandhinagar, Gujarat.
"Given the world class business environment and competitive tax regime at GIFT-IFSC, it is expected that trading of INR-USD contracts may bring volumes to India," she said.
The finance minister
opened the trading facility by ringing the bell electronically through video conference.
Trading volumes on India INX have been growing phenomenally ever since the exchange commenced trading activities in January 2017, BSE said in a statement.
With a cumulative trading volume of $822 billion since launch and international debt medium-term note (MTN) program of about $48 billion, India's INR-USD derivative is expected to attract more participants to the IFSC and make India INX a leading centre for raising capital for issuers across the globe, it said. PTI