Banks have been asked to give year-wise analysis to ascertain whether there was a significant rise in lending to non-banking financial companies in 2016-17 and 2017-18 when direct lending to businesses — corporate and micro, small and medium enterprises — fell or “did not rise much.”
State Bank of India
Group Chief Economic Advisor Soumya Kanti Ghosh, in his paper ‘Bank credit towards a $5 trillion economy’, said PSBs
will require an incremental capital of Rs 3-4 trillion “to enable Rs 50-60 trillion of incremental lending to manufacturing and services (excluding retail) for attaining a $5-trillion economy in next five years.
In his paper on ‘Corporate Governance in PSBs’, Kotak has made recommendations in three phases: disclosures and transparency, management and accountability, and governance for corporate reforms among PSBs. Among various steps, he suggested similar governance framework for private and public banks, compliance of Securities and Exchange Board of India (Sebi) norms, longer tenure for managements (including review of retirement age), better compensation structure and professionalising PSB boards, among others.
To bolster retail lending in the country, Puri suggested aligning risk weights for retail loans with internationally accepted Basel norms. He further asked banks to invest in retail processes and adopt digital technology.
Subramanian advocated for a digitised mechanism, on the lines of the goods and services tax network, for screening borrowers and monitoring them carefully. “As the government is the owner of all PSBs, it can mandate the PSBs to share this data so that economies of scale can be utilised,” Subramanian said.
member Ramesh Chand and Nabard Chairman Harsh Kumar Bhanwala discussed building a robust system of monitoring agriculture credit, requirement of rural infrastructure for credit absorption and pointed to various issues related to regional discrepancies in farm credit and Kisan Credit Cards.
In his paper, Punjab & Sind Bank Chairman Charan Singh has suggested creating a national financial grid, especially in rural areas, and leveraging Jan-Dhan accounts for giving Mudra loans.