FM Nirmala SitharamanState-owned banks will not declare stressed assets of MSMEs as non-performing assets (NPAs) till March 31, 2020, said Finance Minister Nirmala Sitharaman on Thursday, listing more measures to lift up the economy by ensuring credit.
State-owned lenders will hold meetings with Non-Banking Financial Companies--or shadow banks--and new retail customers in 200 districts till September 29 to explore giving credit, she said at a press conference in Delhi.
Sitharaman was speaking after holding a review meeting with public sector banks (PSBs) to discuss various issues, including follow up on transmission of monetary policy rates.
The Reserve Bank of India (RBI) had earlier this month made it mandatory for banks to link all their fresh retail loans to an external benchmark effective October 1 and the central bank's repo rate being one such benchmark. Following the move, banks such as Punjab National Bank and Allahabad Bank announced linking their retail loans with the RBI's repo rate.
Sitharaman said the RBI had also issued a circular that provides for stressed loan accounts of micro, small and medium enterprises (MSMEs) not being declared non-performing assets (NPAs).
She said banks have been asked to follow that circular.