Minister Nirmala Sitharaman
meets top management of private banks
and financial institutions on Thursday, she might discuss external benchmarking of retail loans
as mandated by the Reserve Bank of India
(RBI) from October 1, and how banks
were spreading awareness among customers about the move. The meeting will begin at 5:30 pm.
Concerned over poor transmission of interest rates by banks, the RBI
had earlier this month mandated that all banks
will have to link retail loans
with an external benchmark, such as the repo rate.
All lenders are supposed to introduce such products by October 1.
Sitharaman will take stock of how the lenders are supporting the needy segments of borrowers, such as micro, small and medium enterprises (MSME) and non-banking financial companies.
Even as the MSME sector feels the pinch of an economic slowdown, credit to the segment has taken a knowck lately. After a series of defaults by Infrastructure Leasing and Financial Services (IL&FS) last year, the NBFC sector has been the most impacted in terms of fund crunch.
minister will also discuss with private lenders about their experience with liquidity infusion facilities provided by the National Housing Bank.
The meeting with private banks
comes a week after the finance
minister met with the chief executives of public sector banks (PSBs) last Thursday. Sitharaman had announced a slew of measures, including loan camps across 400 districts of the country and that PSBs would not declare stressed MSME assets non-performing assets, as suggested by an RBI
Sitharaman is expected to hold a press conference at around 7 pm.