PSU banks disbursed around Rs 2.5 trillion in loans during October: Govt

State-owned banks disbursed around Rs 2.52 trillion worth of loans in October through loan melas, camps and other outreach initiatives, a finance ministry statement said on Thursday.

This follows an announcement by Finance Minister Nirmala Sitharaman in September that banks would conduct such customer outreach initiatives as the government looks for various ways to boost liquidity and investment, while facing the worst slowdown in more than half a decade, in real terms.

However, as the information provided by the ministry showed, almost half of the loans disbursed were to corporate entities — at around Rs 1.23 trillion — and only Rs 37,210 crore worth of loans went to micro, small and medium enterprises. Agriculture loans fared a little better at Rs 40,504 crore, while home loans were at Rs 12,166 crore.

Real gross domestic product (GDP) growth rate for the April-June quarter was 5 per cent, the lowest since 2013. The nominal GDP growth rate came in at 8 per cent, the lowest since the third quarter of 2002-03. For the July-September quarter, analysts and internally even the government expect GDP growth rate to be closer to 4 per cent than 5 per cent.

For October, non-banking financial companies (NBFCs) — where the liquidity crunch is most acute — received credit support of Rs 19,627.26 crore from banks, the statement said. This included credit under co-originated credit, pooled buyouts of NBFC assets by banks and partial credit guarantee schemes.

“PSBs (public sector banks) actively reached out to their customers in these camps and made concerted efforts towards activities such as sanctioning of loans in line with prudential norms, opening of accounts along with Aadhaar and mobile seeding of accounts, and popularizing BHIM app. The drive also simultaneously galvanised similar outreach efforts in individual branches of PSBs,” it said.

Of the Rs 2.52 trillion, Rs 1.06 trillion was disbursed towards new term loans, while Rs 46,800 crore was towards new working capital loans, both of which combined to make up 60 per cent of the total disbursement, the statement said.