FM Nirmala Sitharaman to meet CEOs of public sector banks on Wednesday

Finance Minister Nirmala Sitharaman will meet heads of PSBs on Wednesday to review financial performance of the lenders and progress made by them in supporting the pandemic-hit economy, sources said.

Finance Minister Nirmala Sitharaman will meet heads of public sector banks (PSBs) on Wednesday to review the financial performance of the lenders and progress made by them in supporting the pandemic-hit economy, sources said.

The meeting with MD and CEOs of PSBs assumes significance given the importance of the banking sector in generating demand and boosting consumption.

Recently, the finance minister had said the government is ready to do everything required to revive and support economic growth hit by the COVID-19 pandemic.

The meeting is expected to take stock of the banking sector and progress on the restructuring 2.0 scheme announced by the Reserve Bank of India (RBI), the sources said, adding that banks may be nudged to push loan growth in productive sectors.

The revamped Rs 4.5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) would also be reviewed during the meeting likely to be held in Mumbai, the sources said.

Besides, the finance minister is expected to take stock of the bad loans or non-performing assets (NPAs) situation, and discuss various recovery measures by banks, they said.

As a result of the government's strategy of recognition, resolution, recapitalisation and reforms, NPAs have shown a declining trend, from Rs 7,39,541 crore on March 31, 2019 to Rs 6,78,317 crore on March 31, 2020 and further to Rs 6,16,616 crore as on March 31, 2021 (provisional data).

At the same time, comprehensive steps were taken to control and to effect recovery in NPAs, which enabled PSBs to recover Rs 5,01,479 crore over the last six financial years, the government informed Parliament recently.

Besides, Sitharaman is expected to declare the results of Ease 3.0 Index for 2020-21, they said, adding that PSBs would be rated on various indexes for the year.

Launched in January 2018, Enhanced Access and Service Excellence (Ease) is the common reform agenda for all public sector banks aimed at institutionalising clean and smart banking.