Finance Minister Nirmala Sitharaman said on Thursday the ministry has been in talks with the Reserve Bank of India as well as banks on why transmission of interest rate reduction was not happening at the pace at which it should.
”The benefit of reducing interest rate should not be denied to the customer. The RBI is engaged with us. Hopefully, we will come up with some fair solution quickly," she said, while addressing a webinar on MSMEs organised by Chennai International Centre. She said she had been made aware of "reasons", but they were “not convincing”.
Responding to complaints that private banks were not providing support under the emergency credit facility, she said she would have “agreed to the comment 10 days back, but now the private banks are getting on board”. She said that while the public sector banks have cumulatively disbursed around Rs 22,200 crore, private sector banks have disbursed around Rs 10,700 crore. “But then, private sector banks have to buck up a bit more,” she said.
She said the government would consider extending the Rs 3-trillion emergency line of credit to include individual proprietors. Also, Sitharaman said, the industry’s suggestion on providing collateral-free credit based on outstanding goods and services tax bills as security would be discussed internally in the ministry before a call is taken.
The finance minister told the industry it needed to introspect on how businesses are run and on Aatmanirbhar Bharat, for India to realise the full potential. Even while understanding that we have the capabilities, for some reason there is no interest to pursue it, she said. Taking manufacturing of active pharmaceutical ingredients in India as an example, she said: “India is a big captive market and there is a need to produce more within the country.”
She also said the ministry was talking to the RBI on if one-time restructuring can be offered “so that every one comes out of this (stress)”.