Finance minister Nirmala Sitharaman on Friday reviewed the preparedness of public sector banks (PSBs) for implementing Rs 20,97,053 crore Aatmanirbhar Bharat economic stimulus package announced between March 26 and May 17, the finance ministry said.
The finance minister on Friday chaired the review meeting through video conference with the chief executives of PSBs “to review the readiness of banks in implementing ‘Aatmanirbhar’ relief package,” it said in a tweet.
The department of financial services (DFS) said the meeting was held to operationalise the announcements made to provide relief to the poor and stimulate the economy. “Everyone aligned on the need for quickly addressing the needs of MSMEs [micro, small and medium enterprises] & other customers,” it said in a tweet. Operational details will be released soon, it said.
The government on March 26 announced a Rs 1.70 lakh crore welfare package under the Pradhan Mantri Garib Kalyan Yojana (PMGKY). It was followed by monetary measures worth Rs 8.01 lakh crore taken by the Reserve Bank of India (RBI) between March 27 and April 17. Recently, Sitharaman announced an additional Rs 11.02 lakh crore stimulus package in five-parts between May 13 and May 17 under the umbrella of Aatmanirbhar Bharat Abhiyan (Self-reliant India Initiative).
PSBs play a key role in the effective implementation of most of the announcements the government made since March 26, hence the finance minister will frequently review the progress made by state-run banks in this direction, two finance ministry officials said requesting anonymity.
Most of the government’s monetary schemes are executed through the PSBs, which are directly responsible for delivering welfare schemes that involve direct benefit transfer, one of the officials said.
The PMGKY, which was announced on March 26, included Rs 500 per month cash payment to 200 million women Jan-Dhan account holders for three months and an ex-gratia of Rs 1,000 to 30 million poor senior citizens, widows and Divyangs each. PMGKY also front-loaded the Rs 2,000 installment paid to 87 million farmers under the existing Pradhan Mantri Kisan Samman Nidhi (PM-KISAN). The effective delivery of this money depends on the efficiency of the banks, the official said.
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The second official said the government is also monitoring the credit flow, which is a must to boost the economy. PSBs have so far sanctioned loans worth Rs 6.68 lakh crore between March 1 and May 19 to 5.97 million accounts.
Both the government and the RBI have made several announcements to provide easy credit to Covid-battered businesses, particularly micro, small and medium enterprises (MSMEs) and the success of these schemes depends on execution at the level of banks, he said. “FM will be monitoring implementation of these schemes frequently,” he added.
The recent announcements made in five tranches included Rs 3 lakh crore credit guarantee for MSMEs and collateral-free working capital loans to small businesses.