Budget 2020; FM Sitharaman sees heads of PSBs discussing credit situation, economy

New Delhi, December 28: Ahead of the General Budget 2020, Finance Minister Nirmala Sitharaman held a review meeting with chief executive officers (CEOs) of public sector banks (PSBs) on Saturday.

 

The FM followed up on the Union Budget announcement made in July, in which she had said customers or merchants won’t be charged merchant discount rates (MDRs) as the Reserve Bank of India and banks will absorb the costs. Sitharaman also discussed with PSBs the prospects of launching RuPay credit cards, a move that was recently announced by SBI Card.

 

 

Further, overdraft facility to beneficiaries of the Pradhan Mantri Jan Dhan Yojana through RuPay card were taken up in the meeting which is scheduled to be held over a duration of two hours. "RBI and banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment," she had said in her Budget speech in July.

 

Performance review of online platform for auction of secured assets under SARFAESI Act was also one of the agenda for the meeting. It also took up discussion on non-performing asset recovery through both NCLT and non-NCLT means, the sources said.

Banks have recovered Rs 4,01,393 crore over the previous four financial years, including record recovery of Rs 1,56,702 crore during 2018-19. The meeting took stock of the banking sector and pushing loan growth. Despite the Reserve Bank of India (RBI) making credit cheaper, lending rates are rising for borrowers after accounting for inflation and falling economic growth.

 

Economic growth has fallen to an over six-year low of 4.5 per cent in the September quarter and is widely expected to slip further with almost all key components of the economy contracting. The RBI has responded by cutting rates by 110 basis points to a nine-year low of 5.40 per cent.