New Delhi, May 23 (IANS) Union Finance Minister Nirmala Sitharaman on Friday met with heads of public sector banks (PSB) through videoconference for the operationalisation of the economic package under the ”Atmanirbhar Bharat” initiative.
In a tweet, the Department of Financial Services (DFS) said that everyone attending the conference was aligned on the need to quickly address the needs of MSMEs and other customers.
“To operationalise the announcements made by FM @nsitharaman under #AatmanirbharBharat, review meeting through videoconference was held with all PSBs. Everyone aligned on the need for quickly addressing the needs of MSMEs and other customers. Operational details to be released soon,” it said.
Sitharaman also reviewed the readiness of banks in implementing the relief package, which includes several liquidity measures, a Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs and MUDRA borrowers.
Under the scheme, 100 per cent guarantee coverage would be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for the additional funding of up to Rs 3 lakh crore in the form of a ECLGS facility.
Further, the centre has also modified the existing partial credit guarantee scheme for NBFCs wherein the scheme will be extended to bonds or commercial papers (CPs) issued by NBFCs, housing finance companies, and micro finance companies. The Centre would provide sovereign portfolio guarantee of up to 20 per cent of first loss for purchase of bonds or commercial papers (CPs) issued by the financial institutions under the scheme.
Also, the Ministry of Finance under the scheme will launch a new Special Liquidity Scheme for Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) worth Rs 30,000 crore to improve liquidity position of these companies.
For such initiative, the preparedness of the banks is necessary as the schemes and liquidity measures will be routed through them.
Several economists and experts have also raised concerns regarding the impact of the measures on the banks” asset quality. However, given the severe impact of the coronavirus pandemic and the lockdown on businesses and the economy, the steps have been by and large deemed necessary.