Contact-intensive sectors may require more support, says FM

New Delhi: Amid rising Covid cases threatening to derail economic recovery, Finance Minister Nirmala Sitharaman on Friday in a meeting with top bosses of public sector banks (PSBs) assessed their readiness to tackle possible future disruptions.
While applauding the efforts of the banks in making emergency credit scheme ECLGS a success, the Minister asked the bankers to continue supporting agriculture sector, farmers, retail sector and MSMEs.
The government had come up with Emergency Credit Line Guarantee Scheme (ECLGS) in May 2020 to help the MSME sector to tide over the Coronavirus-induced economic crisis. The scheme later covered more sectors.
In the virtual meeting with Chairmen & Managing Directors (CMDs/MDs) of the public sector banks, Sitharaman noted that business outlook is progressively improving in spite of the headwinds from global development and Omicron spread.
Meeting with PSBs is significant given that Sitharaman would present the Union budget for FY23 in less than a month.
“The Finance Minister underlined that contact intensive sectors may require more support to help them fight against the pandemic,” an official statement said.
On the credit demand front, the Finance Minister said that credit demand is expected to pick up on account of growth in retails segments, improvement in overall macroeconomic prospects and improving financial health of borrowers.
During the review meeting, bankers pointed out that PSBs have observed an improvement in the repayment culture in the country.
“PSBs have performed well and, supported by various policy measures, provided the required impetus to the economy for coming out of shackles of pandemic induced stress,” the statement post-meeting highlighted.
As per official data, PSBs recorded net profit of Rs 31,820 crore in FY 2020-21, highest in last 5 financial years.
Further, it was noted that PSBs have effected a recovery of Rs 5,49,327 crore during the last 7 financial years. The public sector banks together recorded year-on-year credit growth of 11.3% in personal loans, 8.3% in agriculture loans and overall credit growth of 3.5%, as on September 2021.
At the start of review meeting today, SBI Chairperson gave an in-depth presentation on pre-pandemic and current scenario of banking business to the Finance Minister.
Later, CMDs and MDs of various PSBs also shared their views on the overall assessment of the banking business and gave various suggestions for overall growth of business.

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