Credit for growth: FM's September 19, 2019 announcement
Public sector bank loans: Banks to organise 'loan melas' in 400 districts within a month: Nirmala Sitharaman
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M G Warrier's response:
September 20, 2019
Credit for growth
This refers to the report “FM opens the liquidity tap for Bharat” (Business Line, September 20, 2019). Representing the majority-stake owner of PSBs, the Finance Minister is duty-bound to give directions to the banks in regard to the priorities which should guide them while allocating credit. But the way in which expectations from the banking system were announced on September 19, 2019 by Nirmala Sitharaman is reminiscent of the Loan Mela days of last century.
Indian Banking System has the resources to provide adequate need-based credit to all sectors contributing to the country’s economic growth. There is need to remove the fear complex that has set in following recent developments emanating from rise in NPAs and measures initiated to bring stressed assets of banks under control. The idea of banks interacting with prospective borrowers or popularizing loan products is not bad in itself. Actually, before technology got an upper hand over human interaction, branch managers used to keep a day in a week/fortnight free to listen to their clientele.
While adding new loan business has to be part of the growth process, perhaps, the proposed district-wise shamiana-like meetings should give priority to processing loan applications received by banks prior to September 19, 2019 for obvious reasons.
M G Warrier, Mumbai