The Finance Ministry on Monday held a gathering with heads of public sector banks (PSBs) to evaluate their annual efficiency and progress made by them on varied authorities schemes.

The assembly was scheduled to be chaired by Finance Minister Nirmala Sitharaman, however she couldn’t attend because of another urgent engagement.

Nevertheless, the annual efficiency evaluate of PSBs was chaired by Minister of State for Finance Bhagwat Ok Karad. Apart from the minister, Monetary Companies Secretary Sanjay Malhotra and different senior officers of the Division of Monetary Companies (DFS) have been current on the assembly.

Based on sources, banks have been requested to sanction loans for productive sectors to speed up the revival of the financial system going through headwinds, together with from the Russia-Ukraine warfare.

In the course of the Iconic Week celebration of the finance ministry earlier this month, banks carried out outreach programmes throughout the nation the place eligible debtors have sanctioned loans on the spot.

Banks have been requested to expedite non-performing belongings (NPAs) decision and deal with the restoration of dangerous loans, the sources mentioned.

The assembly took a inventory of credit score development, asset high quality and enterprise development plan of banks, sources mentioned, including non-performing belongings (NPAs) of Rs 100 crore and the restoration standing have been additionally mentioned.

There was a complete evaluate of assorted segments and progress within the authorities schemes, together with the Kisan Credit score Card and Emergency Credit score Line Assure Scheme (ECLGS).

Within the Finances, the ECLGS was prolonged by a yr until March 2023. Additional, the assure cowl for the scheme was expanded by Rs 50,000 crore to Rs 5 lakh crore.

The protection, scope, and extent of advantages beneath ECLGS 3.0 for hospitality, journey, tourism, and civil aviation sectors have been expanded.

Additionally, the credit score restrict for eligible debtors was elevated to 50 per cent of their fund-based credit score excellent from 40 per cent earlier. The improved restrict is topic to a most of Rs 200 crore per borrower.

Apart from, the sources mentioned, the evaluate of capital necessities of banks and the monetary inclusion drive have been a part of the agenda.

It’s to be famous that the assembly was held in opposition to the backdrop when all PSBs posted a revenue within the second monetary yr in a row. They’ve greater than doubled their web revenue to Rs 66,539 crore in FY22. The collective revenue of 12 state-owned banks collectively was Rs 31,820 crore in FY21.

Nevertheless, there have been collective losses for 5 straight years throughout 2015-16 to 2019-20.

The best quantity of web loss was registered in 2017-18 at Rs 85,370 crore, adopted by Rs 66,636 crore in 2018-19; Rs 25,941 crore in 2019-20; Rs 17,993 crore in 2015-16 and Rs 11,389 crore in 2016-17.

To enhance the monetary well being of PSBs, the federal government carried out a complete 4Rs technique — recognition of NPAs transparently, decision and restoration of worth from confused accounts, recapitalization of PSBs, and reforms in PSBs and the broader monetary ecosystem — for a accountable and clear system.

Complete steps have been taken beneath the 4Rs technique to cut back NPAs of PSBs.

As a part of the technique, the federal government has infused Rs 3,10,997 crore to recapitalise banks over the last 5 monetary years — from 2016-17 to 2020-21, out of which Rs 34,997 crore have been sourced via budgetary allocation and Rs 2,76,000 crore via issuance of recapitalisation bonds to those banks.

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