And now, loan melas under ‘shamianas’

New Delhi: A day before chairing the GST council meeting of the state finance ministers, Finance Minister Nirmala Sitharaman has come up came up with another ingenious solution to perk up the economy: She has announced that PSU banks will hold "shamiana meetings"

In 200 districts with NBFCs and retail borrowers -- a sort of loan fair -- between now and September 29; another 200 districts will see similar gatherings from October 10 to 15.

The FM exuded confidence that there will be a heavy rush of customers at these ‘melas’ to avail of credit to revitalise the economy.Sitharaman also reviewed the liquidity position and lending by public sector banks.

She held a meeting with the heads of these banks to understand what initiatives they can take to revive the economic growth and help the government in tackling the slowdown.

All have to contribute in this hour of crisis, she told them, asking them to step up "affordable credit" linked to the RBI's repo rate, noting that the RBI has already put in place the linkage mandatory for all fresh retail loans by the banks from October 1.

The finance minister told a Press conference here that she made it clear that the government does not want banks to only recycle loans among existing customers. She wants that for every one existing customer who wants loan, banks will have to bring at least five fresh customers for loans.

Also, no MSME would be declared as an NPA (non-performing asset) till March next.Sitharaman also attended on Thursday the first meeting of the cabinet sub-committee headed by Home Minister Amit Shah to discuss divestment of Air India, which ended without any decision.

On table is almost 100% stake divestment in the national carrier after its earlier attempt to divest 76% drew a blank.

The FM said most part of her discussions with the bank heads were on the liquidity moving from banks to the NBFCs (Non-Banking Financial Companies) and from NBFCs to customers, who need the money.

"Banks have identified such NBFCs whom they can straight away lend and some of this has already started happening, while the rest is in the pipeline," she said.

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