Defence Minister Nirmala Sitharaman addresses the press. PTI Photo by Vijay Verma
Defence Minister Nirmala Sitharaman addresses the press. PTI Photo by Vijay Verma

Mumbai: Finance Minister Nirmala Sitharaman on Friday announced that Rs 70,000 crore would be given to the public sector banks to boost their capital and credit capacity.

"Public sector banks will be provided Rs 70,000 crore to boost capital and improve credit," said Sitharaman, while presenting the Union Budget 2019-20. She said that public sector banks will use technology for enabling the customer of one PSB to access service across all PSBs as well.

Also, even as NBFCs are regulated by the RBI, it has limited authority over the sector, therefore appropriate proposals for strengthening the regulatory authority of RBI over NBFCs are being placed in the Finance Bill, the minister said.

However, she said NBFCs that are fundamentally sound should continue to get funding from banks and mutual funds without being unduly risk averse. The Finance Minister also announced one-time six-month partial credit guarantee for the PSBs.

"For purchase of high-rated pooled assets of financially sound NBFCs, amounting to a total of Rs 1 lakh crore during the current financial year, government will provide one time six months' partial credit guarantee to public sector banks (PSBs) for first loss of up to 10%," Sitharaman said.

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