Finance Minister Arun Jaitley will meet heads of public sector banks and financial institutions on June 12 to discuss issues related to rising bad loans, interest rate reduction and credit flow to various sectors.
He will also review the performance of the lenders.
The meeting assumes significance as it will be the first after promulgation of the ordinance amending the Banking Regulation Act, 1949, last month. The government had through this ordinance empowered the Reserve Bank to ask banks to initiate insolvency proceedings to recover bad loans and promised more measures to resolve the NPA crisis.
“Major issues on the agenda of the meeting, the first during this fiscal, include issues and solutions relating to Non Performing Assets (NPAs) of the Public Sector Banks (PSBs), status of MSE Credit, Stand-up India and Mudra Yojana, among others,” the finance ministry said in a statement today.
Other issues on agenda include discussion on financial inclusion and literacy, review of performance of Social Security Schemes including Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY) etc, it said.
The day-long meeting will also cover areas like cyber security, digitalisation of the banking transactions, rural development, agriculture credit and education loans. Role and preparedness of banks in the implementation of Goods and Services Tax (GST) is also likely to be discussed in the one day Meeting of PSBs, it said. GST is going to be rolled-out from July 1.
As for the recovery of bad loans, the RBI has also made substantial changes in the related norms and warned banks of monetary penalty for missing NPA resolution timelines.
Jaitley had said the ordinance empowered the Reserve Bank to issue “directions to any banking company or banking companies to initiate insolvency resolution process in respect of a default under the provisions of the Insolvency and Bankruptcy Code (IBC), 2016”.