Interim Finance Minister Piyush Goyal on Tuesday said that public sector banks would work collectively to meet credit requirements of micro, small and medium-sized enterprises that perform well, reported The Indian Express.
“All banks have collectively decided that in two stages, they will take up the credit needs of genuine, deserving well performing good firms,” Goyal said after meeting the heads of 13 public sectors banks in Delhi.
He said lenders would take up credit needs of companies who have borrowings between Rs 200 and Rs 2,000 crore. “In the second stage, they will take accounts with borrowings up to Rs 200 crore, which will also cover MSMEs in large measures,” he added.
Goyal said banks would put in place a creditors agreement among themselves to ensure smooth decision-making with regard to consortium lending. “It was agreed that decisions taken by 66% of the bankers’ in a consortium will now be followed by all the members of a consortium,” Goyal said. “All bankers will take upon themselves certain covenants to work as a team, and not in silos.”
The minister said people’s money was safe with public sector banks and that the government was committed to supporting the banks. “[Government-owned] bank deposits are 100% safe and secure,” he tweeted.
He said the State Bank of India had offered to support smaller banks “who may not have robust risk assessment practices or credit assessment practices through its high quality capabilities”.
The government was also open to giving the Reserve Bank of India more power over public sector banks, Goyal said. In March, RBI Governor Urjit Patel said the central bank had “very limited authority” over state-run banks. His comments came in the wake of the Rs 13,000 crore fraud at Punjab National Bank.