The Centre on Thursday asked banks not to declare any stressed loan accounts of Micro Small and Medium Enterprises as a non-performing asset till March 2020, and work on recasting their debt instead, PTI reported.

Finance Minister Nirmala Sitharaman, at a press conference after meeting the heads of public sector unit banks, said that there was already a Reserve Bank of India circular asking lenders not to declare stressed MSME accounts as NPAs. Sitharaman added that banks have identified some non-banking financial institutions that they can lend to so that liquidity and credit is made available to those seeking money.

Sitharaman also said that the government was reviewing the health of the public sector banks and has asked them to lend more, the Hindustan Times reported. She said that public sector banks will hold meetings with NBFCs in 400 districts from now until October 15 in two tranches, Mint reported.

The finance minister said that the banks will hold meetings in 200 districts from now until September 29. Another 200 districts will be targeted between October 10 and October 15. “Junior finance minister Anurag Thakur will depute ministers or MPs to attend these programmes and come back with report on how it went,” Sitharaman added.

She said that banks have also been asked to provide information on how many customers availed the one-time settlement of loans from September 1 to September 30.

Earlier on Thursday, the finance minister had responded to businesswoman Kiran Mazumdar Shaw’s tweet asking why the ban on e-cigarettes, approved the day before by the Cabinet, was not announced by Health Minister Harsh Vardhan. The Biocon chairperson also asked why the finance minister had also not announced measures to revive the economy. Sitharaman pointed out she was “working on and regularly speaking about measures we have been taking on matters of the economy”.

On September 14, Sitharaman had announced the third set of government decisions to revive the economy, including a Rs 50,000-crore export incentive scheme and a Rs 10,000-crore special window to provide last mile funding for unfinished housing projects. The decisions followed two previous mega announcements designed to encourage private sector investment and bring further stability into the banking system through several public sector bank mergers.

India’s economic growth rate had slipped to 5% in the April-June quarter, the lowest in over six years. In the last few months, core sectors such as automobiles and manufacturing have witnessed a progressive slowdown in growth due to weakened consumer demand and dearth of investments.


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