India’s Finance Minister Nirmala Sitharaman may soon meet the Managing Directors of Public Sector Banks (PSBs) keeping in mind the bank failure in the US and Credit Suisse’s cash crunch. It is being said that she is going to meet the Managing Directors on March 25, in which many big issues can be discussed.
This will be the first full review meeting after the presentation of the Budget 2023-24. Speculations are rife that banks may be asked to focus on areas highlighted by the budget including credit flow to productive sectors. Also, this meeting can be about the global concern over the failure of banks due to aggressive monetary tightening.
The first full review meeting is said to take stock of the progress made by banks for various government schemes including Kisan Credit Card (KCC), Stand-up India, Pradhan Mantri Mudra Yojana (PMMY), and Emergency Credit Line Guarantee Scheme. Could
Apart from this, the Finance Minister will review credit growth, asset quality, capital raising and business growth plan of banks for the next financial year. Also, the status of non-performing assets (NPAs) of Rs 100 crore and their recovery can also be discussed.
Explain that due to various reform schemes undertaken by the government in recent times, there has been a significant improvement in the assets of public sector banks. The gross NPA ratio has come down from 14.6 per cent in March 2018 to 5.53 per cent in December 2022. Thus, the total profit of all PSBs increased to Rs 70,167 crore in the first nine months of the current financial year from Rs 66,543 crore in 2021-22.
The US Fed raised interest rates by 25 basis points on Wednesday to ease high inflation despite a banking crisis. Hence, all eyes will be on what steps the government is taking to fight rising inflation.