PM Modi Holds Meeting with Top Bankers, NBFCs on Economic Revival Amid Covid-19 Crisis

Prime Minister Narendra Modi on Wednesday held a meeting with top bankers and impressed upon them the need to push lending towards the productive sectors for revival of the economy hit by the COVID-19 pandemic.

The three-hour long meeting, held via video-conferencing, was attended by CEOs of large public and private sector banks along with heads of non-banking financial companies (NBFCs).

According to sources, the importance of the financial sector in achieving the objective of 'Atmanirbhar Bharat' or self-reliant India was highlighted during the meeting.

The Prime Minister assured all support from the government to the financial sector in achieving the objective, the sources said.

The topics on agenda for the meeting included credit products and efficient models for delivery, financial empowerment through technology, prudential practices for stability and sustainability of the financial sector.

Those who attended the brain-storming session included SBI Chairman Rajnish Kumar, PNB Managing Director S S Mallikarjuna Rao, ICICI Bank Managing Director Sandeep Bakhshi, HDFC Bank Managing Director Aditya Puri and HDFC Ltd Managing Director Renu Sud Karnad, among others, sources said.

Following the outbreak of COVID-19, bank credit growth tumbled to 7 per cent in May from 11.5 per cent a year ago. The growth is likely to remain muted during the current fiscal due to uncertainty and consequent risk aversion on part of borrowers as well as lenders.

To push credit growth, the RBI brought down its benchmark lending rate to a historic low of 4 per cent. However, corporate and retail borrowers are still shying away from taking loans.

In the absence of enough loan demand, banks are forced to park their money with the Reserve Bank under the reverse repo window.

The Reserve Bank of India (RBI) eased the monetary policy, reduced reserve requirements and introduced liquidity in the economy to the extent of almost 3.9 per cent of GDP.

Banks and other financial institutions are implementing the bulk of the measures announced in May under the Rs 20.97-lakh crore economic package to deal with the coronavirus crisis.