The Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman lately held a review meeting with the heads of Scheduled Commercial Banks and NBFCs through Video Conferencing. In the meeting, the Finance Minister reviewed their state of preparedness for implementation of the loans resolution framework for COVID-19 related stress. She impressed upon the lenders that as and when moratorium on loan repayments is lifted, borrowers must be given support and COVID-19 related distress must not impact the lenders' assessment of their creditworthiness. During her interaction, she focused on
The Finance Minister also emphasised that Resolution schemes must be rolled out by lenders by 15th September, 2020, and a sustained media campaign to create awareness be carried out thereafter. The Ministry of Finance has also been engaging with RBI to ensure that the lenders are assisted by RBI in the resolution process.
The Finance Minister also reviewed the progress made by various lenders under ECLGS, PCGS 2.0 and Sub-ordinate Debt Schemes announced as part of the 'Aatmnirbhar Bharat Abhiyaan', and advised lenders to try and extend the maximum possible relief to borrowers before the festive season. An amount of INR 1.58 lakh crore has been sanctioned as on 31.8.2020 under ECLGS, out of which more than INR 1.11 lakh crore has also been disbursed. Under PCGS 2.0, Bonds/CPs of INR 25,055.5 crore have been approved for purchase by Public Sector Banks so far, out of which INR 13,318.5 crore amounting to more than 53 per cent of the portfolio pertains to Bonds/CPs rated below AA-. The Scheme has, thus, been a crucial intervention for lower rated Bonds/CPs, according to the official statement.
The Finance Minister appreciated the efforts of banks and NBFCs during the lockdown in effective implementation of the Pradhan Mantri Garib Kalyan Yojana and the Aatmnirbhar Bharat related measures. She also exhorted the lenders to proactively respond to needs of companies and businesses, as well as those of individual borrowers, and to spearhead the efforts for rebuilding businesses desperate for help owing to COVID-19 related distress.