Nirmala Sitharaman, the Finance Minister of India, has reportedly rolled out measures to monitor the slowdown in the nation’s economy.
In a statement released by the Ministry of Finance, Nirmala Sitharaman will be meeting all the concerned shareholder to discuss the issue and finalise the measures to boost industrial credit in the economy.
The Centre has announced that additional liquidity will be provided for home loans to make affordable housing a reality. In the same line, a capital infusion of Rs 10,000 crore in the housing sector has also been approved by the government.
The FM has also sanctioned a one-time guarantee for partial credit to Public Sector Banks (PSU) when buying top-rated pool assets of NBFCs.
The Finance Ministry announced that a meeting would be conducted by Nirmala Sitharaman to discuss the potential of credit growth across various sectors in the nation. The meeting will be attended by the heads of all the PSU banks and major commercial banks, according to sources.
Though credit in the banking sector had initially picked up when the year commenced, a downtrend in the demand and supply led to bank credit slowing down after the first quarter.
A Financial Stability Report by (RBI) highlighted that credit from Non-Banking Financial Companies (NBFCs) had dropped considerably post the IL&FS default case last year. According to the report, the percentage of NBFC loans fell to 26.6% in the commercial sector.
The Parliament had earlier approved reforms in the Insolvency and Bankruptcy Code in the Budget to ensure liquidity among the companies. Not only will the amendment lower the litigation time but also help creditors assess bankrupt companies quickly.