Public sector banks (PSBs) alone have disbursed Rs 81,781 crore in the first phase of the outreach programme between October 1-9, Finance Minister Nirmala Sitharaman said on Monday.
Of this, as much as Rs 34,342 crore has gone to new entrepreneurs, Sitharaman told a press conference after a review meeting with chief executives of PSBs in the capital.
Later, replying to queries on whether this sum of Rs 81,781 crore included sums disbursed by NBFCs who were also asked to participate in the outreach programme, Finance Secretary Rajiv Kumar said that the amount of Rs 81,781 crore pertained only to PSB disbursements. If one were to include the amounts that went through NBFCs and small finance banks (SFBs), then the overall amount of credit infusion into the economy would be much higher.
Kumar also announced that the next phase of outreach programme will take place during October 21-25.
It may be recalled that Finance Minister Nirmala Sitharaman has in mid -September announced an outreach programme in two phases involving PSBs and NBFCs to push liquidity into the hands of those in need of credit in the 400 districts of the country.
Meanwhile, the Government on Monday came up with a two-pronged approach to push liquidity into MSMEs which are facing a cash crunch on account of delayed payments from large corporates.
Sitharaman, at the meeting, advised banks to approach MSMEs and offer them the facility of bill discounting if they desire to opt for it. She also simultaneously asked Corporate Affairs Secretary Injeti Srinivas to write letters to the large corporates in the MCA database who have an aggregate outstanding of Rs 40,000 crore to the MSMEs.
Sitharaman said that she has asked banks to come back to her by October 22 to update her on the MSME response to this bill discounting facility. “We will ensure that MSMEs have sufficient liquidity ahead of Diwali,” she said.
Injeti Srinivas, who was also present at the review meeting, said that MCA would “nudge” large corporates to expedite their payments/dues to MSMEs.
Srinivas told the press conference that banks have today conveyed that they would only be using the IBC process as the “last resort”. Suggestions were also made at the meeting that a threshold limit be introduced for triggering of the IBC process so that a single person in a class of people (like homebuyers) does not misuse the facility. Srinivas indicated that the government may be inclined to adopt the current threshold specified for class action suit under the Companies Act even for the threshold in the case of class of persons for triggering of IBC.
Partial credit guarantee
At the meeting with the Finance Minister, banks also made a case for allowing NBFCs with investment grade rating and AA rating for their asset pool to be eligible to participate in the partial credit guarantee scheme.
There is no question of diluting the minimum AA rating specified for asset pools that are being purchased, but the banks want even those NBFCs which don’t have AA rating at the institutional level but have investment grade rating to be eligible for the scheme, Sitharaman said. “We will have to take a call on this suggestion,” Sitharaman said when asked if the government was inclined to accept these suggestions.
So far, banks have sanctioned Rs 15,455 crore under the partial credit guarantee scheme announced by the Finance Minister in the recent Budget, Rajiv Kumar said.