When the public discourse on the issue of economic slowdown was started a few months back, among many other reasons, it was argued that the unwillingness to lend on the part of Public sector banks remained a hurdle to energies the economy. Of Course, PSBs that had been forced to NPA mess during UPA days may have their rightful worries in lending. The government back then, took note of the concerns and stepped in to ensure credit flow aimed at ensuring MSMEs, NBFCs, corporates, retail and agriculture sector borrowers get a relief without compromising prudential lending.
The major step of recapitalising the PSBs has already started long before. It strengthened banks and helped them lend Rs 2.5 lakh crore. In the Union Budget of 2019-20, Rs 70,000 crore of capital infusion for public sector banks was announced. Many might have wondered at that time what the big deal in it. As we can see, those steps are now ensuring credit to the needy sector.
On August 23, 2019, when Finance Minister Nirmala Sitharaman appeared before the press to announce a slew of measures to boost the economy, much of it was focused on providing additional lending and liquidity to Public Sector Banks and also ensuring that the banks will pass the benefits to the needed segments of the society. This focus was intact in the subsequent announcements as well.
Now the question is, are these measures implemented on ground with the same vigour and the sectors like Micro, Small & Medium Enterprises, and Non-Banking Financial Companies have some cash at their disposal?
The answer is very much positive in this regard.
During the months of October and November, the strong customer outreach by the PSBs has resulted in Rs 4.91 lakh crore disbursal. In November alone Rs 2.39 lakh crore was disbursed to MSMEs, NBFCs, corporates, retail and agriculture sector borrowers.
Among many sectors benefitted by the credit flow are MSMEs and the NBFCs, which ensure cash to the large number of needy people. For instance, the total Customer Outreach credit disbursed to MSMEs stands at Rs 72,985 crore.
Here is how much money flowed to the various sector in the last two months because of the customer outreach initiative.
It is obvious that the government while addressing the concerns over economic slowdown, has not restricted itself to mere announcement but ensured that the measures that are announced were implemented on war footing. Even the media reports also suggest that the government has spent a great deal of its energy in facilitating customer outreach by the PSBs to offer credit in the last two months.