(FE)
In a bid to kick-start growth, the government has pushed public sector banks to initiate a nationwide campaign to ensure credit flow to businesses, big and small. For the first time, such a massive coordinated effort is being made by the banking sector to ensure better delivery of services to customers and improve the reach of government schemes.
While the overall credit growth is still at 12%, the flow of credit to small/medium businesses remained weak and export credit growth has contracted. In a bid to counter this sluggishness, state lenders have been nudged by the government to align banking with ‘national priorities’ such as enhancing credit flow to small and medium businesses through psb59 and Mudra schemes, empowering SC/ST entrepreneurs, improving farmer income, facilitating digital transactions and focusing on green economy. PSBs are hoping that a pick-up in demand would help revive credit demand too.
The top brass of state-owned banks have held extensive talks at branch-level, as per a directive of the finance ministry, as the government sought to promote a “bottom-up” approach to herald banking reforms and help India become a $5-trillion economy in the next five years.
