“To keep up the momentum of stimulus that we are periodically giving, we have also asked banks to go out and give credit,” she said, addressing a press conference after her review meetings with bank chiefs in Mumbai on Wednesday. The finance minister referred to the 2019 ‘loan melas’ undertaken by banks across 400 districts to promote credit in retail, agriculture & MSME (referred to as RAM).
“Approximately Rs 4.9 lakh crore was disbursed as part of this outreach between October and March 2019. This year, too, there will be a credit outreach in every district of the country,” said Sitharaman. She pointed out that it was too early to conclude that there is a lack of demand for credit and the festive season would see a natural pickup.
“In the context of fintechs, I have highlighted to banks two aspects — the advantages to banks of technology, and also meeting the needs of fintech as a sector,” she said. The public sector banks have also been asked to come up with a plan for credit flow to eastern states with high deposits and low credit offtake.
The finance minister was all praise for public sector banks, which she said have done well financially by recording profits and coming out of the Reserve Bank of India’s prompt corrective action framework. They have also managed to raise capital from the market even as they serviced government schemes during the pandemic without going off track in their amalgamation process. Before the pandemic, the government had announced the merger of 10 public sector banks into four, which has since been completed.
On the divestment of stake in public sector insurance companies, the finance minister said that the government has decided to have a minimal presence in the insurance sector. This would mean that it will continue to hold a stake in Life Insurance Corporation, the General Insurance Corporation and in the non-life companies.
Sitharaman, who earlier held meetings with officials of the Central Board of Direct Taxes and the Central Board Of Indirect Taxes & Customs, said that the government has — through the use of technology — been able to identify several methods used to game the system. She said that the new normal for GST collection was Rs 1.1 lakh crore a month. On inflation, the finance minister said that the government has taken several measures to keep prices under check by cutting import duties on pulses and edible oils and, in her estimate, inflation would be within the target range of 6%.
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