"We discussed various measures to support the MSME sector particularly small traders, small businesses and businesses in the remote parts of the country," he said after meeting bank heads at the General Review called by the Financial Services Secretary Rajeev Kumar.
Goyal also asked all the 21 state-owned banks to take steps to promote finance for housing, make bank operations more efficient, achieve the government goal of financial inclusion and to take necessary measures to significantly increase the level of domestic credit growth.
"The banks discussed various measures to promote finance for housing and give a thrust to home owners to get adequate financing. They have also discussed various ways in which the operations of the banks can become more efficient, customer-friendly, profitable as well as ensure the stated goals of this government to reach financial inclusion of every Indian anywhere in the country," the Minister said.
The PSBs agreed to step up their efforts to finance the Pradhan Mantri Awas Yojana which is aimed at securing housing for all by 2022.
At the meeting, Goyal took note of the reduction in non-performing assets (NPAs) of banks under RBI's Prompt Corrective Action (PCA) framework and advised them to maintain the trend of improvement in performance with a view to bringing them out of the PCA framework at the earliest.
He also highlighted the need for each and every PSB to ensure that recent gains are sustained and better service delivered to all stakeholders.
"The banks expressed their confidence that after the government has amended the Prevention of Corruption Act (PCA) giving them the confidence that while anybody indulging in misfeasance or bad practices will not be spared but genuine commercial decisions taken by bankers will also be protected," Goyal said.
Earlier in the day, RBI Governor Shaktikanta Das, who attended the first half of the meeting, flagged the need for further strengthening various aspects of banking, including underwriting standards, capacity building, use of technology and governance.
He flagged the need for PSBs to extend credit while observing prudential norms but without excessive conservatism. He asked banks to take advantage of the MSME restructuring scheme to support viable MSME units.
The government said the review was against the backdrop of visible signs of strengthening of the financial situation of PSBs as a result of government's approach of recognition, resolution, recapitalisation and reforms, which has positioned PSBs to step up their support to meet the lending needs of a growing economy.
"On the back of recapitalisation of PSBs by over Rs 2.6 lakh crore and recovery of over Rs 2.8 lakh crore -- including record recovery of over Rs 1 lakh crore in the first three quarters of the current financial year -- since clean-up began in 2015, and comprehensive reforms for better underwriting of loans, PSBs committed to significantly step up the level of domestic credit growth from 9.1 per cent year-on-year at the end the second quarter of the current financial year," an official statement said.
During the meeting, the banks committed to further improve on the robust growth in credit and reducing trend in turnaround time for loan applications through growing use of fintech and technology "as evidenced by the success of the 59 minutes loan portal, through which over 1.25 lakh MSMEs have been accorded in-principle approval", the statement said.
"Banks agreed to work further on increasing use of advanced data analysis and where possible, Artificial Intelligence algorithms for better, faster and hassle-free credit decisions and monitoring of accounts," it added.
The government also asked the banks to expeditiously complete the opening of branches and banking outlets in Left-wing extremism affected areas. The banks were also asked to ensure that the benefits extended under Pradhan Mantri Jan Dhan Yojana -- by making overdraft facility and accidental insurance cover on RuPay cards more attractive -- reach the common people.
"Banks were asked to leverage the pipeline of Jan Dhan-Aadhaar-Mobile (JAM) to provide better access to financial inclusion products and services to accelerate the realisation of a digitalised, financially included and insured society," the statement said.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
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