Addressing the media after the marathon meeting, the minister said to banks that they should bring down their interest rates in order to lessen the burden of EMIs of loans to encourage sale of consumer durables, which in turn will restart the growth engine of the manufacturing sector.
“EMI must be kept at affordable level. The move to reduce interest rates will encourage consumers to buy consumer durables to keep the engine of manufacturing going,” said P. Chidambaram.
Focusing on the problems faced by students in getting education loan he said that it is a right of every student and the banks should respect this. He added that if any bank denies education loan to eligible students then a strict action will be taken.
The Finance Minister asked the banks to focus more on those sectors that are in dire need of credit. He stressed on the revival of investment while saying that investment revival is the key to run the engine of the growth.
“If investment I revived then majority of the problem will end. Whether it is small, medium or large industries, it is important to revive investment across all the sectors,” said Chidambaram.
Farm loans in the drought affected areas will be rescheduled and farmers will be given credit for buying fodder for their cattle. He said, the banks have been advised to double the number of 63000 ATMs in the country and also to convert them into cash accepting machines as well.
Issues related to Non-Performing Assets (NPA) of PSBs, private sector banks and measures for prevention of new accretion to NPAs have been also discussed in the meeting. Along with other issues, credit to the agriculture sector and central schemes for facilitating agricultural lending and priority sector lending were also high on the agenda during the meeting.
In the meeting the performance of Regional Rural Banks (RRBs) under various parameters and synergy with sponsor banks was deliberated upon.
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