INSUBCONTINENT EXCLUSIVE:
MUMBAI/NEW DELHI: India's government has redoubled efforts to push state-run banks to boost lending and it has demanded that lenders submit
a daily report detailing the volume and scale of loans sanctioned, according to industry sources and documents seen by Reuters.
The finance
ministry, in a letter dated April 17 and seen by Reuters, asked banks to furnish detailed data on new loans, including particulars on what
sectors were getting them.
The push comes after a recent 75 basis point rate cut by the Reserve Bank of India (RBI), and at a time when the
banking system is flush with liquidity pumped in by the RBI to spur new lending and revive flagging growth.
The Indian economy is in a slump
with tens of millions of jobs in jeopardy amid a 40-day nationwide lockdown to stem the spread of the new coronavirus.
Despite the RBI's
push, several senior banking sector executives said lenders remain reluctant to open the tap amid fears of higher default rates with
businesses and jobs at risk.
India's banking system is already reeling under nearly $140 billion in bad debt and it needs more guarantees
from the government before banks can really start lending, said bankers, who asked not to be identified as they were not authorised to
discuss the matter publicly.
Some of the bankers said following the finance ministry push, certain state-run banks had started giving
branch-wise targets to ensure lending was taking place and branch managers were being asked for clarification if targets were not met.
The
government, however, has not given lenders any targets, one of the bankers said, adding it remained a commercial decision.
The finance
ministry and the Indian Banks' Association, an industry body of lenders, did not respond to requests seeking comment.
This article first
appeared/also appeared in
https://economictimes.indiatimes.com/markets/stocks/news/india-pushes-lending-asks-banks-for-daily-reports/articleshow/75325337.cms