Finance Minister Nirmala Sitharaman during a press conference on Thursday, September 19, 2019. (Photo: Twitter/ANI)
The government has asked all the banks not to declare any stressed loan account to Micro, Small and Medium Enterprises (MSMEs) as NPA till March 31, 2020, citing a Reserve Bank of India order, Finance Minister Nirmala Sitharaman said on Thursday. The banks have also been asked to work on recasting their debt.
Addressing a press conference after meeting the PSU bank heads, Sitharaman said that a circular have already issued by the Reserve Bank provides for stressed loan accounts of MSMEs not being declared non-performing assets or NPAs.
"We have told the banks that till March 31, 2020 no stressed asset MSME will be declared an NPA. We have also requested that the bank should make an effort to sit with such stressed asset MSMEs & work it out with them to get them out of that situation," Sitharaman said.
She said banks have been asked to follow that circular and not declare any stressed MSME loan as NPA till March 2020 and look at recasting their debt. Also, banks have identified some NBFCs that they can lend to so that liquidity and credit is made available to those seeking money, the finance minister added.
During her meeting with the heads of the PSU banks, the Sitharaman held discussions on overall credit growth with focus on disbursements to key sectors to support the needs of economy. She also reviewed banking initiatives announced earlier with focus on credit growth, rate cut transmission and amalgamation.