Nirmala Sitharaman Says Banks Have Sufficient Liquidity
Finance Minister Nirmala Sitharaman said on Monday that there is sufficient liquidity in the banking system. Addressing the media after a meeting with chiefs of public sector banks, the Finance Minister said banks have been asked to provide a bill discounting facility to the micro, small and medium enterprises (MSME) sector against dues from large corporates, in order to ensure liquidity for small businesses. Efforts are being made to ensure that dues are released to the MSME sector by large corporates, Ms Sitharaman said.
Here are 10 things to know:
1. All efforts would be made to ensure that the MSME sector gets its dues ahead of Diwali, the Finance Minister said.
2. According to the returns filed by large corporates to the Corporate Affairs Ministry, there are dues worth Rs. 40,000 crore to the MSME sector, she said.
3. Talks between the Finance Ministry and the state-run lenders come at a time the government has announced a slew of measures to revive economic growth.
4. The finance minister said on Monday that the the bank merger process was "going smoothly".
5. In August, the government announced a mega consolidation plan in a bid to strengthen the financial system and push economic growth.
6. The four mergers proposed to combine Punjab National Bank with Oriental Bank of Commerce and United Bank; Canara Bank with Syndicate Bank; Union Bank of India with Andhra Bank and Corporation Bank, and Indian Bank with Allahabad Bank.
7. The consolidation plan would lead to 12 public sector banks in the system instead of 27, the government said.
8. India's GDP or gross domestic product expanded 5 per cent in the quarter ended June, marking the lowest pace of growth in more than six years.
9. The Finance Minister has earlier said that GDP growth is likely to pick up in the October-March period as consumer demand is expected to improve in the festival season.
10. Meanwhile, the Finance Ministry said that loans worth Rs. 81,781 crore were disbursed during the nine-day outreach programme organised by banks.