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Economy will bounce back in second half with festival season: Nirmala Sitharaman

Published: September 28, 2019

Says there’s no liquidity concern among private banks, NBFCs

Asserting that consumption is happening and demand will come back, Finance Minister Nirmala Sitharaman on Thursday expressed confidence that the economy will look up in the second half of this fiscal. After a meeting with nearly 20 honchos of private sector banks, NBFCs, housing finance companies (HFCs) and small finance banks (SFBs) here, she said: “On the whole, it was a very tonic-like meeting where I heard good things, positive things. None of those who were present today expressed any concern over liquidity.”

NBFCs and HFCs are ready to support public sector banks’ (PSBs) liquidity outreach programme across 400 districts in two phases beginning October 3, she added.

The FM further said demand is expected to improve in the festival season though buying is now low due to the ongoing pitrupaksh period.

SFBs and non-deposit-taking NBFCs expressed concern over RBI curbs on their participation in co-origination of loans with PSBs. Asked if steps will be taken to address this concern, she did not commit anything except acknowledging that such a concern was expressed.

The meeting saw participation from eight private sector banks, five NBFCs, five HFCs, six SFBs and four MFIs.

Outreach programme Kotak Bank’s Executive Vice-Chairman and MD UdayKotak said private banks are ready to support the outreach programme on the basis of their own risk management principles and that the Centre was not exerting any pressure to lend.

HDFC’s MD RenuKarnad said there is ample growth potential in the affordable housing segment and private institutions are readily offering several schemes around it. At the meeting, private lenders flagged the need for self-declaration of present address by borrowers who are e-kyc authenticated. This would enable hassle free lending, they said.

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