New Delhi, Sep 19 (UNI) Announcing a slew of measures to tackle the economic crisis post bank mergers, Union Finance Minister Nirmala Sitharaman said on Thursday that stressed MSMEs will not be declared as non-performing assets (NPAs) till March 31 next year.
'We have told the banks that till March 31, 2020 no stressed asset MSME will be declared Non-performing asset (NPA). We have also requested that the bank should make an effort to sit with such stressed asset MSMEs and work it out with them to get them out of that situation,' she said at a press conference here where her deputy Anurag Thakur was also present,.
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, she clarified.
The step would help the MSME sector, the minister said, adding that banks have identified some Non-Banking Financial Companies (NBFCs) that they can lend to so that liquidity and credit is made available to those seeking money.
She said banks will interact with NBFCs in 200 districts across the country between now and September 29.
'Next 200 districts will see similar gathering from October 10,' she stated.
'We reviewed as to what has happened in terms of liquidity moving from banks to NBFCs and from NBFCs to customers,' she pointed out.
'I am happy to say banks have gone ahead with identifying such NBFCs for whom they can straight away lend, many of them have been given facility,' she maintained.
At a press conference after meeting PSU bank heads, Ms Sitharaman said there already exists a circular from the Reserve Bank that provides for stressed loan accounts of MSMEs not being declared NPAs.
She said banks have been very receptive to all the moves the government has announced.
'We want liquidity to reach consumers before the festival season,' she pointed out.
Ms Sitharaman said the government has asked banks for details on one-time settlement of loans during July-September.
She said the government has asked banks to give preference to fresh loan applicants after mergers come into effect.
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