MUDRA Bank needs to be evolved into a bank from an agency: FM
Updated: Jun 12, 2015 04:47:45pm
New Delhi, June 12 (KNN) Finance Minister Arun Jaitley discussed a host of issues including roadmap for the implementation of the MUDRA banks with the Public as well as Private sector banks today. The other issues deliberated upon in the meeting were transmission of rate cuts, problems of higher bad loans and health of the economy with heads of state-owned banks.
Jaitley told the reporters that roadmap for the implementation of Micro Units Development Refinance Agency (MUDRA) Bank was discussed with the bankers because it has to be evolved into a bank from an agency.
Finance Minister in the Union Budget 2015-16 had announced to set up a MUDRA Bank through a statutory enactment, with a corpus of Rs. 20, 000 crore, and credit guarantee corpus of Rs. 3,000 crore.
With regards the non-performing assets (NPAs), Jaitley said the situation has improved in the January-March quarter, but it is important to watch the developments over the next 2-3 quarters before reaching any conclusion.
"In quarter ending March 2015, NPAs had come down from 5.64% to 5.2%. One quarter does not indicate a pattern. So I would wait for some more time before realising what the pattern is. Banks are themselves of the assessment that it would take them 2-3 quarters to reach a somewhat more greater comfort level," he said.
The Minister also expressed the confidence that NPA situation would improve with greater spending thrust of the government and further pick up in the economy.
After meeting the top bankers of the country, Jaitley told reporters that financial services secretary would look into projects held up for want of funds and exuded confidence that soon economy would move to higher growth trajectory.
The government, Jaitley said, would also consider favourably the demand of PSU banks for more capital infusion, over and above what was earmarked in the budget for 2015-16.
On transmission of rate cuts by the Reserve Bank, Jaitley said the banks gave detailed presentation on how each one of them reduced their lending rates.
"Some part of it (rate cut) has been passed on to customers, while some banks have not passed on. I feel over the next few days ... some of the bankers felt that over the next few weeks, they would be in a position to work out greater cuts," the Minister said.
Some banks, Jaitley said, expressed their inability to pass on the rate cuts on account on problems with their respective balance sheets and higher rates on small savings schemes. (KNN Bureau)
Jaitley told the reporters that roadmap for the implementation of Micro Units Development Refinance Agency (MUDRA) Bank was discussed with the bankers because it has to be evolved into a bank from an agency.
Finance Minister in the Union Budget 2015-16 had announced to set up a MUDRA Bank through a statutory enactment, with a corpus of Rs. 20, 000 crore, and credit guarantee corpus of Rs. 3,000 crore.
With regards the non-performing assets (NPAs), Jaitley said the situation has improved in the January-March quarter, but it is important to watch the developments over the next 2-3 quarters before reaching any conclusion.
"In quarter ending March 2015, NPAs had come down from 5.64% to 5.2%. One quarter does not indicate a pattern. So I would wait for some more time before realising what the pattern is. Banks are themselves of the assessment that it would take them 2-3 quarters to reach a somewhat more greater comfort level," he said.
The Minister also expressed the confidence that NPA situation would improve with greater spending thrust of the government and further pick up in the economy.
After meeting the top bankers of the country, Jaitley told reporters that financial services secretary would look into projects held up for want of funds and exuded confidence that soon economy would move to higher growth trajectory.
The government, Jaitley said, would also consider favourably the demand of PSU banks for more capital infusion, over and above what was earmarked in the budget for 2015-16.
On transmission of rate cuts by the Reserve Bank, Jaitley said the banks gave detailed presentation on how each one of them reduced their lending rates.
"Some part of it (rate cut) has been passed on to customers, while some banks have not passed on. I feel over the next few days ... some of the bankers felt that over the next few weeks, they would be in a position to work out greater cuts," the Minister said.
Some banks, Jaitley said, expressed their inability to pass on the rate cuts on account on problems with their respective balance sheets and higher rates on small savings schemes. (KNN Bureau)
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