Mumbai, July 22 (KNN) Reserve Bank of India (RBI) Governor Shaktikanta Das met the heads of Public Sector Banks (PSBs) and discussed ways to improve recovery efforts, giving impetus to resolution of stressed assets facilitated by the June 7 circular, and strengthening internal control mechanisms for improved fraud risk management.

The Governor acknowledged discernible improvements in the banking sector while underscoring that several challenges still remain to be addressed, particularly with regard to the stressed asset resolution and credit flows to needy sectors.

He reiterated his concerns over the "less-than-desired-level" of transmission of monetary policy rates by lenders.

During the meeting credit and deposit growth amidst a slowing economy and the need for credit flow to the needy sectors as well as the urgency for a robust risk assessment and monitoring standards were discussed.

Das also spoke about the impact of the post-budget initiatives to address the credit crisis being faced by Non-banking Financial Companies (NBFCs) and the role that banks can play in mitigating the same.

The meeting also discussed the importance of expanding and deepening digital payments ecosystem in line with the recommendations of the Nandan Nilekani panel report on deepening the digital payments system, and also the RBI's payment system vision document 2021.

On the suggestion of the Governor, it was agreed that banks will identify one district in each state to make it 100% digitally enabled within a time frame of one year in close co-ordination and collaboration with all stakeholders, including SLBCs, State Governments, Regional offices of RBI, etc.

To the extent feasible, such districts may be converged with the 'Transformation of Aspirational Districts' programme of the Government of India. IBA is also expected to play a catalytic role in this regard.