RBI governor meets MD & CEOs of public sector banks over video conference

New Delhi: Reserve Bank of India (RBI) governor Shaktikanta Das held meetings with the MD & CEOs of Public Sector Banks on Wednesday (May 19, 2021) through video conference. The meeting was attended by Deputy Governors M.K. Jain, M. Rajeswar Rao, Michael D. Patra andT. Rabi Sankar.

In his opening remarks, Das acknowledged the important role being played by PSBs in extending various banking facilities including credit facilities to individuals and businesses while tackling the challenges brought on by the pandemic. He impressed upon the banks to quickly implement the measures announced by RBI recently in the right earnest. 

He also urged the banks to continue focussing on steps to enhance the resilience of their balance sheets. Among other matters, the following issues were discussed in the meeting:

• Current state of the financial sector;
• Credit flows to different sectors including to small borrowers, MSMEs, etc.
• Progress in the implementation of Covid Resolution Framework 1.0;
• Monetary policy transmission; and
• Implementation of Covid-related policy measures taken by RBI

Earlier this month, in a much-awaited announcement for banks as well as borrowers, Das announced the first set of relief measures to help stakeholders battle the impact of the second wave of Covid-19 infections in the country. The announcements included loan restructuring facilities for individuals, small businesses and Micro, Small & Medium Enterprises (MSMEs) who have not availed restructuring earlier. Lending institutions can grant further relief to borrowers who have already availed restructuring the Governor said.

Another key announcement was an on-tap liquidity window of Rs 50,000 crore to ramp up Covid-19 related health infrastructure. Banks will have to create a Covid loan book for lending under the scheme. The Governor emphasized that the immediate objective is to save lives and restore livelihoods. “We are committed to go unconventional and devise new responses as and when the situation demands,” he had said.

In today’s meeting, PSU banks were asked to quickly implement recent Covid relief steps. Das urged PSU banks to focus on enhancing balance sheet resilience.