Increase credit flow, act without fear or favour: FM to banks

Department of financial services secretary, Hasmukh Adhia, also asked banks to encourage solar and non-conventional energy.

While urging state-owned lenders to increase credit flow to various sectors, finance minister Arun Jaitley on Thursday also asked them to sternly deal with bad loans and defaulters without any fear or favour.

“The meeting discussed improving credit offtake to sectors such as small and medium enterprises, power and roads. However, some bankers said that at present there is low demand,” said a person close to the development. The minister also exuded optimism that credit growth would pick up in the second quarter as a large number of projects are queuing up for funds.

Department of financial services secretary, Hasmukh Adhia, also asked banks to encourage solar and non-conventional energy with grid connection and consider financing them as part of the housing loan. Gross advances of public sector banks grew 9.06 per cent in the quarter ended September 2014 as against an 18.8 per cent growth in the corresponding period a year ago.

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Meanwhile, the finance minister, who was addressing the heads of public sector banks and financial institutions stressed that banks must work in a professional manner without any fear or favour. He said, “The decision making process must be influenced by professional reasons and not collateral ones.” He also urged bankers to take necessary corrective measures to bring down non-performing assets.

An official release from the finance ministry said that banks have been directed to ensure more focused monitoring of their performance and also defending their interest at the Debt Recovery Tribunals (DRTs) and High Courts.