Centre Asks State-Run Banks To Expand Lending To Boost Demand In Economy

“In order to keep the momentum of the stimulus that we have given we have also asked the banks to go out and give to those that want to borrow from them,” she added.

Finance Minister Nirmala Sitharaman | PTI

Mumbai: Union Finance Minister Nirmala Sitharaman on Wednesday said the state-run banks have been asked to reach out to every district to expand lending to boost demand in the economy.

Addressing the media in the financial capital, Sitharaman said “there will be a credit outreach even this year in every district of the country”.

“In order to keep the momentum of the stimulus that we have given we have also asked the banks to go out and give to those that want to borrow from them,” she added.

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Sitharaman also said that she has requested the public sector banks to have interaction with export promotion agencies at various regional levels as well as with chambers of commerce and industry so that requirements of exporters can be timely well-addressed.

Asserting the nature of banking today is also changing, the Finance Minister said: “We see even from industry inputs that people are able to raise finances even outside of banking system. Several decades post, Independent India has only depended through the banks for funds which businesses would want.”

“Now, industry themselves recognise that they have avenues outside of the banks. Even our banks themselves have raised revenues from the markets,” ANI quoted Sitharaman as saying.

She further said the Current Account Saving Account deposits are “piling up” in the eastern states.

“Banks should give facility of greater credit expansion in that region. So, the credit flow for business development in that region can be better promoted,” she added.

The move comes at a time when most lenders are already witnessing an increase in bad loans.