New Delhi, June 12 (IANS) Bankers, including RBI officials and financial institutions, will meet the Finance Minister on their turn to hold pre-Budget meeting with the Finance Minister Nirmala Sitharaman on June 13 where the government is expected to tell the lenders on the need to ease credit flow to the MSMEs and small borrowers and with a revised RBI circular in place to make cases for loan recoveries.
The meeting between bankers and financial services institutions is expected to be more of a stock-taking exercise following the RBI circular on controlling NPAs through insolvency and medium businesses.
The Minister is expected to discuss ways to improve financial health of state-owned banks, their non-performing assets position and improving lending to priority sectors such as micro, small and medium enterprises (MSMEs) and agriculture, sources said.
The Reserve Bank of India figures reveal the bank credit has grown 14.88 per cent.
Sources said the FM may remind the PSU lenders of ensuring transmission of RBI rate cuts to the benefit of common borrowers.
Insurance companies are also part of the pre-Budget meeting where they are likely to seek fund infusion to maintain insurance regulator Insurance Regulatory and Development Authority’s (IRDA) solvency ratio norm of 1.5.
The Department of Financial Services may propose fund infusion in three insurance companies — National Insurance Company, Oriental Insurance Company and United India Insurance Company.
Banks and insurance companies are likely to seek tax benefit for their products in the Budget.
In a bid to up lending to the infrastructure sector, bankers are likely to pitch for the need to support infrastructure funding and demand tax-free bonds for this sector.
(Anjana Das can be contacted at [email protected])