Loan ‘melas’ are back: PSBs to hold credit meets in 400 districts, says FM

Stressed MSME assets will not be labelled NPAs till March 31, 2020

Public-sector banks (PSBs) will hold public meetings with borrowers for distributing loans in 400 districts of the country to boost demand ahead of the festive season, Union Finance Minister Nirmala Sitharaman announced on Thursday.

In this, the banks will take help from non-banking financial companies (NBFCs). The National Democratic Alliance (NDA) government will be following the footsteps of its predecessor, the United Progressive Alliance (UPA) government, which had introduced the concept of “loan mela” to boost credit by directing banks to lend to people through public meetings.

Further, the government has told PSBs not to declare stressed assets of micro, small and medium enterprises (MSMEs) non-performing assets (NPAs) till March 31 next year. This will come as a major boost to the sector with its 65 million firms employing around 120 million workers — the biggest job creation after the agriculture sector. The government is also considering a special dispensation for the farm and MSME sectors