Says sentiment driving lower passenger vehicle sales, says Finance Minister Nirmala Sitharaman
Demand is back in the system, Finance Minister Nirmala Sitharaman said on Thursday, expressing hope that it, along with increased lending, would perk up the economy in the second half of the current financial year. The finance minister’s statement came amid growing concerns about a slowing economy. The economic growth plunged to an over six-year low of 5 per cent in the first quarter.
“Things are looking forward and upward from here, and we hope to take this message across,” Nirmala Sitharaman said after holding a meeting with top executives of private sector banks, housing finance companies, and micro finance institutions (MFIs). Last week, she had met heads of public sector banks and asked them to go for an outreach programme to step up lending.
None of the bankers in the meeting on Thursday said they faced any liquidity issues. They, however, admitted there were some glitches, such as those related to know-your-customer (KYC) norms and co-origination of loans by non-banking financial companies (NBFCs) and others. They also said there was enough demand for loans, she added.
“On the whole, it was a very tonic-like meeting where I heard good things, positive things,” she said, adding that “the message I got is that consumption is happening and there are no liquidity issues”.Finance Secretary Rajiv Kumar invited private sector banks to join the outreach programme in 400 districts for potential lending. The first phase of the programme will start in 250 districts from October 3-7, he said. The next phase will begin around Diwali. Maintaining that there was no liquidity issue, Kumar said the outreach programme was being organised to take advantage of the festival season.
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