PM Modi to hold review meeting with banks, his first since Covid outbreak

Agenda not known yet, but meeting via video conferencing likely to be on credit flow especially to MSMEs

Current Affairs: Prime Minister Narendra Modi is set to hold a meeting with the chief executives of state-owned and private banks on Wednesday. This is the first meeting that the Prime Minister (PM) is going to hold with the brass of financial institutions after the Covid-19 pandemic. The meeting will be held through video conferencing, a bank executive said.

“The agenda of the meeting hasn’t been circulated yet. But it is expected that the PM will discuss credit flow to the economy, especially the micro, small and medium enterprises (MSMEs), and map the progress of the government’s Covid-19 package,” another bank executive said, requesting anonymity.

A finance ministry official said that the announcements of the government so far relied heavily on restarting economic activities with the help of financial institutions and the PM wants to take stock of the progress. Finance Minister Nirmala Sitharaman is also expected to attend the meeting. Apart from major public sector banks, top executives of some private lenders such as Kotak Mahindra Bank, ICICI Bank, HDFC Bank and the Indian Banks’ Association are also expected to be present in the meeting on Wednesday.

Rs 3 trn to act as booster, to help 450,000 MSMEs, says Ravi Shankar Prasad

More important in the contract for the government of India supply upto 200 crore, MSME will also be allowed to compete, said Prasad.

Union Minister Ravi Shankar Prasad on Wednesday said that the government’s announcement of Rs 3 trillion will act as a strong booster for the micro, small and medium sector industries and it will directly impact nearly 45 lakh MSMEs. “Finance Minister Nirmala Sitharaman has outlined the first series of follow-up action as the Prime Minister indicated. What is important is 3 trillion of strong booster for MSME industries. This is going to directly impact nearly 45 lakh MSMEs saving their jobs, their business opportunity, making them more competitive,” said Prasad, news agency ANI reported.

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“More important in the contract for the government of India supply upto 200 crore, MSME will also be allowed to compete. Also good liquidity for non-banking financial sector, partial credit scheme, and the govt standing as a guarantee for MSME loans by the bank plus other tax incentives to the construction, other sectors. The first series is a wholesome package to the fulfillment of PM’s promise and surely lot of others are to follow,” the Union Minister said.”Corona is a pandemic but we are also to sure that India rises. And that’s what the initiative is about. I am sure there is great optimism hope and also a commitment to go forward,” he said.

Covid-19 relief package: FM announces Rs 1.7 trn plan for poor and migrants

Package announced includes both food security and cash transfer components

Finance Minister Nirmala Sitharaman today announced a relief package for the poor and migrants in the country in light of the 21-day lockdown in the country to tackle the challenge posed by the coronavirus (Covid-19) pandemic. The Prime Minister Gareeb Kalyan scheme worth Rs 1.7 trillion will have two parts — cash transfer and food security, said the Finance Minister. Covid-19 package to take care of the welfare concerns of the poor and migrant workers who have been suffering because of a nationwide lockdown

The FM also announced a medical insurance scheme for health workers. This Rs 50 lakh per individual insurance plan would be applicable to all health workers that includes sanitation and ASHA workers, paramedics, doctors, nurses. Two million health workers will benefit from this scheme, informed the minister.

The PM Gareeb Kalyan Scheme will have two components

1. The Pradhan Mantri Gareeb Kalyan Anna Yojana:

Under this plan, 800 million poor people in the country will get 5 kg of rice or wheat per month free of cost, in addition to the 5 kg they already get. In addition to rice or wheat, each household will get 1 kg of preferred dal for free for the next three months.

2. Cash transfer scheme:

• Farmers will get the first instalment of the PM-KISAN payment of Rs 2,000 soon. This move will benefit 87 million farmers across the country.
• MGNREGS: Wage increased from Rs 182 to Rs 202 per day. This wage increase will benefit 50 million families, as their income will increase by nearly Rs 2,000
• Poor widows, aged, and divyang: Ex-gratia transfer of Rs 1,000 for the next three months, in two instalments. 30 million people will benefit and the transfers will be done through direct benefits transfer (DBT)
• Women with Jan Dhan Yojana accounts: 200 million such account holders will benefit from Rs 500 ex-gratia for the next three months.

Coronavirus lockdown: Rs 60k-crore income support plan for poor in works

The scheme could mean transferring Rs 5,000-6,000 into the bank accounts of 80-100 million poor families, Business Standard has learnt

The Narendra Modi government is said to be considering an income support scheme for those worst hit by the slump in economic activity owing to the coronavirus pandemic and the resultant nationwide lockdown. The scheme could mean transferring Rs 5,000-6,000 into the bank accounts of 80-100 million poor families, Business Standard has learnt. A one-time transfer of Rs 6,000 each into 100 million accounts will cost the exchequer Rs 60,000 crore. However, given how dynamic the situation is, officials are not yet willing to give the monetary size of the package.

ALSO READ: Coronavirus LIVE: Over 3 bn in lockdown as global toll tops 20,000

There are also discussions on allowing a deferment of equated monthly instalments (EMIs) for targeted individuals, and loan repayments for micro, small and medium enterprises (MSMEs). But this will require providing some support to the banking system as well, sources said. These measures are likely to be part of a comprehensive economic package to fight the downturn in the country, which is currently locked down to contain the spread of coronavirus. The package can be announced any day now.

News agency Reuters reported that the size of the economic package could be anywhere between Rs 1.5 trillion and Rs 2.3 trillion. Any stimulus package will not only include the monetary component of an income support scheme, but also for MSMEs and others. As of Wednesday, COVID-19 had infected 440 ,321 people globally and over 606 in India.“Economic activity has come to a near halt. Work in factories, workshops, farms, the services sector, and other labour-intensive sectors has just stopped. The poorest families, especially those dependent on daily wages, will not be able to survive the lockdown,” said a person aware of the deliberations in the COVID-19 economic response task force.

No stressed asset of MSME to be declared NPA till Mar 31, 2020: Sitharaman

State-owned lenders will hold meetings with Non-Banking Financing Companies–or shadow banks–and new retail customers in 200 districts till September 29 to explore giving credit

State-owned banks will not declare stressed assets of MSMEs as non-performing assets (NPAs) till March 31, 2020, said Finance Minister Nirmala Sitharaman on Thursday, listing more measures to lift up the economy by ensuring credit. State-owned lenders will hold meetings with Non-Banking Financial Companies–or shadow banks–and new retail customers in 200 districts till September 29 to explore giving credit, she said at a press conference in Delhi.

Nirmala Sitharaman was speaking after holding a review meeting with public sector banks (PSBs) to discuss various issues, including follow up on transmission of monetary policy rates. The Reserve Bank of India (RBI) had earlier this month made it mandatory for banks to link all their fresh retail loans to an external benchmark effective October 1 and the central bank’s repo rate being one such benchmark. Following the move, banks such as Punjab National Bank and Allahabad Bank announced linking their retail loans with the RBI’s repo rate.

Sitharaman said the RBI had also issued a circular that provides for stressed loan accounts of micro, small and medium enterprises (MSMEs) not being declared non-performing assets (NPAs). She said banks have been asked to follow that circular…