Unveiling several reforms to be brought to government-owned banks the Finance Minister (FM) Nirmala Sitharaman also spoke of the improving Non-Performing Assets (NPAs) situation in the economy.
The minister informed that the gross NPAs of Public Sector Banks (PSBs) were down by Rs 75,000 crore in March 19 from the December 2019 levels, marking an over Rs 1 lakh crore record recovery year-on-year.
Among other reforms to improve the functioning of the PSBs, the FM also announced that special ‘Chief Risk Officers’ will be appointed to the PSBs to further tide in the NPA issue.
The minister has also announced the merger of 10 Indian PSBs into four new entities with higher risk appetite to boost the liquidity in the economy and increase the credit outflow from banks.
Reformed & revitalised #PSBsFor5TrillionEconomy. Government effects Governance Reforms. Boards empowered, Board committees strengthened, non-official directors enabled to play effective role, leadership pipeline initiated. @PMOIndia @FinMinIndia @PIB_India pic.twitter.com/UumR7kFyXr— Rajeev kumar (@rajeevkumr) August 30, 2019
The ‘big bank’ reforms come as part of the government’s focus to kick-start the economy thorough measures to inject liquidity into the economy.
The reforms had been a long time coming as the late former Finance Minister Arun Jaitley having stressed on them earlier. “India needs fewer, mega banks which are strong, because in every sense, from borrowing rates to optimum utilisation, the economies of scale as far as banking sector are concerned are of great help,” he had said earlier in the year.