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RBI guv tells private banks to continue strengthening balance sheets – Mint

Reserve Bank of India (RBI) governor Shaktikanta Das on Tuesday urged heads of some private sector banks to continue strengthening their balance sheets proactively.

This comes barely a week after he met heads of state-owned banks and, going by statements issued on Tuesday and on 19 May, discussed near-identical issues.

Das met chief executives of select private sector banks through video conference on Tuesday. The meeting was also attended by deputy governors M. K. Jain, M. Rajeshwar Rao, Michael D. Patra and T. Rabi Sankar, the central bank said.

“In his opening remarks, the governor recognized the crucial role played by the private sector banks as important stakeholders in the Indian banking sector,” the statement said.

Other issues discussed were, an assessment of current the economic situation and the state of the banking sector; credit flows to different segments of the economy, particularly to small borrowers; progress in the implementation of covid resolution framework 1.0; monetary policy transmission and liquidity scenario and implementation of various covid-19 policy measures taken by RBI.

“He impressed upon the banks to quickly and swiftly implement the measures announced by RBI on 5 May in right earnest. He also advised the banks to ensure continuity in provision of various financial services including credit facilities to individuals and businesses in the face of challenges brought on by the pandemic,” the central bank said.

On 5 May, RBI announced a series of liquidity measures to help banks support the healthcare infrastructure and small borrowers impacted by second covid wave. Das had said the central bank will make available an on-tap liquidity window of 50,000 crore to support healthcare infrastructure and a special three-year special long-term repo operation (SLTRO) of 10,000 crore for small finance banks (SFBs).

Stepping in to rescue small business borrowers with loans of up to 25 crore, RBI also allowed lenders to restructure their debt.

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