Top officials of the Reserve Bank of India , including its Governor Shaktikanta Das, and Deputy Governors, met the chief executives of public and private sector banks on Saturday to review the current economic situation and took feedback on the credit flow and liquidity situation.
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The central bank also discussed the issue of loan moratorium in the meeting. The issue assumed significance in the light of the recent Supreme Court ruling that banks need to follow the
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There was a lot of customer complaints that banks and other lending institutions were not extending the loan moratorium benefit, particularly to non-banking finance companies.
Credit flows to different sectors of the economy, including liquidity to NBFCs, micro finance institutions, housing finance companies and mutual funds, were discussed in the meeting, the RBI said. Some of the mutual funds also faced redemption pressure due to which RBI had opened a window specifically for these entities which can be accessed by banks to tap liquidity to lend to mutual funds. However, there was not much appetite from banks to tap the liquidity window.
In his opening remarks, Mr. Das appreciated the efforts of banks in ensuring normal to near normal operations during the lockdown period, the RBI said. The interaction was held in two separate sessions through video conferencing.
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Post-lockdown credit flows, including provision of working capital, with special focus on credit flows to MSMEs, were also discussed. The government has provided significant relaxation for starting economic activities in the third phase of the lockdown that starts from Monday.
Some other issues that came up during the interaction was monitoring of overseas branches of banks in view of the slowdown in economies across the globe, and stability of the financial sector.