By: Arun Jaitley.( Express file photo/Renuka Puri) Financing Minister Arun Jaitley on Saturday said the credit development in the banking system has started enhancing gradually and the capital infusion in the general public sector banks will make it possible for banks to broaden financing going forward. Jaitley added that the “green shoots” in the economy are now noticeable after a series of structural reforms.
“The last few data that has come out has shown credit growth has gone up and when this infusion of capital happens into the banking system, credit growth will even more go up,” Jaitley said at an occasion on the event of 75th structure day of state-owned UCO Bank.He stated India was the only country to have the nerve to execute structural reforms, which created a momentary challenge however will help the economy in medium and long run.Structural moves such as demonetisation, followed by present of the Goods and Services Tax, resulted in Indian economy losing its growth momentum. The very first advance quotes of the Gdp released on Friday pegged development at 6.5 per cent in 2017-18. Department of Financial Solutions Secretary Rajeev Kumar
said earlier in the day on Saturday that credit growth has actually picked up in December.” Continual momentum post PSB wrap-up decision– Banking sector posts double digit(10.7%Y-o-Y) growth in Dec’17, up from( 7.2%Y-o-Y)in Oct ’17,” Kumar stated in a tweet. As on December 22, the exceptional bank credit grew to Rs 80.96 lakh crore– up 10.7 per cent year on year as compared with development of 4.7 percent throughout exact same duration in the previous financial year, based on the RBI data.Jaitley said the capital infusion will help sustain economic development however these funds have to be used sensibly.
“The taxpayers of India are all making a sacrifice to keep you(banks) in good health, so this cash which is being instilled is cash which might have been utilized for other social purposes,”he said.The government today announced that it will inject Rs 80,000 crore of capital in PSU banks through issuance of recapitalisation bonds by March-end 2018.
The government last October announced a strategy to infuse Rs 2.11 lakh crore of in the public sector banks over a duration of 2 years. From this, Rs 1.35 lakh crore will be through the recapitalisation bonds, while remaining Rs 76,000 crore will be from raised by banks market and offered by the federal government through budgetary support.The quantity of capital infusion will be higher than the Rs 79,700 crore offered by the government in the 8 year duration in between 2007-08 till 2014-15.
Capital infusion became important as the banks dealt with a mountain of non-performing properties( NPAs), needing resolution through haircuts. State-owned banks NPAs have increased to Rs 7.33 lakh crore as of June 2017, from Rs 2.75 lakh crore in March 2015. For all the current Company News, download Indian ExpressApp Tags: