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Published On: Thu, Sep 26th, 2019

Have not heard of liquidity crisis as problem: FM Sitharaman

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1-581NEW DELHI : Union Finance Minister Nirmala Sitharaman on Thursday met the representatives of private sector banks, non-banking financial companies (NBFCs) and Housing finance companies and said that during the meeting no one said that liquidity is a problem for them.
Finance Minister Nirmala Sitharaman said  that there are no liquidity-related problems being faced by private sector banks and non-banking financial companies (NBFCs). “Sum and substance of what I heard was that there is no liquidity crisis,” the Finance Minister said at a press conference after a meeting with representatives of banks, non-banking financial companies (NBFCs) and housing finance companies.
Her meeting with the banking industry comes within a month of the government announcing a slew of measures to revive the economy, which is struggling against a six-year low growth rate and lakhs of job losses.”If there was a problem of liquidity, it was in the wholesale financing, and not in the retail,” Ms Sitharaman said.

Issues such as liquidity, rate cut and credit disbursal were on the top agenda of discussions between the Finance Minister and the lenders, an official statement said. Ms Sitharaman also said banks have been invited to participate in the credit outreach programme spanning 400 districts. The government had said last week that the public meetings between banks and borrowers will be held in two tranches.
“She also said that the service sector has shown “a high appetite” for credit.Speaking on the automobile sector, Ms Sitharaman said that the low commercial vehicle demand is a cyclical problem. The slump in commercial vehicle sales is likely to pick up in next one-two quarters, she added.
She said that the slowdown in passenger vehicle sales is driven by “sentiments” and would improve in near future. Passenger vehicle sales plunged 31.57 per cent year-on-year to 196,524 units in August, falling for the 10th straight month, data from industry body SIAM showed this month. That marked the steepest fall in passenger vehicle and car sales ever.
Sharing details of her meeting with private sector bank officials and financial institutions, she said, “I have not heard liquidity as a problem from anybody here today.”Sitharaman added that there is a steady demand for loans and many micro-finance companies located in densely populated rural areas have not raised any concern over giving out loans to people.
“The service sector is showing a very high appetite for credit. There is an immense possibility to reach out to them provided, of course, there are some simpler tweaking that we can do using their salaries and cash they earn also as a part can be used for their credit assessment,” she said.(With Inputs from agencies).

 

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