Finance Minister Nirmala Sitharaman reviewed the performance of banks on Monday in New Delhi in a meeting with the top management of Public Sector Banks, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and Citi Bank. RBI Deputy Governor N. S. Vishwanathan also participated in the review.

Today’s meeting is the first of a series of meetings that the Ministry of Finance is convening to discuss current economic issues with key stakeholders, including some of the industry sectors whose growth has been affected in recent months. Today’s meeting was on the banking sector.

This will be followed by meetings with the MSME sector, the automobile sector, industry associations, financial market stakeholders, and real estate and home-buyers in coming days.

The Government will factor in the takeaways from these consultations for appropriate policy responses to maintain a high growth trajectory and to address sector-specific issues.

It was noted in the review that bank credit to the NBFC and HFC sector has risen by nearly Rs. 90,000 crore since September 2018, helping address the sector’s liquidity needs.

In addition, pool buy-outs of over Rs. 40,000 crore by Public Sector Banks have helped the NBFC and HFC sector reduce their asset liability mismatch.

In the review, banks committed to continue supporting the sector by making prudent use of partial credit guarantee from the Government for purchase of pooled assets of NBFCs and HFCs of up to Rs. 1 lakh crore.

The automobile sector has witnessed falling sales. Sales in this sector have been driven by vehicle loans, in which NBFCs had a major share. In view of the decline in NBFC credit for vehicle finance, banks have committed to step up credit support for vehicle purchases.

As a result of Government’s thrust on digitalization, digital transactions have grown to 769% of GDP by March 2019, up from 726% a year ago.

The recent amendments mandating that business establishments with over Rs. 50 crore turnover accept digital payments and waiver of charges on NEFT and RTGS will give a fillip to further digitalisation.