MSME Debt Restructuring Only After Examining Viability, Says Das
Shaktikanta Das On Farm Loan Waivers
States have to decide if they have the fiscal space for farm loan waivers. Any generalised write-off obviously has adverse impact on credit culture and future credit behaviour of borrowers.Shaktikanta Das, Governor, Reserve Bank Of India
Das’s comments come amid the Narendra Modi’s efforts to alleviate farm distress in the country.
In the past month alone, three Indian states — Assam, Chhattisgarh and Madhya Pradesh — have announced schemes to waive farm loan. They join a growing list of state governments which have resorted to such waivers in the past two years.
No Decision On Interim Dividend Payment
The central bank has not taken a decision on the interim dividend payment yet, Das said.
While a lot of discussions taken place between the RBI and the government, no specific communication has taken place regarding this, he added.
Reuters, in a report today, said that the RBI is likely to transfer an interim dividend of Rs 30,000-40,000 crore to the government by March, citing sources.
In August, the RBI had said that it would transfer Rs 50,000 crore as surplus to the government in its financial year ended June 30. RBI follows the July-June cycle as its financial year.
Economic Affairs Secretary Subhash Chandra Garg told reporters in August itself that the RBI had transferred Rs 10,000 crore as interim dividend in March, and the government will receive the remaining amount this fiscal.
Bank's NPAs Remain A Focus
The health of India’s banks and managing their non performing assets remains the main focus for the central bank, Das said.
“The NPAs are being monitored on a daily basis,” he said, adding that improvement has been noticed in bad loan levels.
The RBI is also in consultation with stakeholders to create a governance framework of public sector banks without putting impediments in the working of banks, he said.
More Meetings Lined Up
Das is slated to meet representatives from the non banking financial companies industry tomorrow, to take a stock of the liquidity crunch plaguing the sector after infrastructure sector lender IL&FS started defaulting on its payments.
“The liquidity has been assessed time and again”, he said, adding that the RBI has already announced OMOs worth Rs 60,000 crore.
Any Infusion of liquidity has to need based so that it does lead to excess liquidity.Shaktikanta Das, Governor, Reserve Bank Of India
Have Noted MSME Demands, Das Says
Shaktikanta Das met associations of the small and medium enterprises sector today to get their point of view on the restructuring announced, the governor said today.
Here are the key highlights:
- Have noted demands made by MSMEs
- Banks have been asked to look into viability of individual MSMEs
- Banks have been asked to take it to their boards whether it's viable to restructure MSME loans