Banks Are Catalyst For India’s Economic Revival Post Covid-19: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Wednesday said banks are going to be the catalyst for India's economic revival after the Covid-19 crisis.

"At this stage, the catalysts for economic revival, the catalysts who have the pulse of every one of their customers, are banks," the finance minister said. She was speaking after launching PSB Alliance-Doorstep Banking Services.

Her comment comes days after the RBI-appointed KV Kamath Committee set for banks the threshold for debt restructuring across 26 sectors of the Indian economy. The Reserve Bank of India has allowed a one-time restructuring of loans, amid the ongoing Covid-19 crisis that has hit businesses hard.

India's coronavirus lockdown, implemented to limit the spread of the pandemic, shut all but essential services for nearly two months. RBI effected a moratorium on loan repayments in March and extended the same till Aug. 31 to ease the financial strain on companies and individuals.

It's latest stress report, however, suggests that the Covid-19 crisis could push Indian banks’ gross bad loans to their highest in nearly two decades.