Finance Minister Nirmala Sitharaman said that the service sector has shown "a high appetite" for credit.
Finance Minister Nirmala Sitharaman said on Thursday that private sector banks and non-banking financial companies (NBFCs) are not facing liquidity-related problems.
"Sum and substance of what I heard was that there is no liquidity crisis," Nirmala Sitharaman said at a press conference after meeting representatives of private sector banks and other financial institutions.
Talks between the Finance Ministry and the banking industry on a range of issues such as liquidity and credit disbursal come within a month of the government announcing a slew of measures to revive the economy.
Here are 10 things to know:"If there was a problem of liquidity, it was in the wholesale financing, and not in the retail," the Finance Minister said.Ms Sitharaman said banks have been invited to participate in the credit outreach programme spanning 400 districts, a week after thegovernmentannounced that public meetings between banks and borrowers will be held in two tranches."Many of the microfinance institutions and microfinance units which have come here are in deep country they said that in those areas, there is still demand and they are extending loans.
All of them clearly voiced a positive growth which is a good encouraging story," the Finance Minister said."The message I got is that consumption is happening," she said, describing the discussionsas "a very tonic-like meeting".She also said that the service sector has shown "a high appetite" for credit.Speaking on the automobile sector, Ms Sitharaman said that the slowdown in passenger vehicle sales is driven by sentiments and would improve in near future.She said the commercial vehicle demand is a cyclical problem, and thesales in the segmentare likely to pick up over the next 1-2 quarters.Falling for a 10th month in a row, passenger vehicle sales plunged 31.57 per cent year-on-year in August, according to data from industry body SIAM.
That marked the steepest fall in passenger vehicle and car sales ever.All financial institutions are largely optimistic and hoping that the upcoming festive season would boost consumption and demand, the Finance Minister added.India's GDP or gross domestic product expanded 5 per cent in the quarter ended June, marking the lowest pace of growth in more than six years.Since August 23, the government has announced measures such as withdrawal of higher taxes on foreign investors, a mega bank consolidation plan and a reduction in corporate taxes to revive consumption and kick-start growth.Get Breaking news, live coverage, and Latest News from India and around the world on TheIndianSubcontinent.com.
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