Union Finance Minister Nirmala Sitharaman on Thursday said that the government was in talks with the Reserve Bank of India (RBI) for a one-time restructuring of loans to help companies which are under stressed due to the Covid-19 pandemic. She said that the government was also in talks with the RBI and other banks to ascertain why the reduction in interest rates was not being passed on to customers.

Addressing a webinar on MSMEs organised by Chennai International Centre (CIC), Sitharaman said that there was intense engagement with the RBI on the one time restructuring.

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“We are definitely talking to them (RBI) if the one time restructuring can be offered so that every one comes out of this…,” she said, considering that the characterisation of companies as stressed and NPAs “have all added a lot of stress, in this time of pandemic. That is actually costing a lot of pain and stress”

Responding to the complaints that private banks were not providing support under the emergency credit facility scheme, she said that she would have agreed to the comment ten days back, but now the private banks were coming on board. She added that while the PSBs had cumulatively disbursed around Rs 22,197 crore, the private sector disbursed Rs 10,697 crore. “But then, private sector banks have to buck up a bit more,” commented Sitharaman.

The government will consider extending the Rs 3 trillion in emergency line of credit to include individual proprietors. The industry’s suggestion on providing collateral-free credit based on outstanding GST bills as a security, will be discussed internally in the ministry before taking a call on it.

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Sitharamn told the industry that introspection was needed on how businesses are run in India and on Aatmanirbhar Bharat, for India to realise the full potential. Taking manufacturing of Active Pharmaceutical Ingredients in India as an example, she said that

India had a big captive market and there was a need to produce more within the country. “There should be introspection on increasing production in upstream and downstream products,” she added.

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