New Delhi, Aug 23 : The Central government will "upfront" infuse Rs 70,000 crore into public sector banks for extending additional lending.
At present, the economy has been impacted by a consumption slowdown which is a culmination of several factors such as high GST rates, farm distress, stagnant wages and liquidity constraints.
Besides, the stress in the NBFCs has led to a liquidity squeeze in the automobile and other type of capital goods purchases.
Finance Minister Nirmala Sitharaman said that the budgeted Rs 70,000 crore re-capitalisation of PSBs will be infused upfront so as to enable additional funding. This step is expected to allow PSBs to extend additional funding of Rs 5 lakh crore.
She further announced that PSBs have decided to launch repo-rate linked products.
PSBs have been mandated to return loan documents to customers within 15 days of their loan closure.