Public Sector Banks (PSBs) reforms
7-Jan-2022: Bankers say PSBs adequately capitalised and prepared for any stress scenarios in future
Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman reviewed the performance of Public Sector Banks (PSBs) with their Chairmen & Managing Directors (CMDs/MDs) via virtual mode in New Delhi today. The review meeting was also attended by Union Minister of State for Finance Dr Bhagwat Kisanrao Karad and Secretary, Department of Financial Services (DFS), Shri Debasish Panda, along with senior officials of the DFS.
During the review meeting, Smt. Sitharaman assessed various steps taken by PSBs in implementing pandemic-related measures initiated by Government of India and Reserve Bank of India (RBI) and readiness to tackle possible future disruptions that may occur due to the ongoing variant of the COVID-19 pandemic.
While appreciating the success of ECLGS, the Finance Minister said that it is not time yet to rest on our achievements and that our collective efforts must strive towards supporting sectors that face interruption due to continued onslaught of COVID-19 pandemic. Smt. Sitharaman also conveyed to the bankers to continue supporting agriculture sector, farmers, retail sector and MSMEs.
Smt. Sitharaman noted that business outlook is progressively improving in spite of the headwinds from global development and Omicron spread. The Finance Minister underlined that contact intensive sectors may require more support to help them fight against the pandemic.
On the credit demand front, the Finance Minister said that credit demand is expected to pick up on account of growth in retails segments, improvement in overall macroeconomic prospects and improving financial health of borrowers.
During the review meeting, bankers pointed out that PSBs have observed an improvement in the repayment culture in the country.
PSBs have performed well and, supported by various policy measures, provided the required impetus to the economy for coming out of shackles of pandemic induced stress.
Performance of Public Sector Banks (PSBs) —
- PSBs recorded net profit of Rs 31,820 crore in FY 2020-21, highest in last 5 financial years.
- Net profit of Rs 31,145 crore for the first half of FY2021-22, almost equal to that of FY 2020-21.
- PSBs have effected a recovery of Rs 5,49,327 crore during the last 7 financial years.
- PSBs are adequately capitalised and CRAR of PSBs as on September 2021 is 14.4%, against regulatory requirement is 11.5% (including CCB).
- CET1 of PSBs was at 10.79% as on September 2021 against regulatory requirement is 8%.
- PSBs recorded year-on-year credit growth of 11.3% in personal loans, 8.3% in agriculture loans and overall credit growth of 3.5%, as on September 2021.
- Under Credit Outreach Programme launched in October 2021, PSBS have sanctioned an aggregate loan amount of Rs. 61,268 crore.
- During the COVID-19 pandemic, PSBs have performed well in various Government schemes like ECLGS (launched in May 2020 to provide relief particularly to the MSME sector amidst the COVID-19 pandemic), LGSCAS and PM SVANidhi.
- Of the extended limit of Rs. 4.5 lakh crore of ECLGS provided by the Government, 64.4% or Rs 2.9 lakh crore, sanctioned upto Nov. 2021. Over 13.5 lakh small units survived pandemic due to ECLGS, saved MSME loans worth Rs 1.8 lakh crore from slipping into non-performing assets, and saved livelihood for approx. 6 crore families.
In their assessment of overall situation, bankers were confident that PSBs are adequately capitalised and banks are prepared for any stress scenarios in future.
The Finance Minister also thanked the bankers for extraordinarily supporting the country from the start of the COVID-19 pandemic. She attributed the success of ECLGS to the collective efforts of the banking community. Smt. Sitharaman appealed to the banking community to observe COVID-19 appropriate behaviour for the safety of their staff & families and ensure that everyone is vaccinated.
In his address to the bankers, Union Minister of State Dr Bhagwat Karad said that PSBs are the power engines of our economy and congratulated the bankers for their performance during the pandemic times. Dr Karad said that moving with the times, banking has become more open and customer centric.
Earlier at the start of review meeting, SBI Chairperson gave an in-depth presentation on pre-pandemic and current scenario of banking business to the Finance Minister. Later, CMDs/MDs of various PSBs also shared their views on the overall assessment of the banking business and gave various suggestions for overall growth of business.
European Investment Bank(EIB)
23-Dec-2021: Government of India & European Investment Bank sign finance contract for first tranche loan of Euro 250 million for Agra Metro Rail project
The Government of India (GoI) and European Investment Bank (EIB) yesterday signed a Finance Contract for first tranche loan of Euro 250 million for Agra Metro Rail Project. Mr. Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of Government of India and Mr. Edvardas Bumsteinas jointly with Mr. Roger Stuart, Head of Divisions on behalf of European Investment Bank (EIB) signed the loan document in New Delhi and in Brussels respectively.
Hon’ble Prime Minister Shri Narendra Modi had inaugurated construction work of Agra Metro project in Agra, Uttar Pradesh, last year through video conference.
EIB had approved a total loan of Euro 450 million to fund the Agra Metro Rail Project. The project aims to provide safe, reliable, affordable and environment friendly public Mass Rapid Transit System for Agra city which will improve mobility and support endeavour for planned urban development in Agra. The financing from EIB will help to fund construction of 29.4 km metro corridor comprises of Corridor-1 from Sikandara to Taj East Gate (14 km) and Corridor-2 from Agra Cantt to Kalindi Vihar (15.4 km) in the Agra City. Further, the project will enhance economic productivity of the city and catalyse job creation.
Ministry of Housing and Urban Affairs is the Government of India’s line ministry for this Project and Uttar Pradesh Metro Rail Corporation Ltd. (UPMRCL) is the implementing agency.
7-May-2021: Government of India and European Investment Bank sign finance contract for second tranche of Euro 150 million for Pune Metro Rail project
The Government of India (GoI) and European Investment Bank (EIB) here today signed the finance contract for second tranche of Euro 150 million for Pune Metro Rail project through a virtual signing ceremony. The signing ceremony was held in the presence of H.E. Mr. Francisco Andre, Secretary of State for Foreign Affairs and Cooperation, Portugal and H.E. Mr. Werner Hoyer, President EIB. Shri K. Rajaraman, Additional Secretary, Department of Economic Affairs, Ministry of Finance, signed the loan on behalf of Government of India and Mr. Christian Kettel Thomsen, Vice-President, signed the loan on behalf of EIB.
EIB had approved the total loan of Euro 600 million to fund the Pune Metro Rail project. The Finance Contract for first tranche of Euro 200 million was signed between GoI and EIB on 22.7.2019. The project aims to provide efficient, safe, economic and pollution-free Mass Rapid Transit System in densely populated area in the city of Pune served with heterogeneous traffic options.
The financing from EIB will help to fund construction and operation of Corridor 1 (North-South) - Pimpri Chinchwad Municipal Corporation (PCMC) to Swargate and Corridor 2 (West-East) –Vanaz (Kothrud) to Ramvadi, totaling about 31.25 kilometers (km) and related purchase of a related fleet of metro cars. Further, the project will serve large population which consisting working class in providing urban mobility for their livelihood. The Maharashtra Metro Rail Corporation Ltd. (MAHAMETRO) is the implementing agency for this project.
BHIM
15-Dec-2021: Cabinet approves an incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M)
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today has approved an incentive scheme to promote RuPay Debit cards and low-value [upto Rs. 2,000) BHIM-UPI transactions (Person-to-Merchant (P2M)] in the country.
Under the scheme, the acquiring banks will be incentivised by the Government, by way of paying percentage of value of transactions (P2M) done through RuPay Debit cards and low-value BHIM-UPI modes of payments, at an estimated financial outlay of Rs.1,300 crore for a period of one year w.e.f. April 01, 2021.
This scheme will facilitate acquiring Banks in building robust digital payment ecosystem and promoting RuPay Debit card and BHIM-UPI digital transactions, across all sectors and segments of the population and further deepening of digital payments in the country.
It will also help in making accessible digital modes of payments to unbanked and marginalized populations, who are outside of the formal banking and financial system.
India today is one of the most efficient payments markets in the world. These developments have been the outcome of the initiatives of the initiatives of the Government of India and innovation by various players in the digital payment ecosystem. The scheme will further spur research and development and innovation in fintech space, and will help the Government in further deepening of digital payments in various part of countries.
Background: The scheme has been formulated in compliance with the Budget announcements (FY 2021-22) by the Government to give further boost to digital transactions in the country.
13-Jul-2021: Finance Minister Smt Nirmala Sitharaman and Finance Minister of Bhutan Mr. Lyonpo Namgay Tshering jointly launch BHIM–UPI in Bhutan
Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman, along with her counterpart, the Hon’ble Finance Minister of Bhutan, Mr. Lyonpo Namgay Tshering, jointly launched BHIM–UPI in Bhutan today afternoon in a virtual ceremony. The function was also attended by the Minister of State (Finance) Dr. Bhagwat Kishanrao Karad, the Governor of the Royal Monetary Authority of Bhutan Mr. Dasho Penjore, Secretary, Department of Financial Services, Shri Debasish Panda, the Ambassador of India to Bhutan, Ms. Ruchira Kamboj, the Ambassador of Bhutan to India General V. Namgyel, and the MD & CEO of NPCI Shri Dilip Asbe.
While speaking on the occasion, Smt. Sitharaman said that the services have started in Bhutan under India's neighbourhood first policy and India is proud of our achievement and feel pleasure in sharing it with our valued neighbour. The Finance Minister said that BHIM UPI is one of the brightest spot and an achievement for digital transactions in India during the time of COVID-19 pandemic with more than 100 million UPI QRs have been created in last 5 years and BHIM UPI in 2020-21 has processed 22 billion transactions worth value Rs 41 lakh crore.
The Finance Minister of Bhutan, Mr. Lyonpo Namgay Tshering, thanked and appreciated the Government of India for the launch of BHIM-UPI services in Bhutan and added that the bond between the two countries has become stronger each passing day.
India and Bhutan have already enabled inter-operability in acceptance of RuPay cards in each other’s countries in two phases – acceptance of RuPay cards issued in India at Bhutan based terminals in the first phase, and vice versa in the second phase.
With today’s launch of BHIM-UPI in Bhutan, the payment infrastructures of the two countries are seamlessly connected and will benefit a large number of tourists and businessmen from India who travel to Bhutan each year. This will enhance the ease of living and ease of travelling through cashless transactions at the touch of a button.
As a part of the launch, Smt. Nirmala Sitharaman also made a Live transaction using BHIM-UPI to purchase an organic product from a Bhutanese OGOP outlet, which sells fresh farm produce made organically by local communities in Bhutan.
Bhutan is the first country to adopt UPI standards for its QR deployment, and the first country in our immediate neighbourhood to accept mobile based payments through the BHIM App.
13-Nov-2019: BHIM UPI goes global
As a first step towards internationalisation, a pilot demo of BHIM UPI QR-based payments began in Singapore with a live transaction at a merchant terminal at the FinTech Festival 2019.
High Commissioner of India to Singapore Jawed Ashraf demonstrated the first transaction under the pilot run, which will continue during the Singapore FinTech Festival 2019 that is being held between November 11 and 15.
This QR code-based system would allow anyone with a BHIM app to scan the Singapore Quick Response Code (SGQR) at NETS terminals in Singapore for payments. This is the first time that BHIM app has gone international.
The project is being jointly developed by the National Payments Corporation of India (NPCI) and the Network for Electronic Transfers (NETS) of Singapore. It is targeted to go fully live by February 2020 and cover thousands of terminals in Singapore, after the Reserve Bank of India's approval.
By February 2020, it is also expected that all RuPay cards, including domestic ones, will be acceptable in Singapore.
21-Oct-2019: Govt launches BHIM 2.0 with new functionalities, additional language support
The IT Ministry unveiled a slew of new initiatives and programmes, including BHIM 2.0 that packs-in new functionalities, supports additional languages and has increased transaction limits.
BHIM app, a UPI based payment interface developed by National Payments Corporation of India (NPCI) that allows real time fund transfer, was launched in December, 2016.
In order to make BHIM app more feature-rich and effective it has been enhanced with a bunch of new functionalities. Some of the striking features marking BHIM 2.0 include a 'Donation' gateway, increased transaction limits for high value transactions, linking multiple bank accounts, offers from merchants, option of applying in IPO, gifting money.
The new version of BHIM also supports three additional languages -- Konkani, Bhojpuri and Haryanvi -- over and above the existing 13.