Indian government to make loans easier and cheaper with a ₹70,000 crore gift to banks

• The Indian government will release as much as ₹70,000 crore upfront to ease the ongoing credit crisis in the country.
  
• Finance Minister Nirmala Sitharaman said that banks will be able to raise an additional ₹5 lakh crore to re-captalise banks.
  
• She hopes that as public sector banks are provided with liquidity they will be able to capitalize non-banking financial companies (NBFCs).
  

The Indian government will release as much as ₹70,000 crore upfront to public sector banks to ease the ongoing credit crisis in the country.

In a press conference today, Finance Minister Nirmala Sitharaman said that banks will also be able to raise an additional ₹5 lakh crore which will help re-captalise banks which are stressed with non-performing assets.

Banks have agreed to ease the high interest rates of the country. They have agreed to pass on the advantage of the four base rate cuts by the Reserve Bank of India (RBI); to customers.

“I am grateful that banks have agreed to pass on rate cut benefits. It will help reduce EMIs for housing, retail and other loans. They will also come with external benchmark linked products which will also ease working capital loans for companies,” Sitharaman said.

She hopes that as public sector banks are provided with liquidity they will be able to capitalize non-banking financial companies (NBFCs). That will trickle down to help loan seekers as NBFCs have extensive reach which can increase credit growth in the country.

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