FM Sitharaman to review PSBs performance Sat amid financial crisis in West

Finance Minister Nirmala Sitharaman will chair a meeting with heads of all the state-owned banks on Saturday. The FM will review the work of the PSBs, including lending to infrastructure, rural areas, and flow of cash transfers to beneficiaries under various government flagship schemes.

Though the financial crisis in the West is not specifically on the agenda, officials expect the current global situation to also be discussed at the meeting.

“The meeting is a regularly scheduled review of the PSBs’ performance. However, since it comes in the backdrop of events in the United States and Europe, those issues are also likely to be discussed,” a senior official told ‘Business Standard’.

The impact of the current global financial crisis is not expected to be that severe for Indian banks as their books have been cleaned up and strengthened over the past several years.

“Given that India had just emerged out of its own financial system issues in the last decade, I expect the impact on India to be low or negligible,” Chief Economic Advisor V Anantha Nageswaran told ‘Business Standard’ on Monday.

On that same day, the Finance Ministry informed Lok Sabha that gross NPA ratio for state-owned banks had declined from the peak of 14.6 per cent in March 2018 to 5.53 per cent in December 2022.

As fears of a global financial contagion spread after the failures of Silicon Valley Bank and Signature Bank in US, the Swiss government brokered a deal over the past weekend for UBS Group, Switzerland’s largest bank, to acquire the crisis-hit Credit Suisse Group AG.

Finance Bill reply on Friday

Sitharaman will seek to reply to the Finance Bill 2023 in Lok Sabha on Friday, and the government hopes to pass the bill in the lower house on the same day.

“The Minister will aim to reply. However, given the din in the house and the frequent adjustments, it remains to be seen till what extent a debate on the Bill can be had,” said the official quoted above.

The second half of the Budget Session has been disrupted frequently. While the opposition demands a Joint Parliamentary Committee probe on the Adani-Hindenburg issue, the BJP has demanded an apology from Congress MP Gandhi over his democracy remarks made in the United Kingdom earlier this month.