Prime Minister is likely to meet chief executives of Indian banks to chalk out a strategy for the banking sector for the next five years.
The meeting assumes significance as the country’s GDP growth slowed to 5.8% in the January-March 2019 quarter dragging down the full-year growth to a 5-year low of 6.8%.
Further, the NBFC sector has also slowed down due to which credit flow to productive sectors of the economy has been impacted.
Recently,the finance ministry has also held discussions with banks on the ongoing crisis in non-banking financial sectors as NBFCs are facing liquidity crunch following the debt default by IL&FS.
IL&FS is an infrastructure finance company registered with the Reserve Bank of India as a ‘Systemically Important Non-Deposit Accepting Core Investment Company’.IL&FS has run out of money and therefore was unable to service its repayment obligations which led to a series of defaults on loans,debentures and commercial papers.
Further,the government had recently seen the merger of Dena Bank and Vijaya Bank with Bank of Baroda and also the merger of associate banks of State Bank of India.
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