PSU banks kick off nationwide exercise to boost credit demand across sectors

  1. Public sector banks(PSBs) has held a consultative process with their branch heads across the country to identify the issues and challenges faced by branches.
  2. This exercise was undertaken as part of a bottom-up approach to shape policies so that PSBs can act as a catalyst in making India a $5-trillion economy.
  3. The consultative process has been divided into three stages with the first being at the branch or regional level followed by the state level.It will culminate with a national-level two-day brainstorming in Delhi.
  4. The consultation covers eight thematic papers on issues such as digital payments, corporate governance in PSBs, MSME credit, technology usage and retail lending. 
  5. This consultation comes in the backdrop of PSBs ceding market share to their private sector bank counterparts over the last few years.
  6. This exercise also comes at a time when credit demand remains subdued and banks have been facing the charge of not passing on the full extent of the easing of the policy rates. 
  7. The RBI had cut the repo rate by 75 basis points between February and June but banks have reduced their interest rates on fresh rupee loans by only 29 basis points.