Claiming that banks have not been given any retail lending targets, banking secretary Rajiv Takru said on Saturday, “Banks are completely free to decide what sectors they want to lend in. The government has said only one thing that we are providing some additional liquidity to you depending on your performance, but the sole aim of the whole thing is that you should be lending.”
The government had recently announced its annual recapitalisation plan where it plans to infuse a total of R14,000 crore across 20 public sector lenders.
Banks had said they received feelers from the Centre with respect to announcing some reduction in lending rates for retail customers. Over the last few weeks, most state-owned banks have announced some interest rate cuts on vehicle loans, besides reduced processing fees for home loans as part of their festival loan scheme.
Meanwhile, Takru categorically ruled out accessing World Bank funds to recapitalise state-run banks, saying enough money has been already budgeted for this purpose. “We have already given banks R14,000 crore and will give more. We don’t want any money from the World Bank,” he told reporters on the sidelines of a Ficci event in Mumbai. “For the moment this is good enough to see them through,” he said.