Home Business Finance ministry assures bank customers to safeguard their deposits at all costs

Finance ministry assures bank customers to safeguard their deposits at all costs

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(G.N.S) Dt. 24

New Delhi

The finance ministry said it will not let any public bank to fail, assuring customers that their deposits will be safeguarded at all costs.

After announcing a Rs 2.11 lakh crore recapitalisation plan this year, the Finance Minister on Thursday spelt out a banking road map to improve the functioning of public sector banks.

The new set of guidelines, the finance ministry said, will stress on rigorous due diligence, post-sanction follow-up on loans and separate asset management verticals to ensure public savings are untouched. As part of the plan, the Centre will infuse Rs 88,139 crore — of which Rs 8,139 crore is through budgetary allocation — into the banks by issuing recapitalisation bonds this financial year. IDBI Bank will corner most of this money at Rs 10,610 crore.

This will be part of the recap boost for the lenders struggling with bad loans.

The finance ministry said it will not let any public bank to fail, assuring customers that their deposits will be safeguarded at all costs.

Here’s a 10-point guide to the road map the government has planned for public sector banks

– Banks to reorient themselves to support MSME growth

– Recapitalisation will depend on the basis of the performance of the banks.

– Banks should not get into all activities, must concentrate on core strengths. Each bank to adopt a policy in accordance with their core strengths.

– PSU banks need to identify non-core assets to monetise

– Banks to minimise their exposure to big corporate loans to 10 per cent in a consortium borrower and all loans above Rs 250 cr will undergo special monitoring.

– Banks to be given capital based on customer responsiveness, responsible banking, credit offtake through technology and cleanliness, MSME friendliness, financial inclusion and digitisation deepening.

– Customers money is safe in banks. They will get their money back if bank is found indulging in fradulent activities

– Every PSB to promote apps for easy opening of accounts, doorstep banking

– A survey will be conducted by a reputed agency annually which will reveal their performance

– Breach of any loan covenant will be shared with entire lending consortium as a red flag

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