New Delhi, August 30: Union Finance Minister Nirmala Sitharaman on Friday announced bank recap plan after meeting PSU banks chiefs amid consolidation buzz. She stated that eight public sector banks have launched repo-linked home, vehicle, mortgage, cash credit loans to help boost the Indian economy. She also informed that four non-banking financial company (NBFC)-bank tie-ups are already in place, and more in the pipeline. Nirmala Sitharaman Announces Measures to Boost Indian Economy Amid Slowdown, Rolls Back Surcharge on FPIs, Removes Angel Tax on Start-Ups; Check Full List of Announcements

Among the major announcements she made during the press conference, the Union Finance Minister stated that to improve the liquidity crunch in India major reforms like cash flows are now ring-fenced in banking, while business plans have been implemented for balanced asset mix. She also mentioned that sanctioning and monitoring of big loans had been strictly prohibited and for this, quality of Tier-1 capital has been enhanced.

Apart from this, Sitharaman announced that the gross non-performing loans have come down from Rs 8.65 lakh crore to Rs 7.90 lakh crore, while record loan recoveries at Rs 1,21,076 crore has been reached. However, she made it clear 14 out of 18 public sector banks are in profit-earning condition, and the government is looking forward to easing the financial crisis in India.

Stating the government intention of not just to giving capital but also provide good governance, Sitharaman announced the merger of 10 banks in four sections. The first merger of is between Punjab National Bank, Oriental Bank of Commerce and United Bank. Second being for Canara Bank and Syndicate Bank, third for Union Bank of India, Andhra Bank and Corporation Bank and fourth for Indian Bank and Allahabad Bank. SBI Alone Can Fund More Than Rs 1 Lakh Crore in 1 Month, Says Chairman Rajnish Kumar Amid Reports of 'Liquidity Crisis'

Announcing the bank recap plan after meeting the PSU banks chiefs amid consolidation buzz, the Union Minister stated that in 2017, there were 27 public sector banks but after today's announcement, there will be 12 public sector banks. Sitharaman said that PSBs board empowered to recruit chief risk officer at market-linked compensation to attract the best available talent.

Last Friday, Sitharaman announced that the Union Government had announced an upfront release of Rs 70,000 crore and additional lending and liquidity to the tune of Rs 5 (five) lakh crore by providing upfront Capital to PSBs. Also, she had announced rate cuts by banks through MCLR reduction to benefit all borrowers.

(The above story first appeared on LatestLY on Aug 30, 2019 05:02 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).