NEW DELHI/MUMBAI- India is pushing state-run banks to approve new loans amounting to 500-600 billion rupees ($6.8-8.2 billion) by the end of March, according to two government sources, as authorities seek to shore up a stuttering economy as the coronavirus spreads.
Public-sector banks have received nearly 8 million new applications for loans, mainly from rural households and small businesses, and the government expects up to 6 million of them to be approved by the end of the month, said a senior finance ministry official with direct knowledge of the matter.
Policymakers are worried the coronavirus outbreak could curb economic growth for at least the first two quarters of this year, so are looking to drive up lending to bolster investor and consumer sentiment, according to the second government source.
Lenders have been asked to focus particularly on 10 states in northeast and central India, regions where less credit has been made available than elsewhere, said the person. Both sources declined to be named as the discussions are private.
“India is facing a new challenge in coronavirus, and the government is trying to push bank credit as much as possible,” the finance ministry official told Reuters. — Reuters
