Finance Minister Nirmala Sitharaman announced several steps, including front-loading of growth capital to public sector banks, additional capital to housing finance companies(HFCs) and lifting the ban on the purchase of new vehicles by government departments.
Budget announcement of providing recapitalization bonds of Rs 70,000 crore to public sector banks will be front-loaded, which will allow banks to lend up to Rs 5 trillion, benefitting retail borrowers, small traders and companies, said by Sitharaman flank by her departmental secretaries.
To encourage more credit support for purchasing houses, vehicles and consumer goods and additional liquidity support of Rs 20,000 crore will be provided to housing finance companies by the National Housing Bank, taking the total amount to Rs 30,000 crore, she added. Also, a ban on the purchase of new vehicles by government departments will be lifted.
The minister had held meetings with industry representatives across following sectors, like banking, automobile, foreign portfolio investors, micro, small and medium enterprises, industry associations and real estate developers last month to understand the sectoral problems.