New Delhi, Aug 13 (UNI) Notwithstanding the tight money policy being followed by the RBI, Finance Minister P Chidambaram today said credit delivery in the near future will remain "brisk" and assured that lending to productive sectors will not be affected.
"We are confident that credit delivery will still be brisk.
Productive sectors will not be starved of loans," Mr Chidambaram told reporters here after a meeting with Chiefs of Public Sector Banks (PSBs).
This was Mr Chidambaram's first meeting with the Bank Chiefs after the quarterly review of the RBIs monetary policy last month, when some key rates were revised upward.
Mr Chidambaram said raising of Prime Lending Rates by the banks will not affect existing home loans of up to Rs 30 lakhs.
"I have asked Chairpersons if there is any indication of slowdown in the draw-down of sanction loans or in applications for new loans.
The overwhelming view and the consensus is that there is no slowdown in the demand for credit. There is some slowdown in consumption credit for personal loans but there is not slowdown in any other sector," he said.
As far as real estate was concerned, Mr Chidambaram said banks have imposed some restraint upon themselves but the demand for home loans continues to be "very high." "One of the intentions of current monetary policy is that the aggregate demand must be moderated. Non-food credit seems to have moderated slightly," he said.
Mr Chidambaram said there was some slowdown in consumer loan demand.
Mr Chidambaram said there was no evidence of a slowdown as far as infrastructure, project expansion and new projects were concerned.
The Finance Minister said there was a decline in banks' profits this fiscal due to operations in bond markets.
He, however, said bank deposits were growing satisfactorily, but said profitability of the PSBs has declined.
The banks' April - June gross NPAs were at 2.11 per cent, net NPAs stood at 0.93 per cent.
Mr Chidamabaram said bank advances in the current fiscal would grow by more than 20 per cent.
Asked when would the loan waiver money which Banks have disbursed, be given to them, Mr Chidambaram said this would be done after the Parliament's approval of the supplemenatry demands.
He said the Farm Debt Relief Scheme was implemented "error free." "I complemented all the banks for the remarkable job they did in completing the debt waiver and debt relief programme in a matter of 30 days. It's an extraordinary effort. In terms of size and scale, such a thing has never been attempted before", he said.
Mr Chidambaram said the total number of complaints that were being received stood at 1,16,000 as against 3,64,00,000 beneficiaries.
He said many of the complaints have been disposed off and all the remaining complaints will be disposed off by August 31, 2008. In most cases these complaints were due to poor understanding of the guidelines.
"Once the person is called and the guidelines are explained the complaints will be resolved", he said. .
Mr Chidambaram said the Rs 2.83 lakh crore agriculture credit target for fiscal 2009-09 would be met.
The Finance Minister said by and large the performance of the PSBs was on "expected lines." Deposits are still growing at a satisfactory level as compared to Q1 last year. The deposit growth rate is higher. Likewise advances in the Q1 as compared to last year were also higher.
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