Fintech: Ministry of Finance asks banks to explore the possibilities of fintech partnerships and joint lending

Ministry of Finance appealed to public sector banks to study fintech partnerships and co-financing opportunities to expand your business. Sources say that in a recently completed OVO performance review conducted by the Treasury, lenders were asked to focus on technology and data analysis to advance their lending.

The ministry also urged the heads of public sector lenders to strengthen IT security and cybersecurity systems to check for fraud.

Banks have been asked to authorize loans for manufacturing sectors to speed up the recovery of an economy facing headwinds, including the Russo-Ukrainian war, the sources said.

In accordance with RBIAccording to the latest data, lending growth from public broadcasters improved significantly to 7.8% in March 2022 from 3.6% a year ago. Some OBOs recorded a 26 percent increase. (BoM) recorded a 26 percent increase in gross advances to Rs 1,35,240 crore at the end of March 2022. It was followed by growth of 10.27% and 9.66% respectively.

The Bank of Mexico, headquartered in Pune, recorded a 16.26% increase in deposits and mobilized Rs 2,02,294 crores at the end of March 2022. Union Bank of India was second with an increase in deposits of 11.99% (Rs 10,32,102 crores), while

recorded a 10 percent rise to Rs 5,84,661 crore.

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Banks have been asked to expedite resolution of the non-performing assets (NPA) problem and focus on recovering bad loans, the sources said.

The meeting summed up the banks’ asset quality and business development plans, the sources said, adding that Rs 100 crore non-performing assets (NPA) and recovery status were also discussed.

It is worth noting that the meeting was held against the backdrop of the fact that all PSB made a profit for the second consecutive financial year. They more than doubled their net income to Rs 66,539 crore in FY 22. The collective profit of the 12 state-owned banks together was Rs 31,820 crores in fiscal year 21.

However, there have been collective losses for five consecutive years from 2015–16 to 2019–20.

The largest net loss was recorded in 2017-2018 at Rs 85,370 crore, followed by Rs 66,636 crore in 2018-2019; Rs 25,941 crore in 2019-2020; Rs 17,993 crore in 2015-2016 and Rs 11,389 crore in 2016-2017.

In order to improve the financial health of the PSB, the government has implemented a comprehensive 4R strategy – transparent recognition of NBOs, resolution of distressed accounts and recovery of value, recapitalization of PSBs, and reforms of PSBs and the wider financial ecosystem – for a responsible and clean system. .

As part of the 4R strategy, comprehensive steps have been taken to reduce the NPA or PSB.

As part of the strategy, the government has allocated Rs 3,10,997 crore for bank recapitalization over the last five fiscal years – 2016-17 to 2020-21, of which Rs 34,997 crore has come from budget appropriations and Rs 2,76,000 crore. crore by issuing recapitalization bonds for these banks.

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