Page 5 - Banking Finance May 2025

BANK UPDATE

Government Asks Public

Sector Banks to Improve
Education, Housing Loan
Disbursal

Financial Services Secretary M
Nagaraju has called on public sector
Ò»©­ banks (PSBs) to enhance their perfor-

mance in disbursing education and
housing loans. The directive came dur-
ing a review meeting with MDs, CEOs,
and senior officials of PSBs held in
Bhubaneswar.
According to a statement from the
FinMin Urges Banks to Ex-
MTNL Defaults on Rs. Department of Financial Services (DFS),
pand Farm Credit Through Nagaraju "advised banks to improve
8,346 Crore Loans from
Digital Platforms performance under education and
PSU Banks housing loans." He also reviewed the
The Union Finance Ministry has di-
State-run telecom company implementation progress of various
Mahanagar Telephone Nigam Lim- rected banks - including public sector, social security schemes during the
private sector, regional rural, and co-
ited (MTNL) has defaulted on loans meeting.
operative banks - to step up their en-
totaling Rs. 8,346.24 crore from gagement with platforms that support Nagaraju lauded Odisha's State Level
seven public sector banks, accord- farm credit expansion. Banks have been Bankers Committee (SLBC) for its
ing to a regulatory filing dated asked to register with the National achievements under Social Security
April 19. As of March 31, 2025, Credit Guarantee Trustee Company Schemes, the Customer Service Point
the firm's total debt obligations (NCGTC) and the e-Kisan Upaj Nidhi (e- (CSP) Plus initiative, and praised the
stood at Rs. 33,568 crore.
KUN) portal. state government's active support in
The loan defaults include Rs. These platforms facilitate lending implementing central schemes.
3,633.42 crore owed to Union
against electronic negotiable ware- Meanwhile, GST officials detected
Bank of India, Rs. 2,374.49 crore house receipts (e-NWRs), allowing 25,009 fake firms fraudulently passing
to Indian Overseas Bank, Rs.
farmers to leverage stored produce as input tax credit (ITC) worth Rs. 61,543
1,077.34 crore to Bank of India,
collateral for loans. Officials said this crore in FY25, raising further concerns
Rs. 464.26 crore to Punjab Na-
initiative aims to enhance access to about the need for stronger verifica-
tional Bank, Rs. 350.05 crore to
formal credit for farmers and agri-busi- tion mechanisms across financial
State Bank of India, Rs. 266.30 nesses. channels.
crore to UCO Bank, and Rs. 180.3
So far, eight banks have enrolled with
crore covering principal and inter-
NCGTC, while 26 banks have signed up Banking Laws Amendment
est.
for the e-KUN portal, which is inte-
The defaults occurred between grated into the broader Jansamarth Act, 2024 Gets Presidential
August 2024 and February 2025. portal designed to promote ease of Approval
MTNL's overall debt also includes credit access. The Banking Laws (Amendment) Act,
Rs. 24,071 crore in sovereign guar-
antee bonds and Rs. 1,151 crore The government hopes that greater 2024, has received Presidential assent
borrowed from the Department of participation from banks will improve and has been officially notified by the
Telecom for bond interest pay- rural liquidity, strengthen the farm government. However, the effective
economy, and reduce reliance on infor- date for implementing various provi-
ments.
mal lending sources. sions will be notified separately.

BANKING FINANCE | MAY | 2025 | 5