Pandemic Covid-19 Virus – Responsive Role By the Public Sector Banks

  

 

Pandemic Covid-19 Virus – Responsive Role

By the Public Sector Banks

 

 

A.  The Pandemic 

 

1.   The extraordinary situation caused on account of the Covid-19 pandemic has caused a severe impact on India. As on 3rd May, 2020, :

 

·      Total cases              -        39980        

·      Cured / discharged  -        10633

·      Deaths                     -         1301

·      Migrated                           -        1

 

2.   The entire machinery of the Government is geared up and working relentlessly to arrest the pandemic, flatten the curve, and provide succor to the affected and simultaneously bringing down the new cases. NGOs, social service organizations, volunteers, etc., are extending huge support to the affected people. 

3.   Hon’ble Prime Minister Narendra Modi announced a 21-day lockdown which began on March 25. As the results of the lockdown were encouraging, the lockdown was extended by another 19 days i.e., till May 3 and further was extended  up to May 17th with few relaxations.

 

To save the nation from the possible economic emergency, besides health emergency which is experienced currently, the rulers and the financial controllers of the country are expected to  initiate measures to ensure that the country is having sufficient liquidity.

 

B.  Govt’s Initiatives 

 

I.              Under the Pradhan Mantri Garib Kalyan Yojana, various relief measures were rolled out like :

 

1.   Rs.50 lakh medical insurance to cover doctors, paramedics, and other medical staff.

2.   Additional 5 kg wheat or rice per person for 3 months, 1 kg dhal per household for 3 months, free LPG for Ujjwala beneficiaries for 3 months.

3.   Rs.2,000/- to 87 million farmers under PM Kisan.

4.   Rs.500/- to 200 million women Jan Dhan account holders for the next 3 months.

5.   Rs.20 lakh collateral-free loans to women SHGs.

6.   Rs.1,000/- to poor senior citizens, widows, and disabled.

7.   Increase in MGNREGS wages to Rs.202/- from Rs.182.

 

 

 

 

II.            Key Highlights of Direct Benefit Transfer (DBT) through Public Financial Management System (PFMS)

 

1.   More than Rs.36,659 crore transferred by using DBT through PFMS in the bank accounts of 16.01 crore beneficiaries during Covid 2019 lockdown.

2.   Cash benefits announced under Prime Minister Garib Kalyan Package also being transferred by using DBT Digital Infrastructure.

3.   PFMS usage for DBT payments increased over last 3 FYs; total DBT amount disbursed increased from 22% in FY 2018-19 to 45% in FY 2019-20.

4.   Direct benefit transfer ensures Cash benefit directly credited into the account of the beneficiary, eliminates leakage and improves efficiency.

5.   In order to ensure that weaker sections of society continue to get basic amenities and do not get impacted during lockdown period due to Covid 19, Rs.1.70 lakh crore was announced under Pradhan Mantri Garib Kalyan Package (PMGKP). More than 33 crore poor people received financial assistance of Rs.31,235 croe (as on 22 04 2020) under PMGKP. Robust digital payment infrastructure set up by the Government has enabled prompt transfer of cash payment under PMGKP through the Public Sector Banks.

6.   Under PMGKP, 2.17 crore building and construction workers received financial support amounting to Rs.3,071 crore, as on 13 04 2020.

7.   Rs.500 was credited in women account holder’s Jan-Dhan accounts. Till 13.04.2020 total number of women beneficiaries were 19.86 crore, which resulted in disbursement of Rs.9,930 crore.

8.   As on 13 04 2020, Rs.14,946 crore transferred to 7.47 crore farmers as first installment of PM-KISAN.

 

C.  RBI’s Regulatory Package

 

In terms of RBI Covid 19 regulatory package, 

 

1.   Banks have extended moratorium of three months to all borrowers on all instalments and interest / EMIs on Term Loans falling due between 01 03 2020 and 31 05 2020. Accordingly, the total repayment period will be extended by three months over the original repayment period.

2.   Easing of Working Capital Financing by way of reduction in margin and re-assessment of Working Capital facilities.

3.   Interest Subvention and Prompt Repayment Incentive for Short Term Crop Loans – extended period on account of Covid 19 -  all short term loans which are due for payment during the period from 01.03.2020 up to 31.05.2020 and are closed on or before 31.05.2020 will be eligible for the benefits of Interest Subvention and Prompt Repayment Incentive.

4.   The Reverse Repo cut to 3.75%  to retain some liquidity at Indian Banks helping in credit off take when the situation improves. 

5.   The special package to NABARD, SIDBI and NHB is further expected to infuse liquidity to small agriculture-driven businesses and low income housing.

6.   Announced long-term repos worth Rs 50,000 crore for non-bank financiers, and micro finance institutions to level-up their liquidity amidst COVID-19 pandemic outbreak.

 

 

 

D.  Public Sector Banks’ Initiatives

 

1.   Public Sector Banks and it’s committed work force have dealt with the grave situation caused due to Covid 19 pandemic with great perseverance and become a model for others to adopt. 

2.   PSBs have ensured banking services to its customers while maintaining social distancing.

3.   PSBs and Bank Mitras are going beyond the call of duty in these testing times. Their integrity and devotion is being seen and appreciated by the customers.

4.   Free of charge cash withdrawal from any other bank ATM allowed for debit card holders for three months.

5.   Bank staff and Business Correspondent Agents have been providing doorstep cash withdrawal service for women beneficiaries under Pradhan Mantri Garib Kalyan Yojana.

6.    Banks have publicized all the relief measures announced by the Government in its social media sites like Twitter, Facebook, and Instagram thereby receiving wide appreciation / likes from social media users for propagating the welfare schemes.

7.    To comply with the Government directives, Public sector Banks have issued necessary guidelines to all branches to stagger arrival of PM Garib Kalyan Package account holders at branches to maintain social distancing and orderly withdrawal of money.

8.    During the lockdown period, Few public sector Banks pressed into service mobile ATMs for facilitating cash withdrawal duly ensuring social distancing and providing hand sanitizers.

9.    Public sector Banks have popularized the PM CARES Fund through social media by facilitating scanning QR code and donating via  BHIM UPI App.

10.         Public sector Banks have  introduced new Loan schemes of Credit Support to Covid 19 affected customers in 

 

(a) MSME, Corporates, Business Entities / Service Units / Food and Agro Processing Units and Poultry Units and 

(b) Retail Loan Customers

 

E.   It may be inferred from the above that

 

1.   In order to retain the purchasing power of the public through enhancing the liquidity, the GOI has ordered to infuse huge money from out of the PMGKP.

2.   The RBI – the controller of the Banking system introduced many measures including the reduction of repo rate, repayment moratorium, relaxing NPA norms and extending assistance to NABARD, NHB and NBFCs – an attempt to increase the lendable resources in the financial institutions to improve the liquidity in the market.

3.   The public sector banks have initiated and introduced ample steps to reach the assistance to the needy, besides extending loan facilities to the deserving individuals, Business men and the corporates.

 

No doubt, If we all the stake holders of this great nation, including the common public, follow these measures with all the seriousness, it shall be possible for us to overcome the inevitable economic crisis after the normalcy is restored which we can optimistically expect at sight shortly.

*****************

Manimaran G V

General Secretary

All India Nationalised Bank Officers Federation ( AINBOF)

Canara bank officers’ Association (CBOA)

3rd April 2020.

 

 

 

 

 

 

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