FinMin asks PSBs to consider selling, swapping loan assets

The finance ministry has asked public sector banks (PSBs) to explore options for selling and swapping of loan assets with other lenders with a view to strengthen their balance sheets.

Depending on their competencies, banks can look at opportunities to buy or swap loan assets, sources said, adding this was one of the issues discussed during ‘PSB Manthan’ last month.

Swapping and selling assets will help banks to focus on their core competencies and trim their burden.

For example, if a bank has expertise in MSME lending, it can swap their retail loan portfolio with other who is good in the sector, sources said.

In order to increase credit availability to small businesses, the finance ministry has also asked PSBs to open micro, small and medium enterprises (MSMEs) intensive branches.

MSMEs, which are a huge employment generator in the country, contribute 40 per cent of the India’s manufacturing.

Besides, they were also advised to strengthen cluster based lending, people aware of the news said, adding that branches would help in channelising loans to the sector which is engine of growth.


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