India is planning to ask state-run banks to reach out to every district to expand lending to boost demand in the economy, the finance minister said, a move that comes at a time when most lenders are already seeing an increase in bad loans.

A similar exercise was undertaken in 2019-20 when the government ordered state-run banks to hold more than 400 loan fairs to spur growth that had started showing signs of weakness even before COVID-19 hit the country.

“There will be a credit outreach even this year in every district of the country,” Nirmala Sitharaman said in a news conference on Wednesday.

India has taken various measures to help revive the economy after two devastating waves of coronavirus infections that have led to a record economic contraction. “In order to keep the momentum of the stimulus that we have given we have also asked the banks to go out and give to those that want to borrow from them,” Sitharaman said.

However, such a move could pile more stress on lenders. Domestic banks have struggled to contain bad loans, especially in their retail portfolios, as the pandemic and resultant lockdowns hit economic activity and limited borrowers’ ability to repay debt.

India’s largest lender State Bank of India posted a four-fold jump in slippages, or new bad loans, for the first quarter, ending in June, as its home loan and small business segments struggled.

Lenders have not only witnessed higher level of defaults in unsecured credit such as credit card and personal loans but also in far more insulated segments such as housing loans.

India’s Revenue Secretary Tarun Bajaj told the same news conference the government could announce rules allowing companies to list overseas in the next budget in February.

The comments confirm a Reuters report that said India would take around six months to announce rules allowing companies to list overseas - taking longer than some expected as the finance ministry irons out issues related to taxation.

“To make it (overseas listing rules) a success, there would be requirements of some amendments to legislation to ensure there is smooth trading of these outside the territory of India,” Bajaj said.

Finance Minister Nirmala Sitharaman on Wednesday said that public sector banks (PSB) will adopt a nationwide credit outreach programme this year. Addressing the media in Mumbai, she said that banks will go about to exhibit loan offerings in every district of the country in a bid to enhance the credit demand.

A similar outreach programme was undertaken by the public sector banks in which some private sector banks also participated to boost credit offtake in the face of an economic slowdown.

“With changed times, now industries have option of raising funds even from outside the banking sector. Banks themselves are raising funds through various avenues. These new aspects need to be studied to target credit where it is needed,” she said.

Sitharaman said that during her interaction with the chiefs of public sector banks it was highlighted that banks can play a crucial role by hand-holding industries from a particular sector to enable them to become an exporter and thereby play an important role in assisting One district one Product scheme suggested by the Prime Minister.

Meanwhile the Cabinet Committee on Economic Affairs on Wednesday approved the FDI proposal for an investment of up to Rs15,000 crore in Anchorage Infrastructure Investment Holding Ltd, an India investment holding incorporated specifically for the purpose of investment in infrastructure and the construction-development sectors.

The FDI will also be used for investments to be made in transport and logistics sectors along with downstream investment in the airport sector and aviation related businesses and services.

The investment also includes transfer of share of Bangalore International airport Limited to Anchorage, and investment of Rs 950 crore in Anchorage Infrastructure Investment Holding Ltd by 2726247 Ontariao Inc, a wholly-owned subsidiary of OAC which is the administrator of OMERS’, one of Canada’s largest defined benefit pension plans.

The investment will be a major boost to the infrastructure and construction sector and also to the Airport sector. The investment will substantiate government of India’s plan to develop world class Airport and transport related infrastructure though private partnership. It will also be a boost to the recently announced National Monetisation Pipeline (NMP), as it will help fund leasing out of state-owned infrastructure assets which involves handling assets like roads, railways, airports, sports stadiums, power transmission lines and gas pipelines to private operators. Anchorage Infrastructure Investment Holding Ltd is proposing to make downstream investment in some of the sector covered under the NMP.