At least four senior bankers working at rural branches said that lending has been slow in other states as farmers often delay repaying their loans in anticipation of a state largesse.
"This is inherent in the inevitable lags, in the timing of impact and the arrival of compensation from the government," said RBI Governor Urjit Patel.
RBI said near-term fiscal uncertainties, following implementation of GST along with rising committed liabilities of states could raise the fiscal deficit.
Ess Kay Fincorp is in talks with investors and that he is ready to dilute 15-20% stake to raise capital.
Govt's reluctance or inability to throw capital forever without banks showing any improvement in their finances probably may be the key reason for the latest drive.
Lending spreads have shrunk by 175–200 bps from peak levels due to steep competition and general lowering trend of interest rates.
Rewards may be delayed due to MFIs' digitisation switch, aimed at improving efficiency.
The Cabinet on Wednesday has set the ball rolling for consolidation in the banking sector by setting up a ministerial panel led by Finance Minister Arun Jaitley.
RBI is likely to put the proposed Rs 200 bank notes in circulation by the end of August or in the first week of September, according to people in the know.
The bank is in talks with institutional investors as it is growing its loan book at 15% rate.
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