Principal Secretary to the Prime Minister P.K. Mishra has warned banks against returning to aggressive lending driven by short-term optimism. He urged them to focus on project viability, repayment capacity, and careful credit assessment rather than merely expanding credit.
Speaking at the SBI Banking and Economics Conclave in Mumbai, Mr. Mishra recalled that poor lending decisions in the past contributed to a buildup of stressed assets. The subsequent cleanup required significant resources and time, which could have supported productive investment.
He stressed the importance of preserving the institutional memory of that episode and maintaining disciplined, sustainable lending practices to prevent financial instability. Mr. Mishra also emphasized strengthening manufacturing performance, productivity, and workforce skilling as key factors for sustaining robust economic growth.
This focus on prudent credit expansion, viable projects, manufacturing, and skills aligns with ongoing efforts to support long-term economic growth while avoiding risks linked to excessive lending.
