Chidambaram to meet PSU banks on August 18
Amid slowdown in economy and concerns over rising bad loans, Finance Minister P Chidambaram will review the performance of public sector banks (PSB) on August 18.
New Delhi: Amid slowdown in economy and concerns over rising bad loans, Finance Minister P Chidambaram will review the performance of public sector banks (PSB) on August 18.
"The meeting of Finance Minister P Chidambaram with heads of PSU banks will deliberate on non-performing assets (NPAs), agriculture loans, credit to the infrastructure sector and matters related to human resource," sources said.
This will be the first meeting of Chidambaram with the chiefs of PSU banks since taking over as the Finance Minister on August 1.
India's economic growth slowed to a 9-year low of 5.3 percent in the last quarter of 2011-12.
Industrial growth, as measured by IIP, contracted 0.1 percent during the April-June quarter of the current fiscal in a high interest rate regime that has been put in place by the Reserve Bank to rein in inflation.
Expressing concerns over the issue, Chidambaram recently indicated that he would prefer lower interest rates to spur investment and growth.
Slowdown in economy has impacted repayment capacity of borrowers. Gross NPAs of public sector banks increased to 3.3 percent in 2011-12, from 2.3 percent the year-ago period.
Besides, the country is facing drought-like situation in several parts, which too could pressure on bank loans.
In its monetary policy review last month RBI cut growth expectations for the fiscal to 6.5 percent, although Prime Minister's Economic Advisory Council Chairman C Rangarajan had pegged it at above 6.5 percent.
Heads of public sector financial institutions like Nabard, Sidbi, NHB, IIFCL and Exim Bank will also attend the meeting with the Finance Minister, sources said.