Finance Minister P Chidambaram will meet heads of public sector banks on July 3 to review financial performance of lenders and discuss ways to step up lending activity to boost sagging growth.
New Delhi: Finance Minister P Chidambaram will meet heads of public sector banks on July 3 to review financial performance of lenders and discuss ways to step up lending activity to boost sagging growth.
The rescheduled meeting will take place on July 3 and the broad agenda of the meeting include direct benefit transfer, deteriorating asset quality and credit growth, official sources said.
Earlier, the banks chiefs meet scheduled for today was postponed due to AGMs of some banks on the same day.
The Finance Minister is expected to review steps being taken by banks to push stalled infrastructure projects, asset quality and credit inflow to productive sectors.
He is likely to ask banks to increase lending to productive sectors to prop up growth, sources said. Economic growth hit a decade low of 5 percent in 2012-13.
Bankers said the Finance Minister may also ask banks to reduce their lending rates for pushing up loan growth and economic activity.
Earlier this month Chidambaram had said that although RBI has reduced the policy rates by 1.25 percent since January 2012, banks have lowered the lending rates by only 0.3 percent.
"As CPI inflation and deposit rates fall, I would urge commercial banks to translate monetary policy to retail borrowers and firms through lower lending rates," he had said.
India Inc has been complaining about the reluctance of banks to pass on the benefit of rate cut to corporates and retail borrowers.
As per the agenda note sent out to banks, the Finance Minister will also discuss issues relating to the recovery of bad loans, restructuring of loans and recent RBI guidelines pertaining to it.
Non-performing assets of banks have been on the rise for past several months due to slowdown in the economy.
The gross NPAs of some public sector banks, including State Bank of India and Punjab National Bank have crossed 4 percent of the total assets at the end of March, 2013.
Gross NPAs of PSU banks have risen from Rs 71,080 crore as on March 2011, to Rs 1.55 lakh crore as on December 2012.