Zee Media Bureau
New Delhi: Finance Minister P Chidambaram on Tuesday met heads of public sector banks and took stock of their non-performing assets, credit growth and financial performance.
After the meeting, Finance minister said credit growth has been satisfactory and is likely to be the same for the rest of the fiscal year.
FM further added that rise in banks' non-performing assets is "unacceptable" and expected that bad loans will come down after economy picks up.
Finance Ministry is monitoring top 30 NPA accounts in each PSU bank, Chidambaram said.
All PSU banks should set up separate verticals for recovery from written off NPA accounts, FM said.
Housing loan recorded a healthy growth of 61 percent in Q2.
The broad agenda of the meeting include reviewing ways to cut down deteriorating asset quality. Credit growth in the targeted sectors was also a part of the agenda,
Gross non-performing assets (NPA) of public sector banks rose to Rs 1.76 lakh crore at the end of June quarter from Rs 1.55 lakh crore at March 31, 2013.
The ratio of gross NPA to gross advances for commercial banks rose from 2.36 percent in March 2011 to 3.92 percent in June 2013.
Besides, financial performance of public sector banks has also been reviewed as the first half of the current fiscal is over.
As per the latest industrial output data, the output of the consumer durables sector declined by 7.6 percent in August, while the decline in consumer goods segment was 0.8 percent.
During the first quarter of the current fiscal, economic growth slipped to 4.4 percent, the slowest pace in at least four years, dragged down by a contraction in manufacturing and mining.
The country's gross domestic product (GDP) had expanded by 5.4 percent in the April-June quarter of the last fiscal. On a sequential basis, the growth rate declined from 4.8 percent in the January-March period of 2012-13.
With PTI Inputs