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| FM to review banks' performance |
| Manojit Saha / Mumbai Oct 09, 2009, 00:21 IST |
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Banks from four regions will meet Mukherjee separately this month.
 With credit growth remaining low, the government is likely to prod public sector banks later this month to ensure that loans are made available and a soft interest rate regime is maintained.
Finance Minister Pranab Mukherjee is expected to take up the issues during a review meet with bank chiefs later this month. Breaking from practice, Mukherjee has decided to meet bankers on a region basis. So, the finance minister would meet the chiefs of Kolkata-headquartered banks on October 24 and a meeting with north-based banks was scheduled for October 28, sources said.
Dates for the minister’s meeting with the western and southern banks are yet to be finalised. Bankers are also scheduled to meet Reserve Bank of India officials for customary pre-policy meeting on October 12.
By meeting bank chiefs around the time of the credit policy, Mukherjee would also set the tone for interest rate movements irrespective of what Reserve Bank of India Governor D Subbarao announces on October 27.
The meetings would also be attended by officials from National Bank for Rural and Agricultural Development (Nabard), National Housing Bank and Small Industries Development Bank of India (Sidbi). Officials said that apart from providing a thrust to overall lending activities of public sector banks, the government wanted to ensure that the interests of the small and medium enterprises, farmers and retail borrowers were not affected.
According to the agenda circulated to bank chiefs, Mukherjee would review bank lending to agriculture, housing, automobiles, micro and small enterprises and to the weaker section of the society.
“The agenda mentions review of different financial parameters like non-performing asset and capital adequacy ratio. Though discussion on interest rates is not mentioned in the agenda, ministry officials may seek our views on the issue,” chairman of a mid-sized bank said.
The review would come around the time when banks would be finalising their second quarter results.
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