Now, PM to meet PSU bank chiefs

Prime Minister Narendra Modi, who prefers to cut hierarchy and have direct interaction - be it bureaucrats or students - will next meet chiefs of public-sector banks.

The proposed meeting comes amid rising bad loans and reports of various irregularities in state-owned banks. The prime minister is likely to take stock of the banks' performance - an exercise usually undertaken by the finance minister.

"Credit offtake has remained low. He wants to discuss with bankers how to increase it," said a finance ministry official, who did not wish to be identified.

The credit offtake fell to Rs 72,100 crore between April 1 and August 22 this year from Rs 2.35-lakh crore in the same period last year. The incremental growth in credit since the start of the financial year slowed to 1.3 per cent from 4.7 per cent. While overall non-food credit grew a mere one per cent so far this year incrementally, credit to industry actually fell 0.6 per cent since April.

The meeting is likely to happen after the vacant posts of chairman and managing directors (CMDs) in public-sector banks in November. The National Democratic Alliance government had recently scrapped the selection of six bank chiefs recommended by the previous United Progressive Alliance regime, after a high-level panel found irregularities in the process followed.

Officials said as the morale of some CMDs appears to be down after the change in the selection process, the Prime Minister is also likely to give a pep talk to the bankers just the way he gave to the bureaucrats in his two interactions with them since assuming office in May.

In the meeting with secretaries of the Central government last Saturday, Modi had asked them to act fearlessly. The meeting came in the backdrop of sudden transfers of some high-profile officers to low-key ministries. Sources said it aimed at allaying fears in the minds of the officers.

Modi might also ask for a status report on his flagship financial inclusion programme, Pradhan Mantri Jan-Dhan Yojana, and discuss freely with banks the problems they are facing in rolling out the scheme.

G S Sandhu, secretary, Department of Financial Services will take a meeting on November 5 to discuss the progress of the scheme. Besides bank CMDs, it is also likely to be attended by insurance companies and the telecommunications department. Officials from the Unique Identification Authority of India will also be there to track seeding of Aadhaar with bank accounts.