Cab Secy may review PSU banks lending this week

Concerned over banks not improving the credit flow to the industry despite stimulus packages, Cabinet Secretary K M Chandrasekhar is likely to take up the issue this week with senior officials of the Reserve Bank and heads of the public sector banks.

The industry representatives, mainly those engaged in manufacturing of export items, have complained to the government about banks' reluctance to lend even as the RBI has reduced key policy rates several times since mid-September.

While several banks have announced cuts in the interest rates on the housing and car loans, sanctions have slowed as the lenders have become over-cautious, industry officials said.

The meeting would be attended by Commerce Secretary G K Pillai, Finance Secretary Arun Ramanathan and RBI Deputy Governor Usha Thorat.

"There have been complaints from exporters... We will review whether banks are lending or not," a senior official said.

Federation of Indian Export Organisations President A Sakthivel said, "We have already written to the finance and commerce ministries regarding this... Banks should have a proactive approach to help the exporters to reach new customers."