FM to meet select bankers in Mumbai next week

Aims to impress upon them the need to increase lending to productive sectors

Finance Minister P Chidambaram is scheduled to meet select bankers in Mumbai on April 8 to impress upon them the need to increase lending to productive sectors including infrastructure projects so as to boost economic growth.

He is expected to meet officials from SBI and BoB, among others, according to sources.

Chidambaram will also meet investors and prod them to pump in funds into the country, they said.

The Finance Minister is likely to ask banks to increase lending to productive sectors to prop up growth. He will also try to address the concerns of the banks.

Deteriorating asset quality of banks is also expected to come up for discussions at the meeting.

India's GDP growth hit a decade low of 4.5% in the third quarter of 2012-13 fiscal.

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, of which corporate accounts constitute 53.68%.

Of this, about 172 corporate accounts had NPAs of more than Rs 100 crore at the end of December 2012. The amount involved in such cases is about Rs 37,194 crore.

At a meeting on March 18 with bank chiefs, Chidambaram had expressed concerns about stalled projects leading to slowdown of the economy.

Despite several steps being taken by the government to promote investments, as many as 109 private sector projects, each worth Rs 1,000 crore or more, are awaiting clearance from different ministries.

Terming stalled projects as worrying, Chidambaram had said steps are being taken to ensure that impediments are removed and credit flow takes place.

As many as 215 projects with an investment of Rs 7 lakh crore are stalled and banks have already disbursed about Rs 54,000 crore loan towards them, Chidambaram had said.

Besides, there are 126 new projects for which the outlay is Rs 3.55 lakh crore and amount sanctioned by banks against these was Rs 43,000 crore.

"The main reasons (for delays) are coal linkage, environment clearances, land acquisition," the Finance Minister had said, adding that there is now a greater degree of confidence than what was there 6 months ago.