Jaitley to meet PSB chiefs today

To review Q3 performance; likely to ask banks to cut lending rates

Union Finance Minister Arun Jaitley (pictured) will review public sector banks' (PSBs) performance in the third quarter of FY15 at a meeting of bank chiefs on Wednesday. In the meeting, he is likely to ask the banks to reduce their lending rates, in order to pass the benefit of the Reserve Bank of India (RBI)'s rate cut to consumers.

According to sources, Jaitley will also review the work done under the Prime Minister's Jan Dhan Yojana and social security schemes.

Last week, RBI had cut the short-term lending rate rate from 7.75 per cent to 7.5 per cent with immediate effect. This was the second rate cut after January 15, when the policy rate was reduced by 25 basis points.

However, barring Union Bank of India and State Bank of Travancore, none have passed on the benefit to customers.

Jaitley would be reviewing the progress made with regard to decisions taken at the two-day Gyan Sangam held in Pune at the start of the year.

A decision was taken to set up an autonomous 'Bank Board Bureau' with professional members to improve the governance of PSBs.

The board would be responsible for search and selection of PSB heads as well as non-official directors.

Wednesday's meeting will also review various key financial sector issues such as credit offtake in the economy and priority sector lending. Improving PSBs' performance through steps such as capital infusion, among others, will also be discussed.