Arun Jaitley reviews performance of state-run banks on Friday

It is to see the progress of various financial inclusion schemes, but also to look at the overall health of the banking system

Finance Minister Arun Jaitley is undertaking a quarterly performance review of state-run banks here on Friday not just to see the progress of various financial inclusion schemes, but also look at the overall health of the banking system, officials said.

The meeting is also expected to take up suggestions made during the last review of June 6 on topics such as non-performing assets, or bad loans, inter-operability of financial inclusion schemes, credit flow, and banks' expansion and consolidation, officials said.

Some movement forward is also expected in how to empower the banking system further, and encourage quick decision-making on bona fide matters, so that the issue of non-performing assets can be dealt with and fresh loans be disbursed in an environment that does not prove hostile later.

"Various suggestions have come up for empowering the banks, functioning in an environment, so that they can deal with the situation. The government is fully committed to support the banks in this regard," Jaitley had said after the last meeting.

The meeting also comes against the backdrop of several state-run banks reporting huge losses for the quarter ended June 30, owing to a sharp rise in provisioning for non-performing assets on account of an asset quality review ordered by the Reserve Bank of India.

The meeting will also take stock of how well the capital infusion of Rs 22,915 crore for 13 state-run banks announced by the government last month, as part of the first tranche of such an exercise for this fiscal, has helped the system.

"The finance minister will also review the progress of credit, growth and asset quality especially with regard to priority sectors lending, including credit flow to agriculture, insurance sector, micro and small enterprises, minorities, SC and ST, education and housing loan," the ministry said.