Finance Minister P Chidambaram has called a meeting of heads of public sector banks on October 22 to take stock of their non-performing assets, credit growth and financial performance.
The broad agenda of the meeting include reviewing ways to cut down deteriorating asset quality. Credit growth in the targeted sectors is also a part of the agenda a senior finance ministry official said.
Gross non-performing assets (NPA) of public sector banks rose to Rs 1.76 lakh crore at the end of June quarter from Rs 1.55 lakh crore at March 31, 2013.The ratio of gross NPA to gross advances for commercial banks rose from 2.36 per cent in March 2011 to 3.92 per cent in June 2013.
Besides, financial performance of public sector banks would also be reviewed as the first half of the current fiscal is over, the official said.
The Finance Minister is expected to ask banks to give their assessment of additional funding they would require to give loans at lower interest rates to sector like auto, consumer durables, housing etc during the festival season to stimulate the economy.The decision to increase the quantum of capital infusion was taken at a meeting between P Chidambaram, RBI Governor Raghuram Rajan and Economic Affairs Secretary Arvind Mayaram in the national capital earlier this month.”This amount (Rs 14,000 crore provided for capital infusion in Budget, 2013-14) will be enhanced sufficiently. The additional amount of capital will be provided to banks to enable them to lend to borrowers in selected sectors such as two-wheeler, consumer durables.