Finance Minister Arun Jaitley will meet the heads of public sector banks on wednesday to review the banks' performance and persuade them to pass on the RBI's rate cut benefit to borrowers to prop growth. The meeting will review credit offtake and the progress made under the Jan Dhan Yojana, among other things, sources said.
Reserve Bank of India has cut repo rate by 0.5 per cent in the last two months but the banks have not followed up on that yet by reducing their lending rates. last week, the RBI reduced the short term lending rate (repo) from 7.75 per cent to 7.5 per cent with immediate effect. This was the second rate cut after January 15 when policy rate was reduced by similar percentage points.
According to sources, during the quarterly meeting attended by heads of public sector financial institutions such as Nabard and NHB, the Finance Minister would also review the progress made with regard to decisions taken at the two-day Gyan Sangam.