After the third rate cut by Reserve Bank of India (RBI) and governor saying that a repo rate cut is a direct way to reduce cost of funds for banks, the Finance Minister Arun Jaitley will be meeting the heads of public sector banks (PSU) on June 12 to review the banks' annual performance and bad loans situation as also to persuade them to pass on RBI's rate cut benefit to borrowers for propping growth.
The minister will be reviewing credit offtake and the progress made under the Jan Dhan Yojana and Prime Minister social security scheme among other things and will also deliberate on the issue of non-performing assets (NPAs) and discuss ways to contain this. Gross NPAs of PSU banks have gone up to Rs 2,60,531 crore as on December 2014, as per the RBI data. Jaitley had termed NPAs at 5.2 per cent as high and said it is too early to consider the improvement in the bad loan situation last quarter as a 'turnaround' and was keeping his fingers crossed.
It has been reported that 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 and would also discuss improving the performance of the PSBs and financial institutions, including through steps like capital infusion in the meeting.
