Jaitley to meet heads of public sector banks on Friday

New Delhi: Finance Minister Arun Jaitley will meet the heads of public sector banks on Friday to review their performance and bad loans situation as also to persuade them to pass on RBI’s rate cut benefit to borrowers for propping growth.[caption id=“attachment_2287344” align=“alignleft” width=“380”]  Union Finance Minister Arun Jaitley. Image courtesy PIB[/caption] Besides, the meeting will review credit offtake by sectors such as home, education and minority as well as the progress made under the Jan Dhan Yojana and prime minister’s social security schemes among other issues, sources said. Reserve Bank has cut repo rate by 0.75 percent since January but not all banks have passed on the benefit of lower interest rates to customers. Last week, RBI reduced the short term lending rate (repo) from 7.5 percent to 7.25 percent. It was the third rate cut this year. The sources said Jaitley 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. The top 30 defaulters are sitting on bad loans of Rs 95,122 crore, which is more than one-third of the entire NPAs of public sector banks. It amounts to 36.50 percent. A finance ministry statement said Jaitley will also review the progress of three social security schemes namely Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY) among others. He will also review the progress made with regard to Micro Units Development & Refinance Agency (MUDRA), expeditious disposal of public grievances and Credit Enhancement Guarantee Scheme for Scheduled Castes among others, it said. Improving the performance of the PSBs and financial institutions, including through steps like capital infusion, would also be discussed in the meeting. The cabinet has already allowed banks to lower government stake to 52 per cent, which would enable them to raise capital from market. State Bank of India (SBI) and a few other public sector lenders are expected to raise funds of over Rs 16,000 crore from the market to meet their capital requirement. The government has allowed SBI to raise Rs 15,000 crore and Oriental Bank of Commerce to mobilise Rs 1,000 crore from the market. PTI