Finance Minister P Chidambaram will meet chief executives of public sector banks on Wednesday for a quarterly performance review. This meeting assumes importance as it is seen as the last such performance review before the upcoming general elections.

It also comes in the backdrop of the messy state of public sector banks, many of which are in trouble due to rising non-performing assets.

Bad loans as a percentage of total advances are about 4.2 per cent. If one were to factor in restructured loans, it would shoot up to more than 10 per cent.

The recent blow-up at United Bank of India is also likely to figure in Wednesday’s meeting.

Even as public sector banks grapple with the problem of NPAs or bad loans, there is now a big question mark over capital infusion in these banks for the next few years.

The Centre has proposed capital infusion of ₹11,200 crore in public sector banks during 2014-15. This amount is seen as inadequate given the expected business growth and capital requirements under Basel-III norms.

Besides capital adequacy, Chidambaram is expected to discuss the NPA situation and recovery measures taken by banks, status of stalled projects as well as credit flow to new projects.

After this review meeting, Financial Services Secretary Rajiv Takru will hold a meeting with bank chiefs to discuss wage revision issues, leave travel concession rules and delegation of power at the branch level.

Vigilance Commissioner JM Garg will also have an interaction with chief executives of public sector banks here on Wednesday, sources said.

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