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Chidambaram to review PSU banks’ performance

K. R. Srivats
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P. Chidambaram, Finance Minister
P. Chidambaram, Finance Minister

Finance Minister P. Chidambaram will meet chief executives of public sector banks on November 15 to review the performance of these banks.

This will be his second meeting with PSB chiefs after assuming charge on August 1. The first one was in the third week last month.

The November 15 meet will also be Chidambaram’s first with bankers after the Reserve Bank hiked the provision for restructured standard accounts from 2 per cent to 2.75 per cent.

Keeping in view the rise in non-performing assets (NPAs) and restructured advances, the RBI, in its recent monetary policy review, initiated several steps such as advising banks to put in place by December-end an effective mechanism for information-sharing.

Chidambaram will also meet Chief Ministers of the northern States and chief executives of PSBs on November 16 in the Capital, sources said.

And on November 20, he will meet Chief Ministers of the southern States at Bengaluru, along with bank chiefs, it is learnt.

In his interaction with bank chiefs on August 18, Chidambaram had asked them to put pressure on real estate developers to lower property prices to revive the economy.

He had also told bankers to impress upon builders to lower prices of apartments that were ready for possession but not getting sold.

srivats.kr@thehindu.co.in

(This article was published on November 2, 2012)
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Comments:

TheFM's meeting PSU banks to take stock of things at this juncture when the economy needs solid support from them is welcome.The FM should exhort bankers on the following items which will give a boost to the economy.1)They have to reduce the interest rate for the manufacturing sector by suitably adjusting their present NIM. The banks cannot expect to make huge profit at the cost of the economy.2)The Savings bank interest rate though deregulated has been kept unchanged at 4% which is nothing compared to the inflation rate prevailing at double digits.3)NPAs need to be tackled by being very strict with borrowers and this can be achieved only through rating of the borrowers and levying a small penalty based on their conduct of accounts.This levy over a period will be sufficient to cover the NPAs and the provisions towards NPAs which is at the cost of all other stake holders can be minimised.4)TheCash deposit ratio needs to be considerably brought down to improve profitability.ALM be strong

from:  Dr.T.V.Gopalakrishnan
Posted on: Nov 3, 2012 at 07:59 IST
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