Finance minister Pranab Mukherjee will look into trends in banking sector, arguably one of the worst hit by the economic slowdown. The minister, who is meeting chief executives of public sector banks on Monday, is likely to ask banks to reduce rates on home, personal and auto portfolios.
He would also review extent of credit flows directed towards various sectors including agriculture and education, a senior official at a state-owned bank said. This is the first meeting to be held with bankers after Mukherjee was given charge of the portfolio following Prime Minister Manmohan Singh’s surgery.
In addition, Mukherjee would also look into other banking aspects including growth in credit and deposits apart from the management of non-performing assets. PSU banks have been asked to reset increase their credit flow in the last quarter of the current fiscal with a view to keeping the growth story on track.
“There could be rate cuts in February, a decision to this effect would be taken based on the decision of the Asset Liability Committees (AlCO) of the banks,” a PSU chief, who did not wish to be quoted said.
The government has also directed the banks to focus on low cost deposits in order to maintain healthy financial health.