FM zeroes in on banks to boost credit offtake | india | Hindustan Times
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FM zeroes in on banks to boost credit offtake

india Updated: Oct 12, 2009 22:11 IST
Mahua Venkatesh

Finance Minister Pranab Mukherjee, for the first time, will hold four separate meetings with the heads of the government-owned banks to focus more on each zone.

The series of meetings will primarily focus on the impact of deficient monsoons on credit offtake and demand. That apart, issues like interest rates, inflation and consolidation of PSU banks are also expected to be taken up.

While Mukherjee is expected to hold the first meeting in Kolkata on October 24, the second one is likely to take place in Delhi on 26.

The date for the western zone meeting to be held in Mumbai is yet to be fixed. Sources said that the date has not been fixed due to the state elections there. The south zone meeting has also been deferred.

Deficient rainfall during the kharif period has dampened demand for agriculture credit. However, bankers expected that with late rains demand would pick up even before the rabi season starts.

Of the total agriculture credit, about 60 per cent is disbursed during the kharif season. Public sector banks were given an agriculture loan target of Rs 32,500 crore in 2009-10.

Meanwhile, the consolidation process of PSU banks may be thrown in the backburner. A senior government official told Hindustan Times on condition of anonymity that there is a lack of clarity on the issue especially after the global meltdown leading to the collapse of several financial entities.

“There is no holistic approach on consolidation. There is ambiguity over mergers of state-owned banks as at this stage, when the economy needs to be boosted, the government is not in any mood to take chances and experiment,” the official said.

The government has not yet given its approval for the merger proposal of State Bank of Indore with its parent State Bank of India, though the plan has been lying with the finance ministry for sometime now.