Finance minister to meet CMs on growth, banks

Finance minister P Chidambaram has decided to hold a series of meetings with the state chief ministers to assess the status of financial inclusion, penetration of banking and the lending pattern in each state. Mahua Venkatesh reports.

Finance minister P Chidambaram has decided to hold a series of meetings with the state chief ministers to assess the status of financial inclusion, penetration of banking and the lending pattern in each state.

The first meeting would be held next Friday with the chief ministers of the northern states, which include Uttar Pradesh, Uttaranchal, Haryana, Punjab and Jammu and Kashmir.

This would be followed by more such discussions with chief ministers of other states.

Chidambaram is expected to focus on several state-level issues while taking stock of the financial inclusion programme and penetration levels to asess the number of new banks accounts that have been opened.

He is also expected to discuss the lending pattern and the credit growth in the states, especially for agriculture, micro and small enterprises, housing, weaker sections, and the credit-deposit ratio.

The chiefs of several state-owned banks would also be present in the meetings.

"The thrust would be on education loans and credit to the minority sectors," a senior finance ministry official, who did not wish to be identified, said.

Separately, Chidambaram is also set to meet the CEOs of government banks on Thursday to take stock of the situation and assess the growth in credit after banks decided to slash interest rates on home and automobiles.

The second round of meetings would be held between the finance minister and the chief ministers of the southern states is slated to be held on November 20.

The finance minister has underlined the need to revive investments to boost economic growth.

All public sector banks have either slashed interest rates for home and auto loans even as the Reserve Bank of India decided to hold interest rates to boost demand.

"The finance ministry wants a report on credit growth after the interest rates have been reduced. We are satisfied with the efforts of the banks especially since the central bank has done little," the official said.