The annual performance review meeting will also take stock of credit flow to various sectors including Micro, Small and Medium Enterprises (MSMEs), agriculture, education, and to the weaker sections of society.
Finance minister Arun Jaitley is likely to meet the bank chiefs on September 25 to review the performance of the public sector banks (PSBs).
The minister is likely to discuss the issue of non-performing assets (NPAs) with the heads of PSBs and progress made so far in the recovery of bad loans. The government-run banks account for the major chunk of bad loans in the banking sector.
The annual performance review meeting will also take stock of credit flow to various sectors including Micro, Small and Medium Enterprises (MSMEs), agriculture, education, and to the weaker sections of society.
The minister will also review the government-run schemes such as Pradhan Mantri Jan Dhan Yojana, MUDRA Yojana and Stand-up India, as well as social security schemes, including Pradhan Mantri Jeevan Jyoti Yojana (PMJJY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY).
The meeting comes at a time when the banks are grappling with NPAs to the tune of Rs 9 lakh crore and the government, in order to clean up the sector, is moving to create stronger banks through consolidation of PSBs. On Monday, the government announced merger of Vijaya Bank and Dena Bank with Bank of Baroda (BoB) to create the country's third largest bank. The move is part of the government's efforts to clean up the banking sector.
With high NPAs and increasing cost of banking operations, the government is looking at the consolidation of banks as an option for weak banks to survive. The government also feels that it is difficult to recapitalise banks with public money for continuation of their business.
The meeting is also likely to review the steps taken by the banks to check the bad loan accounts exceeding Rs 50 crore. The finance ministry had earlier written to the banks to check such accounts, failing which they could face the criminal conspiracy charges.
The ministry had last month issued a warning to the banks asking them to identify such accounts to avoid any criminal charges by investigative agencies if any siphoning of funds was detected in the defaulting accounts.
Taking Stock
Rs 9Lcr worth NPAs with banks
Rs 50cr Bad loans held by banks will be reviewed
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