External Affairs Minister Pranab Mukherjee, who is handling the finance portfolio, will meet top executives of PSU banks tomorrow to review third quarter performance, loan disbursal and the impact of the stimulus packages announced by the government.
The meeting is being held in the backdrop of the third quarterly review of monetary policy by the Reserve Bank of India (RBI), which observed that most banks have reduced lending and deposit rates to some extent, but there are some which are yet to do so.
Therefore, it is expected that Mukherjee may ask banks to ease interest rates further to prop up demand.
According to the official statement, “The agenda of the meeting includes review of credit flow and status of implementation of the packages announced for stimulating the economy.”
In the last few weeks, many initiatives have been taken both by banks and the government to boost demand in the economy.
These include opening the refinance window for commercial banks and reducing interest rates for housing loans of up to Rs 20 lakh.
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Besides, the RBI also announced the refinance window to financial institutions like National Housing Bank of Rs 5,000 crore while Small Industries Development Bank of India was given Rs 7,000 crore.
The statement said that the meeting will also be attended by chiefs of government financial institutions.
In a bid to boost the economy, the RBI since mid-September has taken a slew of measures including cutting the short-term lending (repo) rate.