Union minister of state for finance Anandrao Adsul has called a meeting of heads of all public sector banks in Mumbai on Saturday to take stock of their sticky assets and the success they have achieved in making recoveries under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002.
The minister has also lined up a series of meetings with the heads of all Indian financial institutions and a few training institutions in the banking sector like the National Institute of Bank Management and the College of Agricultural Banking over the next one month.
The non-performing assets of state-owned banks is pegged at around Rs 60,000 crore and has become a cause for concern as their financial health hinges on the recoveries they make.
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Banks, in addition to the new avenue available under the Ordinance, are currently taking recourse to the Debt Recovery Tribunals (DRTs), filing suits in various courts, and using persuasion/ compromise to recover their outstanding dues.
The Indian Banks Association (IBA) will host the meeting of the minister with PSB chiefs. The other items on the agenda include addressing the problem of banks falling short of meeting the 18 per cent target for agriculture advances; looking into the possibility of extending sub-prime lending rate credit to small and medium enterprise (SMEs) that have a good track record of servicing loans; and reviewing the know your customer procedures in the context of money laundering fears.
Also to be diagnosed is the issue of tepid credit offtake and the impact of the lacklustre monsoon on the economy as a whole.
The minister will be holding a separate meeting with the chiefs of co-operative banks and zonal heads of Mumbai-based state-owned banks on the same day.