After financial institutions, the finance ministry has started reviewing the performance six public sector banks: United Bank of India, Uco Bank, Indian Bank, Dena Bank, Punjab & Sind Bank and Allahabad Bank.
Except Allahabad and Punjab & Sind Bank, the other four have been classified as weak banks and are under continuous monitoring by the finance ministry and the Reserve Bank of India.
The process of review started today with a meeting to review the performance of United Bank of India which was attended by finance secretary Ajit Kumar as also senior financial sector division officials.
The meetings are slated to be held till the next week and the banks have been asked to come with a an action plan to improve their performance.
In case of some weak banks, such as Dena Bank, the government has proposed that it submits a quarterly revival plan along with a report on the performance in the preceding three months as also the progress in implementing the revival plans.
Over the last fortnight, the finance secretary reviewed the performance of financial institutions : the Industrial Development Bank of India and ICICI. The institutions also discussed their business targets for the current financial year as also their plans to reduce NPAs and their borrowings and loan disbursal programmes.
The meetings come in the wake of the crisis which has gripped the financial sector over the last few months.
First, the Unit Trust of India (UTI) temporarily put a freeze on sale and repurchase of its flagship US 64 scheme and then the government had to step in to provide a Rs 1,000 crore financial assistance to beleaguered IFCI along with FIs, banks and insurance companies which are stakeholders in the institution.
Around the same time Dena Bank's chairman and managing director was hauled up for the poor performance of the bank which became a weak bank.
