“We have received letter from the finance minister two days ago indicating time-limit for processing of loans,” a senior public sector bank official told PTI.

According to the official, maximum limit for sanctioning or rejecting loans of any kind has been fixed 90 days after receiving application. Usually each bank has its own turn-around-time (TAT), within which loans are required to be processed, another official said. The direction from the finance ministry will standardise the TAT, the official added. The government has issued directions to give a boost to the economic activity. The country’s economic growth slipped to 18-month low of 7.7 per cent from 8.8 per cent in the first quarter of the current fiscal.

At the same time, the factory output stood at 8.8 per cent in June. Despite high interest rates, credit offtake from banks grew by 20.7 per cent to over Rs 41 lakh crore during the one-year period ended August 26, 2011.

According to the Reserve Bank of India data, credit offtake during the period was Rs 41.70 lakh crore as against Rs 34.54 lakh crore in the 12 months ending August 27, 2010.