Finance Minister Arun Jaitley will meet the heads of public sector banks and take stock of the NPAs of individual lenders on Tuesday. He is also expected to discuss ways for early resolution of bad loans and stressed assets.
Since this is a part of the annual meeting with bankers, the finance minister is also expected to discuss credit growth with the lenders, their annual performance and various recovery measures to expedite NPA recovery.
Lenders have already made a cash recovery of Rs 36,551 crore in the first quarter of the current fiscal. This is 49% higher than the same quarter of the last fiscal. During 2017-18, banks recovered Rs 74,562 crore, top sources in finance ministry said.
Jaitley is also expected to discuss with the lenders the status of rural lending and loans to MSMEs. The government is under tremendous pressure to increase lending to small and medium businesses to bring them back to health after they suffered a severe blow post 2016 demonetisation.
The meetings comes close on the heels of the government deciding on the merger of three PSU banks – Vijaya Bank, Dena Bank and Bank of Baroda. The Board of Dena Bank Monday approved the merger but the NPAs of the three entities combined is expected to be Rs 80,000 crore.
Sources said some discussion will also be held on the recapitalisation plan in the wake of the mergers. The government has committed Rs 2.11 lakh crore for recapitalisation of PSBs and the fund has to be allocated by March 2019.