FM prods RBI on bank licences, assures PSBs on budgeted capital infusion of R15,000 crore
Gross NPAs of PSBs grew by 0.98% (of advances) in September 2012 from a year earlier, Chidambaram said, but added that though this was a matter of concern, the situation was not alarming as yet given the state of the economy. Gross NPAs stood at 4% of advances in September 2012.
In his second meeting with PSB chiefs since he took over as finance minister in August, Chidambaram said a clutch of stressed sectors like infrastructure, steel, construction, telecom, textile and food processing needed hand-holding by banks. “RBI guidelines do not prohibit restructuring of accounts,” he said.
He said banks must support capex growth and bring costs of funds down to improve pricing and boost credit flows. The minister also asked banks to increase their focus on the small and medium enterprises and the farm segments.
While favouring interest rate cuts by the RBI, the minister said banks do not have much room to reduce interest rates as long as the prime lending rate is high. He said loan growth for housing and automobiles
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