The meeting, which is the second of its kind since April, is a part of the annual financial performance review exercise conducted for all public sector banks
Finance Minister Arun Jaitley will meet heads of public sectors banks (PSBs) on September 25 and discuss a number of issues, including the progress made in bringing down non-performing assets (NPAs) on their books.
The meeting, which is the second of its kind since April, is a part of the annual financial performance review exercise conducted for all public sector banks. The first meeting was held in June.
The Indian banking sector has been grappling with mounting non-performing assets and a host of scams and frauds for some time now.
Here's all you need to know about what could go down the meeting:
First meet after merger announcement
Jaitley's meeting with PSBs will be the first one after the Centre's announcement about plans to merge three state-owned lenders -- Bank of Baroda (BoB), Vijaya Bank and Dena Bank -- with a view to create a global-sized lender, which will be stronger and sustainable.
The meeting will happen against the backdrop of the 'Alternative Mechanism' (AM). Reports had earlier suggested that the government was planning to merge Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and Andhra Bank. This merger could be announced before the end of this year.
Discussion on bad loans
The finance minister will also discuss credit growth and the issue of NPAs with the lenders. Discussion on recovery measures taken by banks and legislative steps taken by the government to expedite recovery are also part of the agenda.
Financial performance review
At the meeting, the FM will review review the annual financial performance of PSBs, credit offtake in the economy, priority-sector lending and progress made under various social sector schemes, including the Centre's Pradhan Mantri Jan Dhan Yojana (PMJDY) and Atal Pension Yojana (APY).
The cumulative loss of state-owned lenders crossed Rs 87,357 crore in 2017-18, with fraud-hit Punjab National Bank (PNB) topping the chart with a loss of nearly Rs 12,283 crore for the fiscal. PNB was followed by IDBI Bank on the list.
Only two of the 21 PSBs -- Indian Bank and Vijaya Bank -- had reported a profit in 2017-18. Indian Bank posted a profit of Rs 1,258.99 crore for the fiscal while Vijaya Bank registered a profit of Rs 727.02 crore.
In June, Jaitley had held a similar meeting with heads of PSBs, and conducted a discussion on the issue of NPAs and a review of steps taken by state-owned lenders to expedite recovery of bad loans. In all, the Indian banking sector is dealing with bad loans of over Rs 6 lakh crore at the moment.With PTI inputs