Union Minister Piyush Goyal (Photographer: Anindito Mukherjee/Bloomberg)

Finance Minister Piyush Goyal To Meet Heads Of State-Owned Banks On Monday

Finance Minister Piyush Goyal will meet the heads of public sector banks Monday to take a stock of the banking sector, and discuss ways to improve their financial health, sources said.

The meeting assumes significance as it comes just three days ahead of the budget 2019-20, the last from this government before the general election in April-May.

The full-day meeting is likely to be attended by Reserve Bank of India Governor Shaktikanta Das, who is going to announce his first monetary policy review on Feb. 7.

Goyal, who was given additional charge of the Finance Ministry last Wednesday as Arun Jaitley is in the U.S. for a treatment, is his expected to discuss a host of issues including credit offtake and bad loan position of lenders.

Among the key issues, sources said, the meeting will review progress of various schemes of the government being implemented through the government. It will also review the credit flow to MSMEs, agriculture and retail sectors.

Besides, sources said, the meeting will also review financial performance of the banks for the nine months ended December 2018.

Non-performing assets would also come up for deliberation, they added.

Public sector banks have seen decline in bad loans by over Rs 23,000 crore from a peak of Rs 9.62 lakh crore in March 2018 due to various initiatives taken by the government.

At the same time, PSBs have also made a record in recovery of Rs 60,726 crore in the first half of the current financial year, which is more than double the amount recovered in the corresponding period last year.

According to the latest Finance Ministry data, non-NPA accounts overdue by 31 to 90 days (Special Mention Accounts 1 & 2) of public sector banks have declined by 61 percent over five quarters—from Rs 2.25 lakh crore as of June 2017 to Rs 0.87 lakh crore in September 2018.

In his first stint as finance minister for 100 days last year, Goyal was instrumental in setting up a committee headed by non-executive chairman of Punjab National Bank Sunil Mehta to examine whether creation of an asset reconstruction company or asset management company to help in faster resolution of stressed assets.