indo-asian news service, New Delhi, June 11: Following his meeting with the Reserve Bank of India governor Raghuram Rajan, finance minister Arun Jaitley is expected to take up the matter of banks passing on the central bank’s earlier rate cut benefits to borrowers when he meets heads of public sector banks Friday.
The meeting Thursday was the finance minister’s first meeting with the governor after the RBI, last week, reduced its short-term lending rate from 7.5 per cent to 7.25 per cent.
“These are all usual meetings which we have. Nothing special. Broad range of issues were discussed. Lot of issues were discussed,” Rajan told reporters after the meeting. “We have voiced whatever we had to say at the monetary policy,” he added.
In three separate cuts this year, the RBI has reduced the repo rate, at which it lends to commercial banks, by 0.75 per cent. But not all the banks have passed on the benefit of lower interest rates to customers.
Jaitley’s meeting with bank heads Friday will also review the banks’ credit off take and the progress made under the Jan Dhan Yojana and other social security schemes, an official source told IANS.
The source said the finance minister would also take up the issue of non-performing assets (NPAs), or distressed loans, and discuss ways to contain these. Gross NPAs of state-run banks have gone up to Rs 260,531cr as on December 2014.