FM Nirmala Sitharaman likely to meet CEOs of PSU Banks on Saturday

Finance minister Niramala Sitharaman is scheduled to meet managing directors of public sector banks (PSBs) on March 25 for performance review in the backdrop of failure of few banks in the US and liquidity crisis faced by Credit Suisse.The meeting is going to take stock of the progress made by banks in achieving targets set for the various government schemes, including Kisan Credit Card (KCC), Stand-Up India, Pradhan Mantri Mudra Yojana (PMMY), and emergency credit line guarantee scheme (ECLGS) to help businesses affected by Covid-19, according to sources.This is the first full review meeting after the presentation of Budget 2023-24 and banks would be asked to focus on the areas highlighted by the Budget including credit flow to productive sectors.The finance minister would review credit growth, asset quality, and capital raising and business growth plan of banks for next financial year, the sources said, adding non-performing assets (NPAs) of Rs 100 crore and the recovery status would also be discussed.The meeting comes in the backdrop of global concern over failure of banks due to aggressive monetary tightening. The US Fed on Wednesday hiked interest rates by 25 basis points to tame high inflation despite the banking crisis. To fight the persistent hot inflation, the Fed has so far increased rates from zero to 4.75 to 5 per cent, all in just one year.Meanwhile, policymakers and experts have said that the Indian banking system is in good shape and can handle the situation caused due to monetary tightening.Various reforms undertaken by the government have resulted in significant improvement in asset quality of public sector banks with gross NPA ratio declining from the peak of 14.6 per cent in March 2018 to 5.53 per cent in December 2022.All PSBs are in profit with aggregate profit of Rs 66,543 crore in 2021-22, and that further increased to Rs 70,167 crore in the first nine months of the current financial year.