Banks fear that increased lending to agriculture may result in high non-performing assets and affect their performance.
Finance Minister Pranab Mukherjee will review the annual performance of public sector banks in different sectors including flow of agriculture credit and micro, small and medium enterprises (MSMEs) credit among others in a meeting with their heads in New Delhi on Friday.
Finance Ministry in a statement said, "The Finance Minister will do the annual review of public sector banks' performance in different sectors including flow of agriculture credit, micro, small and medium enterprises (MSMEs) credit, disbursement of housing loans and education loans among others."
The government has set a target to provide Rs.4,75,000 crore credit to agriculture sector in the current fiscal, as against Rs.4,46,778.98 crore in the previous year.
In fiscal 2010-11, the total credit to the sector exceeded the target by 19 percent. Total agriculture credit in 2010-11 was Rs.4,46,778.98 crore against the budget target of Rs.3,75,000 crore.
Banks fear that increased lending to agriculture may result in high non-performing assets and affect their performance.
Mukherjee will also review the deposits, advances, gross non-performing assets (NPAs), net profit and capital adequacy ratios of the public sector banks where he will also discuss the issues of infrastructure lending, implementation of interest subsidy schemes for housing the urban poor and lending to minority communities will also be discussed.
Banks have identified 72,950 villages for providing facilities and bringing them in the overall banking network. Of these, 29,569 villages were covered 2010-11 and remaining 43,381 villages are to be covered during the current fiscal.
Public sector banks have to cover 23,023 villages and regional rural banks 18,760 villages in the current fiscal, while 1,386 villages will be covered by private banks and 212 villages by cooperative banks.
The performance of banks in the field of financial inclusion will also be assessed, along with their financial inclusion plan for 2011-12, the statement said.
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