FM may ask state banks to ensure 20% loan growth

Finance minister Pranab mukherjee may tell state –owned banks to ensure a loan
growth rate of 20% so that it can help the economy to grow at 8-9%, He is going
to meet with bankers on Saturday (14 august) to review their performance and
see whether they have achieved the given target on various financial parameters
which is also known as statement of intent (SOI). At the end of every year the
performance of every bank is revived and those banks who have achieved all the
targets receive full bonus, while those who have not achieved all but partial target
receives partial bonus.

Last fiscal many banks did not achieve their credit and deposit target this issue
may be discussed in this meeting.

Mr.Mukherjee had indicated if the economy has to grow at 8-9% banks have to
ensure that the credit grows at 20%, last quarter credit rose at 21% because of
telecom industry as the telecom companies had to pay a huge amount to GOI as
license fee for 3G bid.

A new parameter is also included in SOI this time, that bank have to set target for
no frills account and number of villages they will cover this year.

In a related development this time each banks government nominee has been
told to make a presentation before 14 august to financial secretary about
performance of their bank so that finance ministry is well prepared for meeting
with bank chiefs.