Finance Minister P. Chidambaram is likely to review and discuss issues around stalled projects in the economy when he meets chief executives of public sector banks here on Monday.

This assumes significance in the backdrop of the economy likely to post decade-low growth of 5 per cent in 2012-13. Chidambaram is confident the economy will return to over 6 per cent growth in 2013-14.

A number of projects in the road and power sector are facing regulatory bottlenecks such as land acquisition issues and environmental clearances.

Indications are that the Finance Minister will discuss with bankers these issues and see how the projects could take off or the banks’ exposures to such projects can be salvaged.

challenge of twin deficits

At this meeting, Chidambaram will also review the new projects besides undertaking an overall assessment of credit and deposit growth in the banking system.

Non-performing assets and its management by public sector banks are also expected to come under special attention, it is learnt.

The Indian economy is already challenged by the twin deficits (current and fiscal).

The recent budget saw some serious effort on the fiscal consolidation front, including a steep cut in plan expenditure.

Chidambaram is also likely to review banks’ exposure to the renewable energy sector. He may also discuss recent developments (money laundering allegations) in the top private sector banks of the country.

The country’s three largest private banks — ICICI Bank, HDFC Bank and Axis Bank – were recently accused of indulging in money laundering.

srivats.kr@thehindu.co.in

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