Finance Minister P. Chidambaram will meet heads of public sector banks on Thursday and review financial performance and credit flow to productive sectors in the light of subdued economic activity, among other issues.

The broad agenda of the meeting include review of first-half numbers, deteriorating asset quality, credit growth, official sources said.

Non-performing assets (NPAs) of banks have been on the rise for past several months due to slowdown in economy. Gross NPAs of some public sector banks, including State Bank of India, Punjab National Bank and Central Bank of India, have crossed 4 per cent of total assets at the end of September, 2012. The meeting will also dwell upon steps to increase credit flow to micro, small and medium enterprises, farm sector, infrastructure and housing sector, they added. The meeting will be held in the backdrop of the half-yearly review of monetary policy by the Reserve Bank of India (RBI) wherein central bank left benchmark interest rate unchanged on concern of inflation. However, it reduced cash reserve ratio by 0.25 percentage points to infuse additional liquidity of around Rs.17,500 crore into the system.

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