FM cautions PSBs on risk lending, hike credit to minorities

New Delhi, Apr 19 (UNI) Concerned at the high asset prices, Finance Minister P Chidambaram today asked Public Sector Banks to exercise caution in lending to high risk sectors such as commercial real estate and capital markets, but enhance lending to minorities.

In a meeting with Chief Executives of PSBs, Mr Chidambaram sounded a note of caution on credit growth to these sectors and asked the commercial banks to moderate its growth.

The government seems to have been stung by the election bug with Mr Chidambaram asking the PSBs to open new branches in 103 minority-dominated districts.

The Finance Minister asked these banks not to raise bulk deposits at high costs, particularly in the month of February and March.

The Bank Heads told the Finance Minister that they have already initiated rebalancing of portfolios in the second half of fiscal 2006-07.

It was also critical, Mr Chidambaram said, that credit be provided at the right price.

''We have urged banks to open new branches in districts dominated by minorities and also asked the Banks to monitor flow of credit to them,'' the minister said.

Mr Chidambaram said district plans would give special emphasis on lending to minorities.

UNI