The public sectors banks have been directed by the government to present a report on the home loans sanctioned by them since December 15th, 2008.

The PSU Banks had declared a soft interest rate package for the home loans to Rs 20 lakh on December 15th. The package was announced by the banks on government's behest to enhance the demand in the sector.

As per the package, home loan up to Rs 5 lakh were given at 8.5% and loans between Rs 5 lakh and Rs 20 lakh were extended at 9.25% but bankers say that despite of the concessional rates, home loan demand has not picked up. Moreover loans under the package were offered with a free property insurance cover.

A senior executive with a PSU bank said, "The flow of home loans has not picked even after the special package as there is a perception that real estate prices will fall further. Banks have explained this to the finance ministry, but it has asked for fortnightly data."

The banks have been asked to present the details of all incremental lending and borrowing activities for the past three years.

The bank chiefs are likely to meet the finance minister Pranab Mukherjee on Monday, February 2nd. Sources said that the meeting will include a review of credit flow and the status of implementation of the packages announced for enhancing the economic activity in the country.

"The meeting will analyze the cost of funds after the measures announced by the Reserve Bank of India over the last four months as the government is trying to push for another round of rate cut. So, they have asked for detailed data," a bank executive said.

According to the latest data provided by the RBI, banks year-on-year growth of home loans has declined from 13.9% in August 2008 to 8.8% at the end of December 19th, 2008.

The data has also revealed that the credit flow for the PSU banks have increased to 28.6% for the year up to January 2nd, 2009 as compared to 19.8% in the year up to January 4th, 2008. On the other hand, data show that the credit growth from private and foreign banks has declined substantially and this shift has been attributed to the high delinquencies following which the private banks scaled down their lending.