Recently, the union asked the state-run banks to step up the industry lending considering the industry demand for funds. As reasoned, the move would help in infusing liquidity and credit flow in the economy. Now, it is expected that the government may direct the private and foreign banks to take a move on the similar lines.

The recapitalisation of base and increase in industry lendings by the private and foreign banks are some of the issues expected to be discussed in the pre-budget meeting between the finance minister and top executives of the public banks. It is also expected that banks may be asked to stress on infrastructure sector lending.

In recent past, banks have been abstaining from industrial credit exposure considering the economic slowdown and associated fears of the loan slippages. During the last fiscal, there was only a marginal increase in the industry advances made by the private and foreign banks, 10 percent and 4 percent respectively.

During the FY08-09, private banks have seen rise in NPAs. The gross and net non-performing assets of 13 private banks have increased by a 36.5 percent and 36.1 percent respectively during the period.

The lending portfolios of the private banks mainly have retail advances, when compared with the loan assets their public peers.