Finance Minister Pranab Mukherjee will review the performance of all public sector banks next month after they announce financial results for 2010-11, a senior official said.

 

"We will have a review meeting next month with the finance minister...may be towards the end of May," Department of Financial Services Secretary Sashi Kant Sharma said after meeting the heads of public sector banks and financial institutions.

Tuesday's meeting discussed the performance of the banks on the various financial and social parameters set by the finance ministry, Sharma said. It also reviewed the level of financial inclusion achieved by the lenders.

The ministry aims to introduce banking services in 73,000 villages across the country in the first phase of the financial inclusion programme.

But the Reserve Bank of India's monetary policy actions and interest rates were not discussed at the meeting.

Speaking on the sidelines of the meeting, Chairman of State Bank of India Pratip Chaudhuri said interest rates should decline as they have stabilized now. He said the Reserve Bank would strike a balance between controlling inflation and promoting growth in its annual policy review next week.

"There are other ways to cool market, apart from interest rate hike and the central bank would balance the objectives of controlling inflation and sustaining growth," he said.

Chaudhuri said his bank plans to expand its operations in Australia. He said he is hopeful that the bank will launch Rs 20,000-crore rights issue this year. "We are in dialogue with the government," he said.

Chaudhuri ruled out the merger of any associate bank with the State Bank this year. "We will prefer to merge associate banks where SBI holds 100%, rather than where the holding is less," he said.

In the first amalgamation, SBI had merged the State Bank of Saurashtra with itself in 2008. The merger of State Bank of Indore followed in August last year.

SBI has five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

Earlier, SBI had informed a parliamentary committee that it plans consolidation of the remaining five associate banks with itself in the next 12-18 months. (ET)