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Financial sector regulators to meet tomorrow to discuss economic situation

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New Delhi:  Finance Minister P Chidamabram has called a meeting of all financial sector regulators tomorrow to review the current macroeconomic situation.

The Finance Minister will chair the full Financial Stability and Development Council (FSDC) meeting tomorrow, sources said.

The meeting comes against the backdrop of tapering of Quantitative Easing (QE) in the US, and the Reserve Bank revising the current financial year's growth projection to less than 5 per cent.

Last week, the US Federal Reserve decided to cut its bond purchases further by another $10 billion. It has decided to purchase $65 billion per month of mortgage backed securities and longer-term treasury securities as against $75 billion per month earlier.

The meeting, the last one before the general election due in May, among other things is likely to deliberate on steps to promote GDP growth, which grew by 4.6 per cent in the first half of 2013-14.

In order to record 5 per cent growth in the full fiscal, the economy has to expand by 5.4 per cent in second half.

However, the government revised downward GDP growth for 2012-13 to 4.5 per cent as against earlier prediction of 5 per cent.

Besides, the Council would also deliberate on mounting Non-performing assets in state-owned banks.

NPAs or bad loans of public sector banks rose by 28.5 per cent from Rs 1.83 lakh crore in March, 2013 to Rs 2.36 lakh crore in September last year.

Total NPAs had gone up to Rs 1.37 lakh crore in March, 2012 from Rs 94,121 crore in March, 2011. The amount of NPAs in September 2013 was more than double of what it was in March 2011.

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