Ahead of acting finance minister Pranab Mukherjee's meeting with public sector bank chiefs on Monday, the government has asked state-owned lenders to submit data on home loans sanctioned by them since December 15.

On December 15, the public sector banks had announced lower interest rates on home loans up to Rs 20 lakh (Rs 2 million) following government intervention to boost demand.

Bankers acknowledge that despite a reduction in interest rates to 9.25 per cent for loans up to Rs 20 lakh (Rs 2 million) and 8.5 per cent for home loans up to Rs 500,000, the response has been lukewarm. Interest rates under the package are fixed for five years and the loans come with a free property insurance cover.

"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," said a senior executive at a public sector bank.

Mukherjee is filling in for Prime Minister Manmohan Singh who had to undergo heart surgery over the weekend. While the agenda for the quarterly meeting with bank chiefs has not been circulated, source said that it will include a review of credit flow and the status of implementation of the packages announced for boosting economic activity. The meeting comes days before the Parliament session and barely a month before the election process starts.

The public sector banks have also been asked to submit the details of all incremental lending and borrowing activities, not only for recent months but for the last three years.

"The meeting will analyse the cost of funds after the measures announced by the Reserve Bank of India [Get Quote] 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 on sectoral credit deployment by banks released by the central bank on Monday, on a year-on-year basis the growth in the total flow of housing loans dropped to 8.8 per cent at the end of December 19, 2008, from 13.9 per cent at the end of August 2008.

The year-on-year non-food gross bank credit growth also fell from 26.8 per cent at the end of August to 24.8 per cent in mid-December. But data also revealed that public sector banks have seen a 28.6 per cent rise in credit flow for the year up to January 2, 2009, as against 19.8 per cent in the year up to January 4, 2008. In contrast, the growth in credit flow from private and foreign banks has dropped sharply despite demand shifting from equity and overseas markets to the Indian banking system.