Chidambaram also asks these not to rush for bulk deposits to bloat balance sheets.
High inflation continues to be an obstacle in lowering policy rates as of now.
Standard & Poor's on Wednesday lowered the stand-alone credit profile of two government-owned lenders- the State Bank of India and Union Bank of India citing concerns over their asset quality and high credit cost.
Move significant as new banking licences under his purview.
The Reserve Bank of India (RBI) has asked banks not to treat Kingfisher Airlines' brand as collateral since it is intangible. This is because the loan has turned non-performing for most of the banks.
Seek easing of asset classification guidelines for better credit flow.
The sources said the ministry had agreed with the RBI's views that at a time when the country had a high fiscal deficit, the move might not be appropriate.
Banks' loans are set to grow at the slowest pace in a decade this financial year, as companies continue to shy away from borrowing in the current uncertain macro-economic environment.
The government is expected to wait till January for announcing its higher borrowing requirement for the financial year, instead of incorporating it in the second half loan calendar to be issued later this month.
The yields on the US Treasuries that are used as a benchmark for pricing dollar-denominated bonds eased providing relief on overall pricing.
In a recent communication to the bank chiefs, the ministry has said all such loans to the corporate sector can be sanctioned only after board approval and need to be backed by securities within six months of sanctioning, failing which the loan would need to be phased out.
It had asked govt banks to reduce these and certificates of deposits to a combined 15% of total deposits
With the Reserve Bank of India (RBI) allowing people to receive money more than twice a month from abroad, the companies facilitating transfer services are set to cash in, too.
Lender to acquire 30% after existing shareholders divest stake
According to sources, the central bank is keen on such a scheme to attract foreign exchange, as the country's reserves have seen a depletion in the wake of a weakening domestic currency.
Ministry says capital infusion if loans extended only to productive sectors
In absolute terms, close to 9.2 million customers (almost equal to Mumbai's suburban population) have defaulted on loan repayment. Microfinance institutions currently have around 32 million clients in the country.
High crude oil prices, which the central bank perceives as a risk to inflation, may limit the extent of rate cut to 25 basis points rather than 50 bps, economists said.
SBI keeps IDBI waiting for proposal to set up infra development fund
In January, banks had rejected SBI Caps' initial proposal on Air India's debt recast, which suggested converting a part of the carrier's debt into cumulative redeemable preference shares, with an eight per cent dividend.
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