Ahead of the budget presentation next month, Finance Minister P Chidambaram is expected to ask the head of public sector banks tomorrow to focus on meeting credit targets. Besides, tomorrow's meeting is expected to deliberate on enhancing credit to the minorities and weaker sections and push the agenda of financial inclusion.

"Although the financial results for the third quarter are yet to come, the meeting of the bankers with the finance minister will take up the issue of their performance, credit to the priority sector, bad loans, financial inclusion and restructuring of some of the banks," said official sources.

Tomorrow's meeting will be the last one for Vinod Rai in his present capacity as secretary, Financial Services. Rai is scheduled to take the charge of Comptroller and Auditor General of India shortly.

The Finance Ministry is expected to strongly oppose the demand of some of the bankers to revise the credit targets downwards. In addition, the meeting is also expected to discuss the issue of managing non-performing assets, especially in the housing and retail sector. The steep rise in lending rates in the last two years has resulted in higher incidence of defaults, mostly in retail loans.

Chidambaram will also take stock of the number of new branches that banks will open by March. "RBI has given its approval for the branch licences. The finance minister may want to know the network pattern of banks," said a banker.

Lending to agriculture sector and packages for distressed farmers are some of the other issues that will be discussed in the meeting, he said, adding banks may ask to increase subsidy on agriculture loans from present 2% to at least 4%.