The finance ministry may soon call for a meeting with bankers to discuss recapitalisation.

 The meeting will be an attempt to prevail upon banks to lend more funds to push demand at a time when GDP growth has hit a three-year low of 5.7 per cent in the Q1 of the current fiscal, followed by the probability of a dim Q2.

Under part of a series of measures to stimulate economic growth, the move to inject funds in the stressed out banks under heavy NPAs has been doing the rounds. Finance minister Arun Jaitley has admitted it in as many words. Sources said that apart from giving a stimulus, this needs to be addressed as a stand-alone issue and the ministry is seized of the matter.

 Last week, Jaitley discu­ssed this subject as part of an overall economic stimulus with ministry officials and other ministers.

“Some recent data raises certain concerns... and a lot of it has to do with the capacity of the banks, particularly PSBs, and therefore we are in the process of discussion and very shortly whatever is required to be done in order to improve the environment in terms of policy, we’ll certainly react to it”, he had said after discussions with the departmental secretaries in ministries.

The Narendra Modi government had in the Union budget outlined a provision of Rs 10,000 crore for recapitalisation of public sector banks in FY18.

As part of a fiscal stimulus package, there are possibilities that the ministry of finance may top up the budgeted Rs 15,000 crore banks fund infusion with an additional Rs 25,000 crore, sources said, adding they would also be asked to submit their version of handling the recapitalisation issue.

Recently Viral Acharya, the deputy governor of the Reserve Bank of India, pushed for recapitalising the banks, linking it to the economic crisis in many countries because of lack of capital with the banks, which affected their lending capacity, rendering them dormant.

India's growth is directly proportional to the adequ­ate capitalisation of public sector banks, he had said. The bank recapitalisation could be either done by the Reserve Bank of India or by issuing recap bonds to avoid fiscal deficit slippage.