(a) whether the Government has advised the Public Sector Undertakings (PSUs) to park their
surplus funds with nationalized banks without competitive bidding;
(b) whether this directive would effect their interest earning; and
(c) if so, the details oflosses suffered and the steps taken in this regard?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PAWAN KUMAR BANSAL)
(a) to (c): In order to avoid undesirable competition amongst banks leading to arbitrary hikes in
deposit rates, which have consequences for the economy, and considering the need to moderate the
cost of credit in the current economic circumstances, the Government has advised the Central
Public Sector Enterprises (CPSEs) to place their surplus funds with the banks without resorting to
competitive bidding. Though, this may lead to decrease in interest earning of some CPSEs, the move
is likely to benefit the economy at large, including the borrowing CPSEs, due to over-all
reduction in cost of funds.