Union Minister of State for Finance Anandrao Adsul said the restructuring of IDBI will be better facilitated if the Maharashtra government, Centre and the bank jointly worked towards clearing their joint liability on the Dabhol Power Company.

"Even if non-performing assets of the IDBI on the DPC front can be delineated and removed from the books of IDBI's liability, IDBI will transform into a fiscally much more sound institution. But the Maharashtra government will have to take a more active role for this to be achieved," Adsul said.

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He said a review of the performance of bank lendings in the priority sector in various states undertaken recently revealed that while states such as Tamil Nadu, Andhra Pradesh and Karnataka exhibited banks financing even above the 40 per cent stipulation states such as Maharashtra and Gujarat were lagging behind.

Adsul said, "There are thousands of self help groups having good experience in the field that are working towards helping below poverty line (BPL) families to move up in the economic front."

"However, in states such as Maharashtra even the 18 per cent of this 40 per cent priority sector lending that is stipulated for the agricultural sector is not being adhered to. The basic problems encountered here relates to the inordinate delays in gaining sanctions and disbursements by the applicants," he added.

He added that while loan applications have to be processed with a fortnight the process actually took two to four months in reality.

"Similarly, we have come across instances where the banks are seeking collateral security from BPL families."

"How, can a BPL person provide collateral and why should he when it is not prescribed? During the review we also noticed that the 50 per cent government subsidy that is due to the loanee (person taking the loan) is not being released to him," Adsul said.

Criticizing the Maharashtra government for raking up a controversy over the 'rail surcharge' issue Adsul said that: "The fact was that under the Mumbai Urban Transport Project when the first installment of Rs 75 crore (Rs 750 million) was disbursed, the state was supposed to match this with its share towards the project cost."

"However, Maharashtra approached the Union government saying that it was not in a position to do so while asking us to impose a surcharge on railway passengers to raise this additional money. When we did so, the state government is politicising the issue."