Finance ministry is set to review the extraordinary performance of the public sector banks on June 25 at a meeting of chief executive officers of these banks.

The meeting assumes significance in the context of some banks making a beeline to return the government's capital, thereby bringing down its stake, which can be cut up to 51 per cent.

Few banks are planning to have a second public float, while those who have not yet hit the market are planning initial public offerings.

Of the 19 nationalised banks, Uco, UBI, Central Bank, Bank of Maharashtra and Indian Bank have not yet tapped the market.

The exceptional performance of banks was based on two income streams -- higher treasury and interest incomes. They made money in the debt market as bond yields plunged and prices shot up.

Despite the fall in interest rates, interest income was big enough as the fall in deposit rates has been sharper than the fall in lending rates.

The performance review will focus on areas such as priority lendings, including agriculture and small scale industry. The banks will be asked to increase their exposure to these areas.

Most banks have posted record net profits in fiscal 2003 on the back of massive treasury income. The big four -- Canara Bank, Punjab National Bank, Bank of India and Bank of Baroda -- have recorded very good profits.

Among the weak banks too, some of the results have been spectacular. For instance, Indian Bank has posted a 470 per cent rise in net profit -- from Rs 33 crore (Rs 330 million) in fiscal 2002 to Rs 188 crore (Rs 1.88 billion) in fiscal 2003.

The Kolkata-based UBI has raised its net profit by 156 per cent -- from Rs 119 to Rs 305 crore (Rs 1.19-Rs 3.05 billion). Barring a few, most of the banks have strengthened their capital adequacy ratio with Corporation Bank topping it at 18.5 per cent against the Reserve Bank of India-stipulated 9 per cent.