The Finance ministry has asked public sector banks (PSBs) to follow stricter monitoring of top corporate loan accounts amid a banking crisis in the US and Europe.

The PSBs have also been asked to make adequate provisions for pledged shares of big corporates.

"Bankers were told that it would be prudent to increase stress-testing of large corporate loan accounts," a banker at a state-run bank said.

Banks were also asked to monitor the mark-to-market impact on their trading books amid rising interest rates and maintain their liquidity ratios, the sources added.

The finance ministry also emphasised that it would be prudent to increase stress-testing of large corporate loan accounts, PTI quoted sources as saying.

As reported earlier by Indianbankingnews.com, Finance Minister Nirmala Sitharaman had asked state-run banks to remain vigilant about the interest rate risks and regularly undertake stress tests.

In a meeting with chiefs of PSBs in New Delhi on 25 March, lenders were asked to identify stress points, including “concentration risks and adverse exposures”.

Under the current financial turbulence in the US and Europe, the finance ministry feels that it would be prudent for PSBs to increase stress-testing of large corporate loan accounts.

Banks were also asked to monitor the mark-to-market impact on their trading books amid rising interest rates and maintain their liquidity ratios, Reuters reported quoting sources.

The collapse of some U.S. regional banks have led to concerns about lenders globally having to field possible losses on their held-to-maturity portfolios.