Goldman Sachs, the sixth-largest US bank by assets, is in talks with US treasury officials to pay back the $10 billion it received from the US government's Troubled Asset Relief Programme (TARP) last year.

The bank had more than $100 billion of cash and liquid assets on its balance sheet at the end of November, according to its annual results.

But before doing so, the bank has to wait for the government mandated ''stress test.'' which is expected to be completed by the end of April. Nineteen of the largest US banks will soon undergo government stress tests to assess their ability to handle the economic downturn, and their need for more capital.

Some other major banks, including JPMorgan Chase, which received $25 billion, are also hoping to return cash soon. Bank of America chief executive Kenneth Lewis has said the largest US bank could repay TARP money this year if the economy cooperates. Morgan Stanley chief executive John Mack told Congress he wants to repay that bank's $10 billion infusion as soon as possible.

The treasury department's $700 billion TARP was intended to provide lenders with more capital to spur lending and improve the economy.

The government cash, however, comes with limits on executive pay and increasingly intense public scrutiny of its business practices. By repaying the TARP capital, Goldman and other banks would also escape compensation caps and other burdens that came with the investment.

Goldman was not in trouble when it received government money last year. However, in October 2008, it was forced to accept a direct infusion of taxpayer money by the former Treasury secretary Hank Paulson to instill confidence in the US government's support to the banking system.

Hundreds of companies have taken TARP money, ranging from $45 billion accepted by both Citigroup Inc and Bank of America Corp.

Many banks do not want the government looking over their shoulder, an analyst said. "Many of these banks also get upset getting painted with the same brush as larger investment banks that caused some of the problems."

A payback would follow the furore over bonuses paid by American International Group Inc, and news that Goldman had received $12.9 billion of AIG bailout money because it was a counterparty to the insurer. (See: Failed AIG's bonuses to employees draw flak). 

There are reports that Goldman Sachs may sell part of its 4.9 per cent stake in China's largest bank, the Industrial and Commercial Bank of China. Its stake is worth around $8.5 billion, based on ICBC's market capitalisation of about $178 billion. Goldman Sachs bought its initial ICBC shares in April 2006 for $2.58 billion.

Analysts, however, have opined that Goldman Sachs should retain its interest in the Chinese stake given the current economic scenario and the fact that other US players have sold off their stake in Chinese lenders.

The global economic crisis has not taken a big toll on Chinese banks, which have posted cumulative after-tax profits of yuan583 billion, or $85.23 billion, in 2008, up by 31 per cent year-over-year, according to a government release late February.

Goldman Sachs in December reported its first quarterly loss since going public in 1999, hurt by highly disappointing results at its trading and principal investments business.

The bank reported negative net revenues of $1.58 billion for the fourth quarter, compared to positive $10.74 billion in the same quarter last year.

Meanwhile, President Barack Obama is expected to meet with about a dozen top bankers on Friday, including the chief executives of JPMorgan Chase, Goldman Sachs and Citigroup.

Obama is expected to discuss his administration's efforts to bolster the financial system at the meeting.

The meeting will likely include discussions about the restrictions that the government has attached to its billions of dollars of financial assistance to banks, a move that has raised concerns among bankers.

Shares of Goldman Sachs fell by $1.33, or 1.19 per cent, to $110.60, on the New York Stock Exchange on Tuesday, after the stock rose 15 per cent during Monday's rally.