Finance Minister Arun Jaitley on Friday said the government will make efforts to find resources to support banks as they struggle with bad loans, Reuters reported. He assured lenders of all help they need from the government.
At a conference of Indian bankers, Jaitley called stressed assets a concern for the economy and said, “The government will always be there to provide resources to banks.”
The finance minister is also hopeful that the new bankruptcy law will help deal with the crisis of non-performing assets, which are also known as bad loans.
India’s public sector banks have nearly Rs 6 lakh crore in non-performing assets. Bad loans rose by more than Rs 1 lakh crore in the first nine months of the last financial year to Rs 6.07 lakh crore by December 31, 2016. The gross non-performing assets of these banks stood at Rs 5.02 lakh crore at the end of March 2016, up from Rs 2.67 lakh crore at the end of March 2015.
In August, public sector banks wrote off a record Rs 81,683 crore in bad loans for the 2016-17 financial year.