Chidambaram expects rise in bad loans of PSU banks

State-run banks' bad loans are expected to be slightly higher by March-end from a year earlier, Finance Minister P. Chidambaram said on Wednesday after reviewing their quarterly performance.

He added that banks recovered bad loans worth Rs 18,933 crore during April to December.

Rising bad loans especially among state-run banks have become a key concern for lenders in India where recently a state-run lender, United Bank of India, saw a huge surge in its non-performing loans, triggering worries over its capital needs.

Here are the highlights from Mr Chidambaram's press conference,

• High Non-Performing Assets (NPAs) and asset quality biggest issue for PSU banks. NPAs more accurate now than few years back; have asked banks to focus on recovery of NPAs.
• Credit growth higher in medium and small enterprises, realty, services sector; Medium industry credit growth negative. Agricultural credit growth satisfactory, will achieve target of 7 lakh crore by end of this year.
• Cabinet Committee on Investment (CCI) has cleared 297 projects worth Rs 6.6 lakh crore.
• Electoral code of conduct will not come in the way of issuing new bank licences.
• India's banking system very strong and robust. India has one of the highest Capital Adequacy Ratio in the world, 1 per cent higher than Basel norms.
• Government to revisit gold import duty after taking into account final Current Account Deficit figures.

(With inputs from Reuters)