New Delhi, July 01 (ANI): India is drawing up a comprehensive package to help state-run banks, said junior Finance Minister Jayant Sinha on Wednesday (July 01), as part of efforts to nurse them back to health and improve the flow of credit to industry. State lenders, which dominate India’s banking system, were hit hard by a surge in bad loans after a slowdown in economic growth following the 2008 global financial crisis. Stress tests carried out by the Reserve Bank of India (RBI) showed that gross non-performing assets (NPAs) as a ratio of total loans could rise to 4.8 percent by September from 4.6 percent in March, before dipping to 4.7 percent by March 2016. The last week, the RBI blamed rising bad loans for making lenders reluctant to pass on cuts in interest rates to borrowers and approve new loans. Sinha said he would meet banks over the next two days in Bangalore to fine-tune their capital-raising plans. The government has also agreed to inject about $3 billion into the banks this fiscal year and could double that amount next year to shore up their capital.
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