Government to support stressed sectors; recapitalise banks: Chidambaram
15 November 2012
The government is working on a strategy to ''handhold'' industry sectors, including the banking and financial services sector that are reeling under the impact of the economic slowdown so that the economy is brought back to its true potential, finance minister P Chidambaram said today.
He said the downturn is reflecting on the rising non-performing assets (NPAs) of banks and the government will have to look at sectors that are impacting banks' performance so as to find ways and means to help them.
''NPA is reflection of the slowdown in the economy,'' Chidambaram said on the sidelines of a meeting with the heads of public sector banks in New Delhi.
''If the economy improves and growth improves, the sectors will recover. But, in the meanwhile, we will have to do some handholding and try to help these sectors recover,'' he added.
NPAs of state-run banks have increased 0.98 per cent over the one-year period ended 30 September 2012, mainly on account of the stress in sectors like infrastructure, steel, construction, textiles, food processing and telecom infrastructure, he pointed out.
However, the minister said, the housing and automobile sectors continue to do well despite the overall slowdown in the economy.