Finance minister P Chidambaram on Thursday said the government was ready to 'handhold' certain sectors hit by the economic slowdown and suggested that banks must restructure loans to help growth as the state of bad loans was not alarming.
Sectors such as infrastructure, steel, construction, textiles, food processing and telecom infrastructure were particularly under stress, he said, as he sought special measures to help them.
"In fact, (RBI guidelines) allows for restructuring of an account and a bit of handholding to help the sector or industry or the unit to tide through this difficult period,.." he said after a four-hour meeting with the chiefs of public sector banks.
The minister has been pushing for lower interest rates, but the Reserve Bank of India has been holding on to a tight interest rate regime in view of persisting high inflation.
The minister indicated that state-owned banks were likely to hire 63,200 people in the current fiscal year. "There will be a huge job opportunity in the banking sector," he said.
The housing and automobile sectors have been picking up growth since banks cut interest rates, Chidambaram said, adding banks must lend to the "stressed" telecom sector too.
Non-performing assets of public sector banks rose by 0.98% in the 12 months to September 2012, and is about Rs. 117,000 crore at present, he said, adding that the finance ministry was working out a Rs. 15,000-crore capital infusion plan for banks.
NPA refers to loans that do not yield any return.