The rise in bad loans at Indian banks is 'unacceptable,' finance minister P Chidambaram has said, adding he expects their non-performing assets (NPAs) to reduce when the pace of economic growth picks up.
Indian state-run banks' credit growth has been "satisfactory" and is expected to remain so for the rest of the fiscal year, while housing loans have shown a "very healthy" growth, P Chidambaram told reporters on Tuesday.
A slowing economy has adversely affected the demand for credit and led to a rise in bad loans at Indian banks. Net NPAs to net advances ratio of state-run lenders slipped to 1.8% at end-March 2013 from 1.5% a year earlier.
Rising bad loans have made banks more wary in lending, impeding the supply of domestic credit.