Fixing public sector banks | Montek Singh Ahluwalia10 min read . Updated: 24 Jun 2016, 10:06 PM IST
If we want to ensure healthy growth in the economy, we need to ensure that the public sector banking system can restart lending
Banking sector stress in India has emerged as one of the critical risks which could jeopardize growth. There is good reason to worry. Our banks are saddled with too many non-performing loans and credit expansion has slowed dramatically. Growth in industrial credit (year on year) has slowed to less than 5% in the first quarter of 2016. This is clearly not consistent with even 7.5% gross domestic product (GDP) growth, let alone accelerating to 8%.
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