"Other initiatives include sanctioning of fresh loans on the basis of information sharing amongst banks and conducting sector-wise analysis of NPAs."
New Delhi, July 9 - India's Economic Survey for 2013-14 Wednesday urged the government to revive the core stressed sectors which have high exposure to banks.

The survey has identified five sectors including infrastructure, iron and steel, textiles, aviation and mining as highly stressed sectors in its financial stability report of 2013.

The survey said that the PSBs (public sector banks) have very high exposures to these stressed sectors which have become a major cause for the increase in NPAs (non performing assets) of the PSBS.

The survey pointed out that the aggressive lending by PSBs in the past to these sectors in a time period which the survey refers to as 'good times' coupled with a general economic slowdown is causing the rise of NPAs.

Asset quality in the banking system has deteriorated in the post-crisis years and among bank groups, PSBs had the highest level of stress in terms of NPAs and restructured advances, the survey which was presented in the Lok Sabha Wednesday by Finance Minister Arun Jaitley said.

The survey also highlighted some recent initiatives to address the rising NPAs which includes a thrust on recovery of loss-making assets and designating asset reconstruction companies (ARC) resolution agents of banks.

Other initiatives include sanctioning of fresh loans on the basis of information sharing amongst banks and conducting sector-wise analysis of NPAs.

Close watch on NPAs by picking up early warning signals and ensuring timely corrective steps by banks including early detection of signs of distress, amendments in recovery laws and strengthening of credit appraisal and post credit monitoring, are some other steps, the survey added.


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