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Finance Minister P Chidambaram today said that the model code of conduct will not affect the bank licence process.
Reviewing the quarterly performance of PSU banks, Chidambaram said that NPAs are the biggest challenge for state-run banks, adding that their bad loans are expected to be slightly higher by March-end from a year earlier.
FM said that banks recovered bad loans worth Rs 18,933 crore during April to December.
Rising bad loans especially among state-run banks has become a key concern for lenders where recently a state-run lender, United Bank of India, saw a huge surge in its non-performing loans, triggering worries over its capital needs. Chidambaram said he will discuss United Bank's NPAs with the RBI.
He also added that the Cabinet, FIPB will continue to clear projects in normal fashion.
