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There has been improvement in the bad loans of state-run banks, a senior finance ministry official said on Tuesday, adding that the government is now examining ways to help the banks raise fresh funding.
Economic slowdown and higher interest rates had made it tougher for companies to repay loans, leading to a steady growth in non-performing assets, especially among state-run banks.
Bad loans had come down "drastically" in the housing sector, Financial Services Secretary G S Sandhu said.
Stressed loans in India - those categorised as bad and restructured - total $100 billion, or about 10% of all loans. Fitch Ratings expects stressed assets to reach 14% of loans by March 2015.
