Addressing a press conference after a meeting with heads of public sector banks, he said, the Indian economy was not contracting like in many other countries but it is growing at a slower rate.
The Minister said government would soon finalise capital infusion for the PSU banks and the beneficiaries would include Indian Overseas Bank, Central Bank of India and Bank of Maharashtra. The government had proposed to inject Rs 15,000 crore of capital in the PSU banks.
As regards issuance of new banking licences, Chidambaram said he had written to the Reserve Bank to initiate the process of issuing guidelines and start accepting the licences pending approval of the Banking Regulation Amendment Act by Parliament.
Referring to problems of some sectors, he said, "Non Performing Assets (NPAs--bad debts) is a problem that is a reflection of the slowdown in the economy. This is a reflection of some sectors which are under stress. So we will have to look at it sector wise and try to find ways and means as to which sectors need help to recover.
"If the economy improves, growth improves and the sector will recover. But in the meanwhile we will have to do some handholding and try to help these sectors recover." MORE
