Expressing concern over mounting bad loans in the banking sector, Economic Affairs Secretary Shaktikanta Das today said the government is "fully engaged" in resolving the issue.
"Some challenges still remain. The banking sector and NPAs are the challenges and government is fully engaged on those issues," he said.
Gross Non Performing Assets (NPAs) of state-owned banks at the end of March quarter stood at 5.20 per cent.
NPAs have surged mainly due to stress in infrastructure sectors like highways, steel, power and state discoms.
Finance Minister Arun Jaitley last month had said present level of NPAs are unacceptable.
"An all-out effort has been launched to correct the health (of banks) and bring NPAs down. The effort by the bank administration, the effort by the government to infuse more capital, the effort to get more finance by divesting (government holding), and then greater discretion and more importantly addressing the concerns of each of (stressed) sectors.
"And I don't have a doubt that over the next few quarters, the banks will be able to address these challenges," Jaitley had said.
He had also said the government's plan to inject capital into the PSU banks over the next four years will "infuse lot of financial strength" in these banks to deal with the bad debts problem.
