Lenders have suggested reducing the government’s holding in state-run banks to below 51 per cent, the Finance Ministry said on Saturday after a two-day banking retreat. Prime Minister Narendra Modi’s administration last year approved a plan to pare the government’s stake in state lenders to up to 52 per cent to help them meet their capital needs. The state-run banks recorded the highest level of stressed loans at 12.9 per cent in September last year, while the same ratio for private sector banks was at 4.4 per cent, according to central bank data. Top bankers had gathered here to discuss long-pending reforms vital to improving the health of ailing public sector banks in Asia’s third-largest economy.
Financial Services Secretary Hasmukh Adhia said the government would ‘positively’ look at the recommendations by bankers.