At India Economic Convention organised by India Foundation, Parekh said the country needs $1 trillion in the 12th Plan of which 47 per cent was to come from private sector, but it has not happened in the first two years of the Plan period.
Concerned over surging non-performing assets in banks, the banker said ‘as we speak, 11 banks have NPAs of over 5 per cent’.
In absolute terms to be about 4 lakh crore (4 trillion) of which about would be required to be written off.
Majority of this NPA comes from infrastructure sector, he added.
To deal with such situation, banks need more capital.
But banks, he said, has ‘inherent problem’ in raising equity as government's capital infusion is ‘inadequate’.
For current fiscal govt infused Rs 14,000 crore (Rs 140 billion) in PSU banks and has earmarked Rs 11,200 crore (Rs 112 billion)
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