Indian FinMin for reform in banking sector

PUNE, India, Jan 3 (Reuters): India needs to "conceive" several reforms in the banking sector, Finance Minister Arun Jaitley told reporters on Saturday on the sidelines of a two-day banking retreat.

Jaitley added that there is a need to give greater autonomy to banks and that non-performing loans in some cases was "unacceptable".

"There is a need to get the best talent into the system. There is a need for far greater autonomy being given to them (state-run banks)," Jaitley told reporters in the western city of Pune.

India's state-run banks recorded the highest level of stressed loans at 12.9 per cent of their total advances in September last year, while the same ratio for private sector banks was at 4.4 per cent, according to central bank data.

India's top bankers have gathered in Pune to discuss long-pending reforms vital to improving the health of ailing public sector banks in Asia's third-largest economy.

Another report adds: India's top bankers have gathered in the western city of Pune in a one-of-a-kind huddle to discuss long-pending reforms vital to improving the health of ailing public sector banks in Asia's third-largest economy.

The country's more than two dozen inefficient state-run banks have been constrained by a pile of bad loans and corporate governance issues. They also lag their private sector rivals in profitability.

For years, political interference and union opposition have thwarted major reforms. Many industry observers remain sceptical about big changes being implemented in the near future, especially with the economy still recovering from its worst slowdown since the 1980s.

If reformed, however, the country's mega state lenders offer investors the best exposure to any sustained upswing in India's economy.