Resolution of bad loans 'primary focus' of Modi govt: Principal Eco advisor

The RBI identified 12 biggest defaulters to initiate bankruptcy proceedings on Tuesday

A resolution of Indian banks' bad loans is the "first and primary focus" of the government, a senior finance ministry official said on Wednesday.

Sanjeev Sanyal, the principal economic advisor at the ministry, also told television channel CNBC-TV18 that state-run banks would be consolidated primarily on commercial considerations.

Sanyal's comments came a day after the Reserve Bank of India (RBI) revealed that it had identified 12 of the largest loan defaulters and would order lenders to start bankruptcy proceedings against them to start unclogging the $150 billion in bad debt plaguing Asia's third-largest economy. The 12 defaulters account for 25 per cent of the banking system's non-performing assets.