The government will coordinate with banks to improve the health of the state run banks, said finance minister Arun Jaitley today after the quarterly review of public sector banks.

The pressures of the past need to be removed, he said while raising the issue of bad loans or the NPAs (non-performing assets).

Arun Jaitley said that the bad loans in the banking sector will improve for the better and the government has proactively taken measures to remove the problems in stressed sectors.

"The Reserve Bank of India has also taken a series of steps to improve the quality of assets," he said at the three-hour review meeting attended by heads of all PSBs besides secretaries of various ministries including micro, small and medium enterprises, agriculture, textiles and rural development..

The gross NPAs rose to 6.03 per cent at the end of June, as against 5.20 per cent in March this year.

"There were several suggestions by bankers on steel and aluminium sector stress. The department of financial services, department of revenue and the commerce ministry will look into these suggestions," he said. “When we took assessment of certain sectors which had a higher level of NPAs, some particular defaulters which are common thread running across several banks did crop for discussion,” he said. The measures announced for the state power discoms will help ease some stress as the situation related to highways has improved, he said.

On the issue of wilful defaulters, Jaitley said that banks are empowered, and when the bankruptcy law gets passed the ability of banks to get failed creditor to exit will increase. "Even now banks have full authority and autonomy to deal with each of its debtor failure as any prudent banker would do.. ", Jaitley told reporters.

Jaitley, said that the government had discussions with banks and ministries on requirements of different sectors and synergies between banking sector and various government sectors such as requirements of agriculture sector.

On the low credit offtake despite the interest rate cut by RBI he said: "Credit offtake has to pick up. The steps of RBI and banks will improve quality of assets."

The meeting also saw discussion on investment in solar power generation besides performance of government's social security programmes in insurance, pension and banking.

The roadmap for the rest of the year was discusses for MUDRA bank, jan dhan yojana among others. Jaitley said that the government has received an overwhelming response to it social security schemes and there were discussions with bankers to further provide an impetus to these schemes.