The overall gross NPAs in the banking sector stood at 4.1 per cent at the end of December 2013, according to Icra. Gross NPAs of public-sector lenders stood at 5.17 per cent, up from 4.82 per cent as of end-September.
ICICI Bank's managing director and CEO Chanda Kochhar said NPAs have risen owing to factors outside the control of banks. According to her, it is time to hand-hold intrinsically viable projects.
Rajan said India is going through a period of turmoil, but now growth seems to be stabilising.
India's economic growth is officially projected to be below five per cent for the second year in a row in 2013-14.
Kochhar said the economy has bottomed out and that there is a need to bring back investment.