Prime Minister Narendra Modi's administration last year approved a plan to pare the government's stake in state lenders to up to 52 per cent to help them meet their capital needs.
The 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 RBI data.
India's top bankers had gathered in Pune to discuss long-pending reforms vital to improving the health of ailing public sector banks in Asia's third-largest economy.
Financial Services Secretary Hasmukh Adhia said the government will "positively" look at the recommendations by bankers.
Copyright @ Thomson Reuters 2015