Vladimir Putin, the Russian Prime Minster, has reacted to news that bad debts have tripled to 6% since the beginning of 2009 with a request to increase lending by at least $16 billion.

Speaking at a government meeting at which all the bank chiefs were present, Putin said the banks’ loan portfolios for the coming year should increase by at least 150 billion roubles in July, by a further 150 billion roubles by 1 September and by 1 October, there should be a total of between 400 and 500 billion roubles in fresh loans.

The announcement followed news from Russia’s largest lender, VTB, revealing that the proportion of bad debt in its credit portfolio had increased to 6% this year and that its provisions for bad loans may result in it facing losses for the year. “The absence of a loss this year is unlikely,” said the bank’s chief executive, Andrei Kostin, at VTB’s annual general meeting.