For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts
Oneindia App Download

Arun Jaitley on Non Performing Assets (NPAs) in Banking Sector

By Lisa
|
Google Oneindia News

The Union Finance Minister, Arun Jaitley said that the Government has taken various measures to deal with the issue of Non Performing Assets (NPAs) in Banking Sector especially in case of Public Sector Banks (PSBs).

The Finance Minister said that there are two categories of defaulters, those who are unable to pay back due to economic slowdown both in domestic and global market and other reasons outside their control as well as wilful defaulters including loans sanctioned without due diligence by the banks.

arun jaitley

FM on NPAs in Banking Sector:

The Finance Minister said that the Government has taken various measures to deal with both these categories of defaulters. The Finance Minister Mr. Jaitley was making his Opening Remarks at the Second Meeting of the Consultative Committee attached to the Ministry of Finance on the subject: "NPAs in Banking Sector" here today.

The Finance Minister Mr. Jaitley further said that in order to deal with default due to economic slowdown, the Government has taken various measures to revive the stressed sectors which mainly include steel, textiles, power and roads among others.

Mr. Jaitley said that the Government has also done recapitalisation of banks by providing Rs. 25,000 crore in the last year Union Budget 2015-16 as well as in this year's budget 2016-17. He said that transparency and professionalism has been brought in appointment process for top management positions in the PSBs including Chairmen and Managing Directors.

He said the Government has taken various measures to make the management professional, has given full autonomy to the banks in taking commercial decisions without any interference from the Government.

FM on bankruptcy law:

The Finance Minister Mr. Jaitley said that Bankruptcy Law has been cleared by the Joint Parliamentary Standing Committee and is likely to be discussed in the current Budget Session of the Parliament.

The Finance Minister also said that SARFAESI Act and DRT Act have been amended to make the recovery process more efficient and expedient. The Finance minister said that wherever it was observed that number of cases in which action taken by the banks against guarantors for recovery of defaulted loans is insufficient, the Government has advised the banks to take action against guarantors in the event of default by borrowers under relevant Sections of SARFAESI Act, Indian Contract Act and RDDB & FI Act.

The Finance Minister said that a direction to this effect has been issued to the banks last month. The Finance Minister also highlighted the various measures taken by the Government for revival of stressed sectors such as steel, road, power and textile sectors among others.

Suggestions from the members:

Later the Members of the Consultative Committee gave their suggestions with regard to recovery of loans and bringing NPAs under control. Members suggested that there is need for bringing more transparency in the system and list of all the defaulters whose loans have been written off by the PSBs be made public.

They asked for exemplary action against the wilful defaulters so that others do not indulge in similar activities. Some members appreciated the Government's effort to make the appointment process for the top management positions of banks professional.

Some members also suggested that there is need for restructuring of agricultural loans in order to help the farmers. Members also suggested that there should be no employment cut due to any amalgamation or merger of banks.

Members asked the Government to ensure level playing field to all Indian entrepreneurs across the board. They suggested that due to wilful default by some prominent businessmen, others may not be considered and treated in a similar fashion.

Some members suggested that a committee be constituted to finalise recovery process in case of loans given to big corporate houses by various PSBs.

For Daily Alerts
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
X