'Stressed Asset Banks Being Readied For Infra Lending Market'

Singapore: The process of resolving stressed assets of public sector banks in India has commenced, preparing them to bounce back into the infrastructure financing by March next year, a senior official of top banks governing body said on Wednesday. "We are accelerating the pace of resolving all stressed assets of public sector banks with a March 31, 2017, deadline," Vinod Rai, chairman of the Banks Board Bureau (BBB), said here. "We want banks to start lending at the earliest as unless Public sector banks lend to Infra related projects these projects cannot be kick started. "So, we want them in the lending market at the earliest and in the next year after having cleaned up their books of any stressed asset," Rai told PTI, stressing the urgency to revive the infrastructure financing by public sector banks as the momentum of trillion-dollar development picks up in India. BBB's two-man oversight committee has starting clearing process of non-performing assets also known as stressed assets at the 19 public sector banks while State Bank of India has started consolidation and merger of its five subsidiaries in a similar situation. "We are now working towards further consolidation of banks. We want the banks to resolve all stressed assets first before the government commences recapitalisation," said Rai who addressed the South Asian Diaspora Convention held July 18-19 in Singapore. The resolution process on non-performing assets must be rigorously followed, he stressed. "The worst is behind us as the recognition of stressed assets has taken place. Now it is a question of resolving what has been identified. Any delay will slow down the banks' return to the lending market," he said. "The level of stress assets is very substantial," Rai noted. He also noted the difficulties banks had faced after having lent during the global financial crisis from 2009 onwards, the delay in approval processes of big ticket infrastructure projects and, in some cases, poor appraisal of projects. But Rai wants to see a proper appraisal followed in future lending, by ensuring projects have all clearances, regulatory and statutory approvals. "We are hoping that as the economy revives the credit growth will pick up soon and certainly in early 2017," he said. "We are working closely with the Reserve Bank of India (RBI). We will advise RBI of new regulations and guidelines," he said, adding, "we think the lending process will become simpler, transparent, and credible"..(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

'Stressed Asset Banks Being Readied For Infra Lending Market'

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