Vinod Rai Writes To Jaitley, PM's Office On Bad Loans, Suggests Roadmap

New Delhi: Expressing concerns over mounting bad loans, Banks Board Bureau (BBB) Chief Vinod Rai has written to Finance Minister Arun Jaitley and Prime Minister's Office underlining the tardy progress made by state-owned lenders in resolving the issue of Non Performing Assets. The former CAG, in a letter marked to Principal Secretary to Prime Minister Nripendra Misra, has also suggested a roadmap to wriggle out of the NPA problem being faced mainly by public sector banks (PSBs), official sources said. The letter, they said, has suggested expansion of ambit of Oversight Committee to provide guidance under other available mechanisms, including deep restructuring, Joint Lenders Forum (JLR) and Strategic Debt Restructuring (SDR). Bad loans of PSBs rose by about Rs 1 lakh crore during the April-December period of 2016-17, the bulk of which are accounted for by the infrastructure sector -- power, steel, roads -- and textiles. Jaitley last week held a high level meeting with senior officials, RBI Governor Urjit Patel and two deputy governors S S Mundra and Viral V Acharya to deliberate on the ways to resolve stressed assets in the banking sector. Gross NPAs of public sector banks increased to Rs 6,06,911 crore while total stressed assets (gross non-performing assets and restructured standard advances) of scheduled commercial banks were Rs 9.64 lakh crore as on December 31, 2016. As of September-end, the banks' total stressed loans were Rs 8,97,000 crore. This is a 7.5 per cent growth in stressed loans from September to December-end. Earlier this week, Jaitley had said the RBI has set up an Oversight Committee to look into process of the cases referred to it by the different banks. "Seeing the response and its performance, the government is considering multiplication of such committees," he had said. BBB was set up as an advisory body by the government last year to recommend on the appointment of directors at PSBs and advise on ways to raise funds and merger and acquisitions to the lenders among other things. Last year, the government expanded its role to also help banks in their capital raising plans and develop business strategies. As part of its extended role, the board was entrusted with the task of advising the government on extension of tenure or termination of services of the board of directors in state-run banks and financial institutions..(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

Vinod Rai Writes To Jaitley, PM's Office On Bad Loans, Suggests Roadmap

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