Finance Minister Arun Jaitley's review meeting with the CEOs of PSU banks on Monday was expected to create a turnaround roadmap on how banks can become part of the India growth story.
Be frank and upfront about the non-performing asset (NPA) situation, speed up course correction and become part of India's growth story - that's the message Finance Minister Arun Jaitley gave to the top bosses of public sector banks at a meet in Delhi on Monday
The NDA government which has initiated several stress relieving measures for sectors, conveyed a subtle message to banks that the NPA situation should start a downhill course soon.
Speaking on the NPA issue after the meet, Mr Jaitley said, "Government believes that the NPA situation has risen due to sectoral stress. We must support the banks fully so that their ability to support growth remains sound. The bright spot is that the operating profit of banks today is in excess of 1.4 lakh crore."
Mr Jaitley added, "Three point focus is to empower banks legally to chase defaulters, protect bonafide borrowers and create solution oriented steps."
Mr Jaitley's review meeting with the CEOs of public sector banks on Monday was expected to create a turnaround roadmap on how banks - facing nearly 3.6 lakh crore worth non-performing assets - can become part of the India growth story
The meeting is a first since defaulter Vijay Mallya left India frustrating the efforts of public banks to recover Rs 9000 crore he owes them and also after the government put in place measures like the bankruptcy bill to help the banks. The meet took place against the backdrop of second consecutive quarter of rising losses reported by PSU banks.
The government after this meet has given enough indication that it is not shying from hand holding the distressed banks but also indicated that it is impatient for a turnaround.
Mr Jaitley said enough provisioning has been done against the NPAs last year. 'The losses due to provisioning was Rs 18000 crore', he added.
The meet reviewed the stress faced by few sectors like steel, power, and infrastructure. The meeting was attended by the power minister Piyush Goyal. The Uday scheme aimed at pulling power discoms out of stress is the government's attempt to reduce the NPAs in the banking sector
Mr Jaitley said that the road sector under Mr Gadkari has registered a lot progress and the situation is easing. He mentioned that infrastructure and steel sectors are high on the distress list of banks.
The government while addressing the NPA issue also asked banks to focus on vigorous implementation of government's flagship schemes including the ones that deal with financial inclusion.
Banks are expected to clarify how much bad debts are still left on their balance sheets. Government feels the camouflaging the bad loans leads to inadequate measures to remedy the situation
The meeting ended with a perception that the NPAs have broadly climaxed.
The government now expects banks to use measures like the bankruptcy bill to fasten the recovery process. To ensure decision making in banks free of political pressure and interference, a protection mechanism for bank management is also on the cards.
Mr Jaitley said that the government will wait for the suggestions of the banks board bureau or BBB headed by former CAG Vinod Rai.
The discussion also included consolidation of banks. The government plans to reduce total number of banks from existing 27 to around 10.
The NDA government which has initiated several stress relieving measures for sectors, conveyed a subtle message to banks that the NPA situation should start a downhill course soon.
Speaking on the NPA issue after the meet, Mr Jaitley said, "Government believes that the NPA situation has risen due to sectoral stress. We must support the banks fully so that their ability to support growth remains sound. The bright spot is that the operating profit of banks today is in excess of 1.4 lakh crore."
Mr Jaitley added, "Three point focus is to empower banks legally to chase defaulters, protect bonafide borrowers and create solution oriented steps."
Mr Jaitley's review meeting with the CEOs of public sector banks on Monday was expected to create a turnaround roadmap on how banks - facing nearly 3.6 lakh crore worth non-performing assets - can become part of the India growth story
The meeting is a first since defaulter Vijay Mallya left India frustrating the efforts of public banks to recover Rs 9000 crore he owes them and also after the government put in place measures like the bankruptcy bill to help the banks. The meet took place against the backdrop of second consecutive quarter of rising losses reported by PSU banks.
The government after this meet has given enough indication that it is not shying from hand holding the distressed banks but also indicated that it is impatient for a turnaround.
Mr Jaitley said enough provisioning has been done against the NPAs last year. 'The losses due to provisioning was Rs 18000 crore', he added.
The meet reviewed the stress faced by few sectors like steel, power, and infrastructure. The meeting was attended by the power minister Piyush Goyal. The Uday scheme aimed at pulling power discoms out of stress is the government's attempt to reduce the NPAs in the banking sector
Mr Jaitley said that the road sector under Mr Gadkari has registered a lot progress and the situation is easing. He mentioned that infrastructure and steel sectors are high on the distress list of banks.
The government while addressing the NPA issue also asked banks to focus on vigorous implementation of government's flagship schemes including the ones that deal with financial inclusion.
Banks are expected to clarify how much bad debts are still left on their balance sheets. Government feels the camouflaging the bad loans leads to inadequate measures to remedy the situation
The meeting ended with a perception that the NPAs have broadly climaxed.
The government now expects banks to use measures like the bankruptcy bill to fasten the recovery process. To ensure decision making in banks free of political pressure and interference, a protection mechanism for bank management is also on the cards.
Mr Jaitley said that the government will wait for the suggestions of the banks board bureau or BBB headed by former CAG Vinod Rai.
The discussion also included consolidation of banks. The government plans to reduce total number of banks from existing 27 to around 10.
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