Banking Act amendments to help resolve NPAs, says Ashok Lavasa
Finance secretary Ashok Lavasa says amendments to the Banking Regulation Act will help in effectively resolving the bad loans problem
New Delhi: Amendments to the Banking Regulation Act would help in effectively resolving the bad loans problem, finance secretary Ashok Lavasa said on Thursday. “It is not possible for me to put down a number on how this (non-performing assets or NPAs) will go down but certainly we feel that these changes will make the system more effective in handling the bad loans,” he said.
The Cabinet on Wednesday approved promulgation of an ordinance to amend the Banking Regulation Act for resolution of the NPA crisis. Lavasa said on the back of professionalism that exists in the country’s banking system and with the participation of the promoters themselves, “we should be able to reach resolution in many of the cases”.
The amendments would enable regulator Reserve Bank of India (RBI) and lenders to take effective steps to deal with problem of NPAs, he said. After discussing the issue with stakeholders, the government came to the conclusion that some changes were necessary in the statute to effectively deal with mounting bad loans in the banking sector, he said.
Lavasa, however, did not disclose the details of the proposed amendments. He further said there is enough appetite in the market to buy stressed assets. “We should not judge the capacity that is there in the market because people do have appetite for investment in the Indian market.
India is probably one of the best destinations for investment at this point of time,” he added. He further said the NPA situating has not worsened in the recent past and there has been marked improvement in some of the infrastructure sectors like power and road.