RBI meets bankers to discuss bad loans
The Reserve Bank of India meets heads and senior officials of various banks to discuss broad contours of tackling bad loans
Mumbai: The Reserve Bank of India on Tuesday met heads and senior officials of various banks to discuss broad contours of tackling the issue of stressed assets. The meeting was attended by heads of ICICI Bank, IDBI Bank, Axis Bank, HDFC Bank, Standard Chartered Banks and Canara Bank. Senior officials from State Bank of India (SBI) and Bank of Baroda were also present in the meeting held at the RBI office here.
“The focus of the meeting was on resolution of stressed loans. The RBI had sought our views and suggestions to tackle the bad loan problem. This is continuation of our past interactions with them (RBI),” a bank official said. When contacted none of the bankers were ready to divulge details about the meeting.
Earlier this month, the government gave wide-ranging legislative powers to the RBI to issue directions to lenders to initiate insolvency proceedings for the recovery of bad loans. It has also empowered the regulator to issue directions to banks for resolution of stressed assets.
Non-performing assets (NPAs) of banks have risen to about 17% of total loans, the highest level among major economies. They account for about 8.4% of the GDP, according to Credit Suisse.
The RBI also came out with a notification which clarified its powers under the NPA ordinance. It also talked about formation of oversight committees (OCs) under the RBI’s aegis and formation of independent committees to decide a framework for reference for the Insolvency Code (IBC).
Global rating agency S&P on Tuesday said credit profiles of the country’s banks are likely to remain weak for the next 12 months, with total stressed assets likely to rise to 15% of total loans by March 2018.