NPA resolution: PMO takes stock of progress
The Prime Minister’s Office reviews the progress in resolution of non-performing assets a week after the RBI identified 12 accounts for insolvency proceedings
Latest News »
- GE Energy Financial Services to invest $90 million in RattanIndia’s solar power assets
- Chandrababu Naidu launches ‘Mana Amaravati’ app for plot owners to reach out to investors
- Teacher training in India set for a regulatory overhaul
- How virtual reality, augmented reality are making sports livelier
- IRDA identifies 6 insurers to take over Sahara India Life Insurance
New Delhi: The Prime Minister’s Office on Monday held a stock taking meeting with senior officials of the ministries of finance and corporate affairs to review the progress in resolution of NPAs in the light of recent action taken by the Reserve Bank of India (RBI) on stressed assets.
Prime minister’s additional secretary P.K. Mishra had a review meeting on resolution of non-performing assets (NPAs) or bad loans which have reached unacceptably high level, people familiar with the matter said.
It was a regular stocking meeting on issues related to NPA resolution, the people familiar with the matter said, adding that various measures to tackle rising bad loans were discussed. The banking sector is saddled with NPAs of over Rs8 lakh crore, of which Rs6 lakh crore is on the books of public sector banks (PSBs).
Ministry of corporate affairs secretary Tapan Ray, who also holds additional charge as secretary, department of economic affairs, and financial services secretary Anjuly Chib Duggal were among the senior officials present at the meeting.
The discussions covered preparedness of institutional mechanism, including that of National Company Law Tribunal (NCLT), to handle the resolution process. It is expected that the RBI is likely to come out with more measures to rein in NPAs and share a possible timeline to bring them down to the acceptable level.
The RBI last week identified 12 accounts for insolvency proceedings with each of them having over Rs5,000 crore of outstanding loans, accounting for 25% of total NPAs of banks. These 12 accounts, having NPAs of about Rs2 lakh crore, would qualify for immediate reference under the Insolvency and Bankruptcy Code (IBC).
The RBI had set up an Internal Advisory Committee (IAC), comprising a majority of its independent board members, to advise it with regard to the cases that may be considered for reference for resolution under the IBC.
IAC, the apex bank said, arrived at an objective, non- discretionary criterion for referring accounts for resolution under the IBC. In particular, the IAC recommended for IBC reference of all accounts with fund and non-fund based outstanding amount greater than Rs5,000 crore, with 60% or more classified as non-performing by banks as of 31 March 2016.