Enthused by the impact of new insolvency and bankruptcy law, the government expects bad loan recoveries to exceed the ₹1.80 lakh crore-target for the current financial year, an official said.
Some big accounts are in the process of getting resolved while some more are lined up for resolution under the Insolvency and Bankruptcy Code (IBC), a senior Finance Ministry official said.
“Going by the success rate, we hope that the recovery would exceed our target of ₹1.80 lakh crore through the IBC and other means,” the official said, citing the ongoing resolution of Essar Steel and Bhushan Power and Steel Ltd.
Banks hope to write back more than ₹1 lakh crore from the resolution of 12 NPA cases alone, recommended for insolvency proceedings by the RBI in its first list. Banks recovered ₹36,551 crore in the first quarter of 2018-19. In 2017-18, banks recovered ₹74,562 crore.
‘Rules have changed’
Satisfied with the progress of cases under the IBC, Finance Minister Arun Jaitley had said “now people have become broadly aware that the rules of the game in India have changed. The banks won’t chase you any more, you will have to chase them.”