More steps in offing to empower banks to recover bad loans: Jaitley

February 12, 2016 03:53 pm | Updated November 17, 2021 04:47 am IST - New Delhi

Amid mounting NPAs of public sector banks, Finance Minister Arun Jaitley on Monday said the government is considering more steps to empower banks to recover bad loans and the problem will be contained soon.

“The bankruptcy law is under active consideration. The government is also considering some further steps to empower banks to be in a position to recover these monies (non-performing assets). I think it’s a problem which will soon come under control,” he said.

Observing that there is a problem of NPAs, he said “these are the loans, which have earlier in point of time given by these banks and as a part of prudent policy it has been considered the balance sheets should be transparent. The banks are going to take all steps possible to recover the loans from debtors.”

He said Reserve Bank through various policies have empowered banks to recover NPAs.

As on September, the gross NPAs of PSBs have increased to Rs. 3.01 lakh crore as against Rs. 2.67 lakh crore in March.

Pointing to some over reactions to reports in the section of media with regard to the state of the public sector banks, the Finance Minister said, “in any case the volume and extent of the problem should not be exaggerated so as to lead to any panic.”

On Thursday, Reserve Bank Governor Raghuram Rajan also assured that there won’t be a repeat of the asset quality review (AQR) that has shaved off banks’ bottom-lines and the resultant battering of banking stocks and the massive erosion of investor wealth.

“We do not envisage a sequence of AQRs,” Rajan had said.

Using a medical jargon to impress the need for such a review, Rajan said a “deep surgery” is needed to clean up and the process of recognising the NPA is akin to an “anesthetic” needed for the procedure.

With regard to capital needs of state-owned banks, Jaitley said “the government is fully committed to support public sector banks by providing whatever capital requirements are there because these banks have played very important role in supporting the Indian economy and their support is also required for supporting further growth.”

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.