Arun Jaitley to chair high-level meet on bank NPAs tomorrow

The meeting, which will also be attended by Financial Services Secretary Anjuly Chib Duggal, will discuss ways of resolution of stressed assets urgently

PTI March 09, 2017 16:01:36 IST
Arun Jaitley to chair high-level meet on bank NPAs tomorrow

New Delhi: Finance Minister Arun Jaitley will chair a high-level meeting with Reserve Bank officials tomorrow to address the issue of non-performing assets in the banking sector.

Arun Jaitley to chair highlevel meet on bank NPAs tomorrow

Union Finance Minister Arun Jaitley. PTI

The meeting, which will also be attended by Financial Services Secretary Anjuly Chib Duggal, will discuss ways of resolution of stressed assets urgently, sources said.

While Chief Economic Advisor Arvind Subramanian had suggested setting up of a bad bank to deal with the problem of non-performing loans, Reserve Bank Deputy Governor Viral Acharya had floated the twin concept of Private Asset Management Company (PAMC) and National Asset Management Company (NAMC) for resolution of stressed assets.

As on September 30, 2016, gross NPAs of public sector banks rose to Rs 6.3 lakh crore as against Rs 5.5 lakh crore at the end of the June quarter.

This works out to an increase of Rs 79,977 crore on a quarter on quarter basis. Last month, Subramanian had said the idea of setting up a state-owned asset reconstruction company (ARC) or bad bank to deal with mounting NPAs is gaining traction and needs to be created quickly.

The PAMC plan, as suggested by Acharya, could be for sectors such as metals, construction, telecom, and textiles, where the assets will have economic value in the short run.

As per the plan, the banking sector may be asked to restructure about 50 large stressed exposures in these sectors by December 31, 2017.

The NAMC plan could be viable for sectors where the problem is not just of excess capacity but of economically unviable assets in the near term.

Updated Date:

also read

Why role of institutional backing and credit in empowering women-owned enterprises is important
India

Why role of institutional backing and credit in empowering women-owned enterprises is important

Women entrepreneurs belonging to low-income groups find it difficult to repay the loans even if they have low interest rates, due lack of awareness, guidance or gender-specific solutions

Indian economy in recovery mode from COVID-19 crisis, says World Bank president David Malpass
Business

Indian economy in recovery mode from COVID-19 crisis, says World Bank president David Malpass

Malpass also said that India, which faces huge challenges of integrating more people into the formal sector economy and raising the earnings of the people, has made some progress but that's not enough.

Bihar movement: Meet the political luminaries who fought alongside Jayaprakash Narayan
India

Bihar movement: Meet the political luminaries who fought alongside Jayaprakash Narayan

To fight against Indira Gandhi’s government, Jayaprakash Narayan led the JP Movement from 1974 to 1975 which was initiated by students to fight corruption and misrule