Banks need greater initiative to sell assets: FM on bad loans

New Delhi: Describing the NPA situation of public sector banks as still challenging, Finance Minister Arun Jaitley today said "greater initiative" is needed by them in cases where it is difficult to find buyers or "alternative promoters" for assets that have accumulated bad loans.

Finance minister Arun Jaitley

Finance minister Arun Jaitley

"One of the challenges which the banks did mention that they are facing...to find alternative promoters or buyers. They have been making efforts to do that," he said after meeting the heads of PSU banks here.

The minister also expressed the hope that once situation improves, banks will be able to pass on full benefits of RBI's rate cuts to the customers.

He further said that the Reserve Bank will take into the account the decline in retail inflation while deciding on interest rates at its policy review meeting on October 4. Elaborating on the non-performing assets (NPAs) of public sector banks (PSBs), Jaitley said both the government and RBI have taken several initiatives and legislative measures including enactment of the Bankruptcy law, changes in the Sarfaesi Act and DRT.

"Therefore with these effective steps, the banks will now have to take the intivative...the NPA situation is certainly not either static or permanent," he said.

Gross NPAs of the PSBs have surged from 5.43 per cent (Rs 2.67 lakh crore) in 2014-15 to 9.32 per cent (Rs 4.76 lakh crore) in 2015-16 of the total advances.

With regards to challenges in finding alternate investors for bad assets, Jaitley said: "I think one of the points which was emphasised was that in some cases it has to be done with a greater initiative and if necessary...the lead bankers with the support of the department of financial services would also do the coordination for that purpose (selling of NPA)."

Banks should also keep in their mind the larger interest of the economy while selling assets, he said, adding that asset sale should not stop or paralyse the running establishments because that may itself lead to waste of the investment and also result in job losses.


Updated Date: Sep 16, 2016 17:10 PM

Also Watch

Social Media Star: Abhishek Bachchan, Varun Grover reveal how they handle selfies, trolls and broccoli
  • Monday, July 16, 2018 It's a Wrap: Soorma star Diljit Dosanjh and Hockey legend Sandeep Singh in conversation with Parul Sharma
  • Monday, July 16, 2018 Watch: Dalit man in Uttar Pradesh defies decades of prejudice by taking out baraat in Thakur-dominated Nizampur village
  • Monday, July 16, 2018 India's water crisis: After govt apathy, Odisha farmer carves out 3-km canal from hills to tackle scarcity in village
  • Sunday, July 15, 2018 Maurizio Sarri, named as new Chelsea manager, is owner Roman Abramovich's latest gamble in quest for 'perfect football'

Also See