Mumbai: Having recognised the huge non performing asset (NPA) pile by "biting the bullet", the banking system is now poised for a better future and support the credit needs of the economy, interim finance minister Piyush Goyal said on Sunday.
"Our banking system is now poised for very good times ahead," he told reporters on the eve of Asian Infrastructure Investment Bank (AIIB)'s maiden annual summit being held here, when asked about the two meetings he had with bankers on dud loans resolution.
"Prime Minister (Narendra) Modi believes that it is important to bite the bullet, and finance minister Arun Jaitley has brought out the truth before the nation," said Goyal, who is holding charge at North Block during Jaitley's absence following a kidney transplant, said referring to the actions on non performing assets (NPAs) in the recent past.
It can be noted that the Reserve Bank of India's (RBI) asset quality review has led to the recognition of a huge pile of NPAs hidden on bank books which is worth over 40 per cent of the system-wide bad loans. This was followed by steps on resolution of stressed assets, including the passage of the Insolvency and Bankruptcy Code (IBC).
Crediting Jaitley for the ongoing NPA clean-up, he said the banking system is now strengthened to once again start becoming a powerful engine of growth, financing the infrastructure and other credit needs of the economy.
It can be noted that in recent times, concerns have been raised over the ability of the banking system, 70 percent of which is dominated by state-run lenders, to support the credit needs of the economy as provisions for the bad assets drain capital buffers, leaving little for lending.
"There is a lot of enthusiasm among bankers to lend to particularly small, medium entrepreneurs (SMEs) and other small businesses. They are very keen to participate in the growing infrastructure story in the country," he said.
Updated Date: Jun 25, 2018 09:09 AM