NEW DELHI: Taking a grim view of the mounting bad loans in public-sector banks, Banks Board
Bureau (BBB) chief Vinod Rai has written to the government expressing concerns about the tardy progress made by state-owned lenders in resolving their non-performing assets (NPAs).
In his letter to Finance Minister Arun Jaitley and the Prime Minister’s Office, Rai suggested a roadmap to resolve the NPA issue. The Banks Board of Bureau was set up by the government last year to monitor the governance of public-sector banks.
The gross NPAs of public-sector banks is said to have increased to Rs 6,06,911 crore, even as the total stressed assets of scheduled commercial banks stood at Rs 9.64 lakh crore as on December 31, 2016.
Recently, SBI Chairperson Arundhati Bhattacharya had also stated how asset quality continued to be a concern for the bank because of some of the loans, which were given out during the boom years. She had also attributed it to a slower pace of credit growth, which was adding to NPAs, owing to challenges in the farm sector after the demonetisation move.
As part of the measures to resolve the situation, Rai suggested expansion of the Oversight Committee to provide guidance under available mechanisms, including deep restructuring, Joint Lenders Forum and Strategic Debt Restructuring.
The government has reportedly asked the PSBs to take up forensic audits of the top 50 defaulters of the bank, in order to get a realistic picture of the genuine cases of business failures to the ones where funds have been fraudulently diverted.
The finance minister had said last week that RBI had set up an Oversight Committee to look into the cases referred by different banks. Jaitley had also held a meeting with officials concerned to look into the various possible ways in which the issue of stressed assets could be resolved in the public sector banks. RBI Governor Urjit Patel and two deputy governors S S Mundra and Viral V Acharya were also part of this meeting.
Bad loans of public-sector banks have risen by Rs 1 lakh crore between April and December 2016-17. Majority of these loans concern with the infrastructure sector including the power, steel, roads and textiles.