NCLT route cannot be used effectively in all NPA cases: SBI Managing Director

SBI Managing Director P K Gupta today said banks should use the best available mechanism to recover bad loans and the NCLT route cannot be used effectively in all NPA cases.

Published: 13th October 2017 03:54 PM  |   Last Updated: 13th October 2017 05:50 PM   |  A+A-

Image used for representational purpose only. (Reuters)

By PTI

NEW DELHI: SBI Managing Director P K Gupta today said banks should use the best available mechanism to recover bad loans and the NCLT route cannot be used effectively in all NPA cases.

Indicating that one size fits all approach may not work in all cases, he said that basically, the NCLT (National Company Law Tribunal) is one of the resolution mechanisms.

"A lot of resolution mechanisms already are there -- the RBI scheme, an oversight committee," Gupta told reporters on the sidelines of a conference organised by the PFRDA here.

"The banks have to use what is the best mechanism in each particular case. The NCLT cannot be the solution for all cases." The banks that find it tough to recover loans from borrowers can refer such cases to the NCLT as part of insolvency proceedings.

A number of banks, including State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda and IDBI Bank, have initiated proceedings against defaulters by moving the NCLT to recover their dues.

The banking sector is saddled with non-performing assets (NPAs) of over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks (PSBs).

The Reserve Bank of India (RBI) has identified 12 large NPA accounts constituting 25 per cent or about Rs 2 lakh crore of the total pie.

Essar Steel, Bhushan Steel, Bhushan Steel and Power, Electrosteel Steel, Lanco Infratech, Alok Industries, Jyoti Structures and Jaypee Infratech are among the big names that are facing NCLT cases.

Stay up to date on all the latest Business news with The New Indian Express App. Download now

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.