RBI at advanced stage of preparing list of top loan defaulters: Arun Jaitley

Posted On Monday, 12 June 2017 12:26

rbiWith ordinance in place, Finance Minister Arun Jaitley on Monday said the RBI is at a fairly advanced stage of preparing a list of borrowers where NPA resolution is required under the insolvency law and action on this front is expected soon.

The ordinance was promulgated last month amending the Banking Regulation Act, 1949, to empower the Reserve Bank of India to resolve the thorny issue of non-performing assets (NPAs) or bad loans.

The government empowered the RBI to ask banks to initiate insolvency proceedings to recover bad loans and promised more measures to resolve the NPA problem.

"Under the new ordinance issued, the RBI is at a fairly advanced stage of preparing a list of those debtors where a resolution is required through the Insolvency and Bankruptcy Code (IBC) process. You will be shortly hearing about it ... The RBI is actively working on that," he said after meeting heads of PSU banks here.

"Consolidation of banks was not on the agenda as far as this present meeting is concerned. But I can tell you, we are actively working in that direction," Jaitley told reporters.

He left no one in doubt that the Centre will not be part of a state's fiscal leverage in waiving farm loans and the cost has to be borne by the states.

This assumes significance against the backdrop of farm debt waiver announced by the Maharashtra government on Sunday even as farmers in Madhya Pradesh were up in arms demanding relief.

The finance minister pointed out that a few top bankers expressed apprehensions about the infrastructure available for enforcement under the NPA ordinance. He, however, did not go into the specifics.

According to RBI Deputy Governor SS Mundra, who was present, the ordinance on NPAs essentially involves 2-3 components.

"One of the important components was to enhance the size and scope of oversight committee. Also, the identification of the accounts which can be actively taken up under the process. So, on the second point, an internal advisory committee is constituted by the RBI," Mundra said.

RBI is discussing it, he said, adding that information has been collected from banks on certain large accounts, for which some additional details are being sought.

"So, there's active work going on it. I think soon some of the action points will emerge from that," he said.

News source: TOI

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