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.
Without naming the defaulters, RBI said the banks will be asked to initiate insolvency proceedings to recover the dues.
After a 10-day strike by agriculturists demanding loan waivers among other things, the Maharashtra government on Sunday announced they will write off the loans of small and marginal farmers. Also, the identification of the accounts which can be actively taken up under the process.
RBI Deputy Governor SS Mundra said an internal advisory committee had been constituted to help the central bank “identify accounts” that needed to be referred for the IBC process.
Mr Mundra informed 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”. He also stressed that an action on such cases is expected soon. “There was already about 81 cases that has been filed under the IBC.of these 81 cases, 18 cases initiated by the financial creditors are already before the National Company Law Tribunal (NCLT) and since bulk of the NPAs 70% are either in a consortium or multi-banking arrangement, the speedy resolution for them is required”, Jaitley said. “We will see the issue of resolution moving forward”, the Finance Minister said.
“Banks are making their best efforts through the infrastructure that is available to them. It is not related to banks alone”, he clarified. While, Andhra Pradesh and Telangana have also demanded for waiving farm loans.
PSBs collectively recorded a stable operating profit of Rs 1.5 lakh crore in 2016-17 but net profit stood at just Rs 574 crore in the last fiscal after meeting provisioning requirements, Jaitley said.
State-run banks made a net profit of 5.74 billion rupees ($89.2 million) in the year ended March 31, Jaitley said.The banks had reported a net loss of 179.93 billion rupees in the year which ended in March 2016, compared with a net profit of 378.23 billion rupees the previous financial year, according to government data.
The government also reviewed the PSBs’ preparedness for rolling out the goods and services tax (GST) regime from July 1. Fin sector get own cyber security With banks raising serious concerns over cyber security, the government is looking at the possibility of a separate computer emergency response team for the financial sector.