State Bank of India worst hit followed by PNB
After giving out the number of crorepati tax assessees, the Finance Ministry has made public the details about loan accounts of over Rs 1 crore with public sector banks that are pending recovery. The amount in such accounts has increase by over 1.5 times during the last three years.
Finance Minister P. Chidambaram informed the Lok Sabha that the number of such accounts went up to nearly 7,300 at the end of March 2012. The amount involved in such accounts was around Rs 68,000 crore. The State Bank of India tops the list with the maximum number of such accounts as well as the maximum amount, followed by Punjab National Bank, IDBI Bank and Bank of India among others.
“The Government has advised PSBs (public sector banks) to take a number of new initiatives to increase the pace of recovery and manage NPAs (non-performing assets), which include appointment of nodal officers for recovery, to conduct special drive for recovery of loss assets, to put in place an early warning system, to replace the system of post-dated cheques with electronic clearance system (ECS) and to constitute a Board Level Committee for monitoring of recovery,” Chidambaram said in a statement, as a part of his reply.
Interestingly, the statement mentioned that the steps taken by the Government and the Reserve Bank of India had resulted in year-on-year improvement in recovery of NPAs by PSBs. It also said that the existing guidelines were sufficient to address the issue of NPA management. However, data given along with the statement do not support this view.
The statement also mentioned steps taken by the RBI, which include a robust mechanism for early detection of signs of distress, including prompt restructuring in the case of all viable accounts, to have a loan recovery policy that sets down the manner of recovery of dues and targeted level of reduction.
The steps also talked about norms for permitted sacrifice, waiver, factors to be taken into account before considering waivers, decision levels and reporting to higher authorities.
Some other measures included monitoring of write-off or waiver cases, valuation of properties including collaterals accepted for their exposures and taking legal recourse.