Money & Banking

Jaitley hints at sectoral intervention to tackle banks’ bad loan issues

Our Bureau New Delhi | Updated on January 22, 2018 Published on November 23, 2015

Finance Minister Arun Jaitley

jaitley

RBI, govt moving to improve situation



At the second-quarter performance review meeting of public sector banks (PSBs), Finance Minister Arun Jaitley is understood to told bankers that the government was willing to consider sectoral interventions to stressed sectors such as steel and aluminium.

Monday’s meeting also saw discussions around “specific banks” (about five) that are facing difficulties on the asset (loan) quality front. “Results will not come overnight. The problems of each sector have to be addressed separately. The series of steps announced by the RBI will help improve the asset quality situation. The government on its part has also been taking proactive steps in certain sectors,” Jaitley told reporters after a nearly three-hour-long meeting with chief executives of PSBs here on Monday.

Asked about “wilful defaulters” and banks’ willingness to take action, Jaitley asserted that PSBs already had the required “authority” and “autonomy” to effectively deal with each of their debtors. He also said the ability of banks to get failed borrowers to exit will increase if the bankruptcy law gets enacted in Parliament soon.

The Finance Minister expressed confidence that the asset quality of the PSBs would “improve significantly” in a “reasonable time” on the back of a series of steps announced by the RBI and being implemented by several banks.

Jaitley said part of the problem of the “unacceptable level of NPAs” could be attributed to the “pressures of the past”, which need to be removed.

The meeting also saw Secretary-level representation from several ministries and government departments, including MSME, Agriculture, Housing and Urban Poverty Alleviation, Food Processing, Rural Development, Textiles and Solar Energy. “The Secretaries made presentations on the requirements of their sectors as far as PSBs were concerned and the type of synergies between banks and the departmental needs”, Jaitley said.

Published on November 23, 2015
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