Press Esc to close
Monday 26 January 2015
News updated at 3:50 PM IST
Weather
Max: 26°C
Min : 18°C
In Bengaluru
Sunny day

Take firm steps to recover loans: Chidambaram

Mar 18, 2013 PTI
Reuters

Concerned over rising bad loans, Finance Minister P. Chidambaram on Monday asked banks to take firm steps to recover loans saying the country cannot afford to have “affluent promoters and sick companies”.

“We wish banks take firm steps to recover NPAs. Promoters have to bring in additional money and companies have the duty to pay back loans,” Mr. Chidambaram said.

He was talking to reporters after meeting the heads of PSU banks and financial institutions here.

The Finance Minister said recovery has improved in the past one or two months and banks will take more steps to deal with the rising NPAs without hurting the industry.

“We cannot have an affluent promoter and a sick company. Promoters must bring in money ... Without doing anything that will kill the business of industry, banks will have to take steps to recover the NPAs,” he said.

Gross NPAs of PSU banks have risen from Rs. 71,080 crore as on March 2011, to Rs. 1.55 lakh crore as on December 2012.

He further said that stalled projects in sectors like power, coal, iron, steel and road transport is a matter of worry.

As many as 215 projects with an investment of Rs. 7 lakh crore are currently stalled and banks have disbursed about Rs. 54,000 crore loan towards it, Mr. Chidambaram said.

As far as new projects are concerned, he said, they are also in the same five sectors.

There are 126 new projects for which the outlay is Rs. 3.55 lakh crore and amount sanctioned by banks against these was Rs. 43,000 crore.

“Real problem is in road and power. There are 68 new projects in the road sector. There are 40 new projects in the power sector. We have to get them going,” he said adding that the ministries concerned would look into the matter so that projects are accelerated.

Chidambaram said the government has identified the main reasons due to which projects were stalled.

"The main reasons are coal linkage, environment clearances, land acquisition," he said adding there is now a greater degree of confidence than what was there 6 months ago.

"Now that we have resolved some issues relating to environment clearance, and NHAI, more coal blocks are being made available... Ministry will start taking sectoral meetings with state governments and promoters to see how we can move these forward," he said.

On liquidity situation, Chidambaram said the Reserve Bank Governor will take steps in the monetary policy review tomorrow.

"The RBI Governor is also aware of issues of liquidity and tomorrow is the monetary policy and am sure he will address the issue of liquidity," he said.

Replying to a question on charges of money laundering by certain employees of three private sector banks, Chidambaram said the RBI and the Finance Ministry are looking into the issue.

"Secretary, Department of Financial Services is looking at it closely. RBI is looking at it closely. They (banks) themselves have instituted enquiries. Let's give them a Little time to come up with the report of the enquiry," he added.

On the proposed all women bank, Chidambaram said the expert committee headed by M B N Rao for the purpose met for the first time on Saturday and the panel will give a blueprint on the bank by April end.

The Finance Minister further said all PSU banks have also shown interest in opening all-women branches. In next six months, he said, all state-run banks will have such branches.

On PSU bank recapitalisation, Chidambaram said state- owned banks will get Rs 14,000 crore additional capital from government in the next fiscal.

For the current financial year he said, three banks are yet to get capital funding and the infusion would be completed by March 31.

He further said the Cabinet Committee on Investment (CCI) would meet after March 22, when Parliament goes into recess. The CCI, headed by Prime Minister Manmohan Singh, has met twice and discussed projects in sectors like coal, power, oil and gas.

Chidambaram said he would meet the chiefs of PSU banks in the first and second week of June after the audit of annual accounts of the institutions.

On implementation of Basel III norms for banks, Chidambaram said "we will always be compliant with basel norms".


Go to Top

Photo Gallery
President Barack Obama is welcomed by  Narendra Modi and others during an arrival ceremony...

President Barack Obama is welcomed by Narendra Modi and others during an arrival ceremony...

Bollywood actor Shahwar Ali enjoying with the National Flag in a water scooter during Republic Day..

Bollywood actor Shahwar Ali enjoying with the National Flag in a water scooter during Republic Day..

Obama being presented a spinning wheel as a memento during his visit to Rajghat in New Delhi...

Obama being presented a spinning wheel as a memento during his visit to Rajghat in New Delhi...

Barack Obama participates in a tree planting ceremony at the Raj Ghat Mahatma Gandhi Memorial...

Barack Obama participates in a tree planting ceremony at the Raj Ghat Mahatma Gandhi Memorial...

Barack Obama throws rose petals as he participates in a wreath laying ceremony at the Raj Ghat...

Barack Obama throws rose petals as he participates in a wreath laying ceremony at the Raj Ghat...

Barack Obama and  Narendra Modi during their joint press conference at Hyderabad House in New Delhi.

Barack Obama and Narendra Modi during their joint press conference at Hyderabad House in New Delhi.

President Barack Obama is escorted during an arrival ceremony at Rashtrapati Bhavan...

President Barack Obama is escorted during an arrival ceremony at Rashtrapati Bhavan...

Narendra Modi and US President Barack Obama stroll in the gardens of Hyderabad House in New Delhi...

Narendra Modi and US President Barack Obama stroll in the gardens of Hyderabad House in New Delhi...

Young girls buying tricolour on the eve of Republic Day celebrations in Allahabad on Sunday...

Young girls buying tricolour on the eve of Republic Day celebrations in Allahabad on Sunday...

Barack Obama walks to inspect a guard of honour during his ceremonial reception...

Barack Obama walks to inspect a guard of honour during his ceremonial reception...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523