Govt swings into action on bad loans

Bankers' conference begins today

As part of its commitment to reform banking and financial sector, the government is holding a meeting with chiefs of public sector banks and financial institutions on Friday.

The focus of the Gyan Sangam will be on the non-performing assets of the PSBs.
Although, the two-day brainstorming will not be addressed by Prime Minister this year, the participants, under RBI Governor Raghuram Rajan will discuss India’s banks’ capacity for risk management, credit growth, digital and financial inclusion.

 “This retreat has been held to take forward the government’s commitment to reforms in the banking and financial sector. The growth and change in the financial sector ought to be in tune with the development in the real sector. The idea of organising such a retreat is to provide an informal academic environment, which can bring out the creative best of the minds of professionals and regulators,” the finance ministry said. 

At present, the value of stressed assets in the banks is Rs 7.4 lakh crore, going by  RBI estimate that 10.9 per cent of all loans are stressed. This number is expected to swell to Rs 8 lakh crore by March.

“The objective of this Retreat is to arrive at a common understanding among the professionals, regulators and the government on the reform, required in the Public sector Banks (PSBs) in the current economic situations,” the ministry said in a statement.

The participating officials have been divided into five Working Groups. The groups have been formed keeping in view the outcomes related to access, efficiency, stability, profitability/value creation, it said.

Working Groups include one each on restructuring, NPA management and recovery, technology, digital and financial inclusion, credit growth and risk management.

The Groups would hold discussions and finalise their reports and present them before Finance Minister Arun Jaitley on Saturday.