New Delhi: Union Finance Minister Arun Jaitley today highlighted the initiatives taken by the government to deal with the issue of Non Performing Assets (NPAs) in Banking Sector and said that full autonomy has been given to the banks to make the management professional.
Jaitley, who was speaking at the second meeting of the consultative committee attached to the Ministry of Finance on the subject of ‘ NPAs in Banking Sector’, said transparency and professionalism has been brought in the appointment process for top management positions in the PSBs, including Chairmen and Managing Directors.
“To make the management professional, we have given full autonomy to the banks in taking commercial decisions without any interference from the government,” he added.
Jaitley pointed out that there are two categories of defaulters.
“The first category holds the one, who are unable to pay back due to economic slowdown both in domestic and global market and other reasons outside their control. Secondly, the others are willful defaulters including loans sanctioned without due diligence by the banks,” he added.
The Finance Minister assured that the government has taken various measures to deal with both these categories of defaulters.
“In order to deal with default due to economic slowdown, we have taken various measures to revive the stressed sectors, which mainly include steel, textiles, power and roads among others.
Recapitalization of banks by providing Rs. 25,000 crore in the last year Union Budget 2015-16 as well as in this year’s budget 2016-17 was among the biggest measure the government took,” he said.
Speaking on the issue of Bankruptcy Law, Jaitley said, “Joint Parliament Standing Committee is likely to be discussed in the current Budget Session of the Parliament. SARFAESI Act and DRT Act have been amended to make the recovery process more efficient and expedient.”
The government has advised the banks to take action against guarantors in the event of default by borrowers under relevant Sections of SARFAESI Act, Indian Contract Act and RDDB and FI Act.