1. Expert group on consolidation of banks soon: Arun Jaitley

Expert group on consolidation of banks soon: Arun Jaitley

Government will soon set up an expert group to look into consolidation of public sector banks as the country needs stronger rather than a large number of banks, Finance Minister Arun Jaitley said here today.

By: | Gurgaon | Published: March 5, 2016 7:49 PM
Budget 2016, budget 2016 date, budget 2016 india, budget 2016 highlights, budget 2016 expectations, budget 2016 expectations india, Budget news, Budget latest news, budget 2016 summary, budget 2016-17 expectations, Budget expectations, budget session 2016, Union Budget 2016-17, Arun Jaitley, arun jaitley budget, arun jaitley budget 2016, arun jaitley budget news, latest business news, business news Giving details of the deliberations during the conclave, Jaitley said there are suggestions to amend SARFESI ACT and also expedite the DRT process by some more amendments to law.

Government will soon set up an expert group to look into consolidation of public sector banks as the country needs stronger rather than a large number of banks, Finance Minister Arun Jaitley said here today.

He also said the government is considering ESOPs for PSU bank officials besides strengthening the SARFAESI Act and Debt Recovery Tribunals to deal with the problems of stressed assets that are estimated at around Rs 8 lakh crore.

Addressing a press conference at the conclusion of the second edition of Gyan Sangam, Jaitley said that consolidation in the banking sector was discussed at the meeting and bankers themselves have suggested that an expert group should be set up soon to look into the issue.

“We will consider that suggestion,” the minister said adding that the country needs stronger banks rather than large number of lenders.

There could be niche banks and banks which could survive independently and sustain themselves well, he said, observing that the Gyan Sangam strongly supported the idea of consolidation in the banking sector.

The other idea which was suggested at the meeting was to reward the public sector bank employees with Employee Stock Ownership Plan (ESOP), he said.

“Government is considering (the proposal of ESOP for bank employees). It is in very advanced stage… It has been long standing demand, and is (under) an active consideration,” Jaitley said.

With regard to the rising Non-Performing Assets or bad loans, Jaitley said that besides strengthening the institutional mechanism, the government has been taking sector specific decisions to deal with the problems in segments like power, highways, sugar and steel.

Giving details of the deliberations during the conclave, Jaitley said there are suggestions to amend SARFESI ACT and also expedite the DRT process by some more amendments to law.

“The Department of Financial Services is working in that direction and work is in fairly advanced stage,” he said, adding that DRT will become the country’s first online court.

“We are anxiously waiting for report of the Joint Committee on Bankruptcy and Insolvency Law. That will create a structural and institutional mechanism which will help the bank as lenders,” the minister said.

On the NPA situation in the banking sector, Jaitley said banks are taking steps to recovery bad loans.

“As far as recovery is concerned, whatever steps have to be taken with regard to recovery banks have various rights for recovery through DRT, SDR… Neither loan waiver has been given to anyone, nor will be given,” the minister said.

In the current global environment, Jaitley said, banks have to take all the measures in order to clean up their books by effecting recoveries.

He also said that there are some sector specific decisions which are required to be taken by the government. These include, power, highways, sugar and steel.

To a question related to setting up of a ‘bad bank’, Minister of State for Finance Jayant Sinha said the issues related to asset reconstruction companies and stressed assets were discussed.

  1. Shankar Shankar
    Mar 5, 2016 at 4:18 pm
    It is shame that in today's news paper a news item has revealed that a bank manager has been booked for demanding Rs Rs 45000.00 for releasing Home Loan to a customer. This type of manner less Officials in banking industry are defaming the images of banks and responsible for creation of bad loans. To weed out such unscrupulous elements from banking industry, consolidation of banking industry is a good step. Such people should be shown the door mercilessly and government should merge banks
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