1. NPA resolution: Bank unions sceptical of bankruptcy process

NPA resolution: Bank unions sceptical of bankruptcy process

Bank unions today claimed the bankruptcy process initiated by various lenders for NPA resolution will not help in bringing the money back.

By: | New Delhi | Published: September 14, 2017 10:29 PM
NPA resolution, Bank unions, All India Bank Employees Association, UFBU, RBI, PSU banks, Insolvency and Bankruptcy Code RBI recently identified 12 accounts with non-performing assets (NPAs) of about Rs 2.5 lakh crore and asked various banks to initiate bankruptcy process against these firms. (Reuters)

Bank unions today claimed the bankruptcy process initiated by various lenders for NPA resolution will not help in bringing the money back. Bankruptcy process is not going to yield desired results in terms of NPA resolution as recovery is likely to be very low, All India Bank Employees Association (AIBEA) General Secretary C H Vekatchalam said. “Banking Regulations Act has been amended to resort to Insolvency and Bankruptcy Code against big defaulters but this litigation route is time consuming and there is no guarantee of banks getting back the entire loans. Banks will incur further losses on account of these accounts,” he said.

RBI recently identified 12 accounts with non-performing assets (NPAs) of about Rs 2.5 lakh crore and asked various banks to initiate bankruptcy process against these firms. He added that United Forum of Bank Unions (UFBU) will hold a protest march here tomorrow against various government policies, including privatisation of PSU banks. Adequate capital should be provided by the government to public sector banks to strengthen their balance sheet and the administration should desist from any move towards privatisation, UFBU Convenor Sanjeev Bandlish said.

Effective measures are to be taken to recover the huge bad loans and banks should not be consolidated, amalgamated or merged, said All India Bank Officers Confederation (AIBOC) Joint General Secretary Ravinder Gupta. The protest march will begin from Ram Leela Maidan and culminate at Sansad Marg police station, he added. “Poor people, students and farmers are being harassed for non-repayment of loans but big corporates are enjoying all concessions. This is anti-people,” he said.

  1. V
    V.B.Sastry
    Sep 19, 2017 at 6:13 pm
    IBC as enacted and brought into force enables the derelict companies to get away with huge losses to Banks and without any significant loss or suffering to the Debtor companies. In fact the recoveries that were possible through approach to DRTs, while no doubt highly time-consuming, used to enable Banks to recover by accessing Assets belonging to Promoters (whose Guarantees were almost invariably obtained by Banks) and guarantors which may not materialise by resort to NCLT under IBC. Banks are required to accept plans involving huge sacrifice/loss to the Banks and the companies are allowed to go into lnsolvency and liquidation. Instead, Banks should have been empowered and enabled to seize and sell or hand over to Receivers the assets of the Borrowing Companies, the assets of the Promoters and also the guarantors, held benami as well as in their own names. Moreover, Banks should have been mandated to launch Forensic Audit in all NPA A/cs
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