“The government has already taken a series of steps. In some cases, we already have seen exits in order to lower their (group) debts and make them more sustainable. The Oversight Committee is dealing with some cases which have now arisen on account of various steps that have been taken,” he said.
After chairing the meeting on stressed assets in steel, power and shipping sectors, Jaitley said: “Today’s agenda was whether in some cases we can also involve the management team of certain established and successful PSUs in certain sectors to operate, at least at the interim, some of the plants.”
The meeting was attended by chairpersons of three important PSUs, NTPC, SAIL and Cochin Shipyard Ltd.
The meeting also deliberated as to what can be done in case of certain defaulters, whose assets have found no takers.
Jaitley said banks will invoke their power of converting debt into equity in such cases, and some entities will come up to take over the stressed assets.
“Today one of the legitimate problems is whenever some assets are put out, there are no takers so the takers will be created,” he said.
The meeting was attended by Department of Financial Services, Economic Affairs Secretary and Officials from PMO and Secretaries and representatives from Steel, Power and Shipping were present.
“The concerned secretaries have been asked to coordinate between the banks and concerned PSU heads. I think they will start immediately,” he said.
The three sectors account for bulk of gross non-performing assets (NPAs) which surged to 9.32 per cent (Rs 4.76 lakh crore) in 2015-16.
Jaitley said the restructuring will necessarily involve the banks invoking their powers under the contract converting a part of the debt into equity taking control of those stressed units.
Banks will then appoint a management team of established people from either current or retired representatives who have great experience of those sectors, he said.
Earlier in the day, bankers met separately with Steel Secretary to discuss issues related to NPAs in the steel sector.
Jaitley had last week said that banks should enforce their right and recover dues in the larger interest of the economy.
“The problem of NPAs, which is of course the next big challenge as far as Indian economy is concerned, we are now coming to a stage when a lot of effective steps both legislative and in terms of policy have been taken,” he had said.
Banks now have to enforce their right in the larger interest of the economy because if money keeps lying and blocked with one particular section, then your capacity to lend to others itself is adversely impacted, Jaitley said.
“I think stage is now set for banks to take effective action in some cases so that people realise that indefinitely you cannot hold on public money because bank money is also at the end of day is public money itself,” he had said.