Finance minister Arun Jaitley will hold a meeting with Reserve Bank of India (RBI) officials on Friday on the vexing issue of non-performing assets (NPAs) of banks, especially the public-sector ones, sources said. Financial services secretary Anjuly Chib Duggal will also be a part of the meeting. In the Economic Survey 2016-17, CEA Arvind Subramanian had suggested a centralised Public-sector Asset Rehabilitation Agency to address the issue. However, RBI deputy governor Viral Acharya recently pitched for an efficient structure for handling the stressed loan crisis: a private asset management company and a national asset management company.

NPAs of 41 banks grow 60% to R7L cr in Q3
While finance minister Arun Jaitley is expected to meet senior officials from the Reserve Bank of India (RBI) to discuss bad debt resolution measures, India’s non-performing assets (NPAs) have shown no signs of moderating, reports fe Bureau in Mumbai. According to Capitaline data, the total bad loans of 41 banks stood at R7 lakh crore in the December quarter of FY17, up 60% from the same period last year. In Q2 FY17, gross NPAs of the same set of banks stood at R6.74 lakh crore. According to RBI’s Financial Stability Report (FSR), the gross non-performing asset (NPA) ratio climbed to 9.1% in September, 2016 from 5.1% in September 2015.

Meanwhile, RBI’s stress resolution measures like strategic debt restructuring (SDR) and the scheme for sustainable structuring of stressed assets (S4A), have failed to make any significant impact. While banks have tried converting debt into equity through SDR in close to two dozen companies with debt of close to R1.5 lakh crore, they have been unable to find a buyer for any of those stressed assets. Similarly, even S4A has failed to take off with the oversight committee (OC) having cleared only three cases till date.