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  1. Edelweiss head Rashesh Shah’s solution to tackle India’s NPA mess

Edelweiss head Rashesh Shah’s solution to tackle India’s NPA mess

After PM Narendra Modi said yesterday that the government has inherited a huge pile of NPA’s from the previous government, Edelweiss CEO and the new FICCI President Rashesh Shah said that he expects the process of resolution to be complete by 2020-21.

By: | Published: December 14, 2017 1:05 PM
Edelweiss CEO and the new FICCI President Rashesh Shah said that he expects the process of resolution to be complete by 2020-21.

After PM Narendra Modi said yesterday that his government has inherited a huge pile of NPA’s from the previous government, Edelweiss CEO and the new FICCI President Rashesh Shah said that he expects the process of resolution to be complete by 2020-21. In an interview to ET Now, Rashesh Shah said that identifying, provisioning, resolution and revival are the  four steps for resolving bad loans. The Prime Minister had questioned the silence and inaction of institutions, including FICCI on India’s bad loan mess.  “I am not aware that if FICCI has done any survey on the way the previous government’s policies worsened the condition of the banking system. The hue and cry over NPAs these days is the biggest liability transferred by economists of the previous government,” Prime Minister Narendra Modi said.

In October this year, the government had announced an aggressive Rs 2.11 lakh crore capital infusion plan for public sector banks reeling under bad loans over a period of two years.The announcement is being seen as a major step towards helping the public sector banks flush with money post demonetisation but reeling under non-performing assets.

Rashesh Shah also said that the government is constantly taking feedback on the insolvency process; and there should not be any delay. The government has embarked on one of the biggest reforms programmes for India Inc., building a dedicated bankruptcy framework. Earlier last week, 14 cases under the Insolvency and Bankruptcy Code (IBC) have been referred for liquidation, with NCLT benches giving their approvals on mothballing the defaulting companies.

Many top experts including former SBI Chairman had shared their solution to tackle India’s NPA problem. After the Narendra Modi-led government announced a massive Rs 2.11 lakh crore for recapitalisation of banks in October this year, Arundhati Bhattacharya called for a three-pronged approach to solve NPA mess. Speaking to ET Now, on the sidelines of an event, Arundhati Bhattacharya said, “The NPA mess needs a three-pronged approach. There has to be recognition, resolution and recapitalisation. All three must go together. The recognition and resolution were over, and now the recapitalisation has also come.”

Deepak Parekh, Chairman of HDFC had said, “This is an Indian TARP (Troubled Assets Relief Programme) and it has done well because this Rs 2.11 trillion is a two-year thing. So the government has taken care of not just current NPAs but 5-10% that may come up. This is a big bang reform. The equity they put in will increase value for them.”

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