The government’s utmost priority is the resolution of stressed assets before it intends to bring about some consolidation in public sector banks (PSBs), Banks Board Bureau (BBB) chairman Vinod Rai said on Thursday.
Talking on the sidelines of the Lalit Doshi memorial lecture here, Rai said BBB does not want to burden the banks with consolidation at a time when they are engaged in resolution of stressed assets.
“Consolidation is not a small issue, it requires a huge amount of resources in terms of human resources. It will come by and work is in progress and we will figure out some methods by which it is done but in due course,” he said, adding that recovery is absolutely on top of the agenda so that the lending process can start again.
On reports that stressed companies which have agreed to sell assets to reduce debt will get counter offers from public sector companies, Rai said lots of discussions have taken place and he cannot single out any single discussion.
“The entire idea is how to resolve the stressed assets. So, lots of experiments are being drawn and lots of
discussions are taking place; some of these things would fall into place very soon and the government will take up some of these ideas,” Vinod Rai explained.
In February, Rai was appointed the first chairman of the Banks Board Bureau, which will advise the government on top-level appointments at public-sector lenders and ways to address the bad loans problem among other issues.
In a statement, the government had said Prime Minister Narendra Modi approved the proposal of the Department of Financial Services for the constitution of Banks Board Bureau (BBB) with part-time chairman/members, besides the ex-officio official members, for a period of two years.
The bureau has been set up at a time when public sector banks are grappling with a huge problem of bad loans with their collective gross NPAs (non-performing assets) to the tune of R5.9 lakh crore. The BBB was earlier proposed by the government as a body of eminent professionals and officials, which will replace the Appointments Board for appointment of whole-time directors as well as non-executive chairman of PSBs.