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  1. Parliamentary panel discusses NPA issue with RBI Governor, bankers

Parliamentary panel discusses NPA issue with RBI Governor, bankers

The bankers also informed the panel, headed by senior Congress leader T Subbarami Reddy, that the 180-day resolution plan for NPAs under the Insolvency and Bankruptcy Code (IBC) is "too less".

By: | New Delhi | Published: April 10, 2018 10:34 PM
parliamentary panel, NPA issue, RBI governor, bankers A Parliamentary panel today met RBI Governor Urjit Patel, top public sector bankers and government officials to discuss about mounting bad loans and ways to resolve the problem.

A Parliamentary panel today met RBI Governor Urjit Patel, top public sector bankers and government officials to discuss about mounting bad loans and ways to resolve the problem. Several bankers apprised the Committee on Subordinate Legislation of Rajya Sabha about different aspects of non-performing assets and the efforts being made to tackle the menace, sources said. According to the sources, the bankers told the panel that the ‘one-day’ default provision for NPA classification as per the latest RBI circular was too harsh and that it should be made more practical. The circular was issued on February 12 amid rising concerns over bad loans in the banking system.

The bankers also informed the panel, headed by senior Congress leader T Subbarami Reddy, that the 180-day resolution plan for NPAs under the Insolvency and Bankruptcy Code (IBC) is “too less”, sources said. Top officials of about 16 public sector banks attended the meeting, which lasted for over three hours. Many bank officials were of the view that the emphasis should be on restructuring the stressed assets and that referring cases for resolution under the IBC should be the last option, sources said. Before meeting the bank officials, the panel met Patel, RBI Deputy Governor N S Vishwanathan, Financial Services Secretary Rajiv Kumar and Corporate Affairs Secretary Injeti Srinivas to understand the nature of the problems affecting the banking sector.

After the meeting, Reddy said that a view among several bankers was that moving the National Company Law Tribunal (NCLT) should be the “last resort”. Cases can be taken up for resolution under the IBC only after approval from the NCLT. Reddy also said that the RBI has promised to look into the suggestions made during the meeting. When asked whether the recent scam at the Punjab National Bank too came up for discussion, Reddy replied in the negative. Top officials of Punjab National Bank, Oriental Bank of Commerce, Canara Bank, Union Bank of India, United Bank of India, Allahabad Bank, and IDBI Bank were among those who attended the meeting. Gross NPAs of state-owned banks had crossed Rs 7.77 lakh crore at the end of December 2017, according to official data.

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  1. Veeresh Malik
    Apr 12, 2018 at 8:17 am
    For every borrower gone bad loan or NPA, there are 1000s or lakhs of depositors who are left carrying the loss. Our bankers in India appear to have forgotten this basic simple fundamental as they continue to take us for granted. So - what is a "bad loan" or "NPA" in India and why are our Indian bankers so hell-bent on protecting people who have gone bad-loan or NPA? A "bad loan" or "NPA" in India is defined as the sum product of systematic collusion between the Three Bs (Banker, Borrower, Bureaucrat) working in synchronisation with each other to shaft the other Indians. At one time, bad loans/NPAs could be paid back to some extent as the rupee kept going weaker and weaker, generating more rupees for forex stacked abroad, but the real estate crash as well as stronger rupee put an end to that. Now that's not possible and more than anything else, the concept of an escape route in the hands of the bankers has been removed.
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