Modi government has no plans to waive corporate loans; onus on banks to resolve stressed accounts

By: | Published: December 29, 2017 5:43 PM

The government on Friday said it has no plans to waive corporate loan and banks are advised to resolve stressed accounts speedily or start insolvency proceedings case by case.

GST, GST return, GST regime, government funding to states, GST aftereffects, GST regime, GST reform, goods and service taxThe government on Friday said it has no plans to waive corporate loan and banks are advised to resolve stressed accounts speedily or start insolvency proceedings case by case. (Image: Reuters)

The government on Friday said it has no plans to waive corporate loan and banks are advised to resolve stressed accounts speedily or start insolvency proceedings case by case. “No proposal for waiver of corporate loan is under consideration of the government,” Minister of State for Finance Shiv Pratap Shukla said in a written reply to the Lok Sabha.

He was replying to a question if the government has taken note on nation-wide strike by bank employees against various moves, including an increase in bank charges, the merger of banks and waiver of corporate loans. Referring to the data from National Company Law Tribunal (NCLT), the minister said 2,434 fresh cases have been filed before NCLT till November 30, 2017 and 2,304 cases of winding up of companies have been transferred from various High Courts since the enactment of the Insolvency and Bankruptcy Code, 2016.

Of these, 2,750 cases have been disposed of and 1,988 cases were pending by the end of November, he added. The RBI has asked certain banks referring 12 accounts with fund and non-fund based outstanding amount more than Rs 5,000 crore and with 60 per cent or more as non-performing by March 2016 to start insolvency process, the minister said.

These 12 accounts constituted about 25 per cent of the gross non-performing assets (NPAs) of the banking system. Public sector banks had bad loans of Rs 7.34 lakh crore by the end of second quarter, a bulk of which came from corporate defaulters, according to the Reserve Bank.

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