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Banks have all powers to deal with wilful defaulters: Arun Jaitley
Concerned over `unacceptable` NPA levels, Finance Minister Arun Jaitley on Monday discussed with PSU bank chiefs the issue of wilful defaulters and said that the lenders have all the powers and autonomy to deal with them.
New Delhi: Concerned over "unacceptable" NPA levels, Finance Minister Arun Jaitley on Monday discussed with PSU bank chiefs the issue of wilful defaulters and said that the lenders have all the powers and autonomy to deal with them.
In the second quarterly performance review in six months, Jaitley brainstormed with SBI Chairperson Arundhati Bhattacharya and other PSU bank heads as well as RBI officials over the rising bad loans in different sectors including steel, credit offtake, health of the lenders and status of social security schemes.
The gross Non-Performing Assets (NPAs) of Public Sector Banks rose to 6.03 percent at the end of June, as against 5.20 percent in March this year.
The meeting had secretaries of various departments making presentations on the credit requirements for projects in the sectors under them.
"When we took assessment of certain sectors which had a higher level of NPAs, some particular defaulters which are common thread running across several banks did crop for discussion," he told reporters after the meeting.
The public sector banks, he said, "have all the powers... Banks today have full authority and autonomy to take action against them (defaulters)".
Jaitley was replying to a question on State Bank of India declaring Vijay Mallya a 'wilful defaulter' for not paying nearly Rs 7,000 crore loans to the long-grounded Kingfisher Airlines.
While the Reserve Bank has empowered the banks to deal with defaults, a bankruptcy law in the offing will help redress the problem to a large extent.
"These are all a part of those steps which are going to continuously empower the banks so that they can undertake their effective banking," Jaitley said.
Referring to the problems faced by the steel and aluminium sector due to global slump, he said: "Secretary, Department of Financial Services, would be coordinating further discussions between the banks and Department of Revenue as to what other proactive policy steps are required".
Major stress of the banks will ease once the sectoral issues are sorted out and economy improves, he said.