New Delhi: In pursuance to the directions of the Supreme Court, the Finance Ministry will soon set up a panel to look into the issue of mounting bad loans and come out with the steps to deal with the problem.


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"The committee to look into non-performing assets (NPAs) issue will be announced soon in accordance with the suggestions of the Honourable Supreme Court," a senior Finance Ministry official said.


It will look into various issues related to NPAs and ways to rein it, the official added.


Besides, it will also point out if loan approval process and system is suffering from any gaps or lacuna.


Some names have been considered for the panel including Union Bank of India Chairman and Managing Director Arun Tiwari, Indian Bank MD M K Jain and legal expert M R Umarji, the official said, adding it could be headed by senior official of the Finance Ministry.


Last month, the bench headed by Supreme Court Chief Justice T S Thakur suggested the Centre to consider setting up a committee of experts which would go into the entire gamut of issues related to NPA.


"You propose a committee to look into it. We will accept the proposal," a bench comprising Chief Justice and Justices R Banimathi and U U Lalit had said.


"Tell us about mechanism for recovering the dues. There may be some mechanism to deal with it. There is also a need of amendments. Suggest the ways and means by which these things can be prevented," it had observed.


"We are trying to highlight the issues as there is something not working. If your system would have been perfect then things would not have happened," it had said while hearing PIL filed by senior advocate Prashant Bhushan.


The gross NPAs of public sector banks (PSBs) increased from 5.43 percent as on March 2015 to 7.30 percent as on December 2015. Gross NPAs of PSBs increased from Rs 2,67,065 lakh crore in March to Rs 3,61,731 lakh crore in December.


At the end of December, as many as 701 accounts with bad loans exceeding Rs 100 crore owed public sector banks (PSBs) Rs 1.63 lakh crore, while SBI accounted for the biggest chunk.


Playing down the NPA issue, RBI Governor Raghuram Rajan yesterday had said India's banking sector is facing problems but there is no chance the country facing a "Lehman moment".


Lehman moment refers to the collapse of the leading US investment banker Lehman Brothers in 2008 which triggered the global economic crisis.