Jaitley apprised of bad loans, given roadmap

New Delhi, March 19: Expressing concerns over mounting bad loans, Banks Board Bureau (BBB) Chief Vinod Rai has written to finance minister Arun Jaitley and Prime Minister’s Office underlining the tardy progress made by state-owned lenders in resolving the issue of Non- Performing Assets (NPAs).

The former CAG, in a letter marked to Principal Secretary to Prime Minister Nripendra Misra, has also suggested a roadmap to wriggle out of the NPA problem being faced mainly by public sector banks (PSBs), official sources said.

The letter, they said, has suggested the expansion of ambit of Oversight Committee to provide guidance under other available mechanisms, including deep restructuring, Joint Lenders Forum (JLR) and Strategic Debt Restructuring (SDR).

Bad loans of PSBs rose by about `1 lakh crore during the AprilDecember period of 201617, the bulk of which are accounted for by the infrastructure sector — power, steel, roads — and textiles.

Mr Jaitley last week held a high level meeting with senior officials, RBI Governor Urjit Patel and two deputy governors S.S. Mundra and V.V. Acharya to deliberate on the ways to resolve stressed assets in the banking sector.

Gross NPAs of public sector banks increased to `6,06,911 crore while total stressed assets (gross nonperforming assets and restructured standard advances) of scheduled commercial banks were `9.64 lakh crore as on December 31, 2016.

As of September-end, the banks’ total stressed loans were `8,97,000 crore.

This is a 7.5 per cent growth in stressed loans from September to December-end.

Earlier this week, Jaitley had said the RBI has set up an Oversight Committee to look into process of the cases referred to it by the different banks.

“Seeing the response and its performance, the government is considering multiplication of such committees,” he had said.

BBB was set up as an advisory body by the government last year to recommend on the appointment of directors at PSBs and advise on ways to raise funds and merger and acquisitions to the lenders among other things. — PTI Undeterred by PoscoIndia’s offer to return the land provided for its steel project in Odisha, Union minister Piyush Goyal on Sunday said if one company pulls out, others will come in.

“There are more and more opportunities in India and if one company chooses to pull out, others will come in,” Mr Goyal said on the sidelines of International Diamond Conference ‘Mines to Market’.

Commenting on the delay in land acquisition and other policy issues as regards the Korean company, the Coal and Power Minister said, “It had happened during the earlier regime and now things are becoming more transparent.”

Odisha’s Industries minister Debi Prasad Mishra had said that Posco-India in a letter requested the state government to take back its 2,700 acres of land provided to it near Paradip for setting up a 12 mtpa steel plant at an investment of `52,000 crore.

As the steel major had not made any formal communication with the Odisha government about its plan, the present letter is considered as the first move for scrapping of the project.

Posco-India had signed an agreement with the state government in June 21, 2005 for setting up its mega steel facility near Paradip. — PTI