PSBs to recover around `1.8tr: FM

Union finance ministry on Tuesday said that the staterun banks are aiming to recover about `1.80 lakh crore from bad loans in the current fiscal as compared to `74,562 crore in the previous fiscal.

Speaking to media after meeting with the PSU bank heads, finance minister Arun Jaitley said that the bad loans are declining as recoveries have picked up and lenders are confident of maintaining liquidity as required. “We have overcome what was traditionally described as legacy issues, and faster we get out of it, I think it is better as far as the economy is concerned,” he said.

Mr Jaitley said the impact of various initiative was visible as after several quarter banks made net profit. He said that the lending ability of PSU banks are much better and their credit growth will move up significantly. He said that with the GDP growing and consumption up, banking activity is bound to pick up.

Mr Jaitley said that banks must strive to be seen always as institutions of clean and prudent lending.

On ex-RBI governor Raghuram Rajan’s letter to standing committee that the next banking crisis would be triggered by MSME lending, Mr Jaitley said: “I think for anyone to do postmortem is easier than action when it was required.”

Finance ministry said that close to `18,500 crore worth of non-core assets will be sold by PSBs this fiscals to raise funds.

The ministry added that there will be complete rationalisation of foreign operations of PSBs by March 2019, with closure/consolidation of 57 branches and offices.