Banks to Earn Their Capital with Action Committee Clears Bankruptcy Law
Budget session will now discuss proposed legislation dealing with wilful defaulters
HARD WORK AHEAD FinMin has asked PSBs to step up recovery work as any capital allocation will be based on their performance
New Delhi: A joint Parliament standing committee has cleared the proposed bankruptcy law and it’s likely to be discussed in the ongoing budget session of Parliament, finance minister Arun Jaitley has said. Addressing the second meeting of the consultative committee on ‘NPAs in banking sector’ on Wednesday, Jaitley said the government had taken steps to deal with both wilful defaulters and those in trouble due to economic slowdown, according to a statement issued by the finance ministry.
The finance minister also said that SARFAESI Act and DRT Act have been amended to make the recovery process more efficient and expedient.
The SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act and Debt Recovery Tribunal (DRT) Act have also been amended to make the recovery process more efficient and expedient, Jaitley said in his opening remark.
He also told the committee that the government has advised banks to take action against guarantors in the event of default by borrowers under relevant Sections of SARFAESI Act, Indian Contract Act and RDDB & FI Act after finding that in number of cases insufficient action has been taken against guarantors. The government has taken various measures to revive stressed sectors such as steel, textiles, power and roads, he said.
The finance minister said .₹ 25,000 crore was provided for bank capitalisation last year and similar amount has been budgeted this year. He also listed the measures to make bank management professional and given full autonomy in commercial decisions without any interference from the government.