Banks to Earn Their Cap­i­tal with Action Committee Clears Bank­ruptcy Law

Bud­get ses­sion will now dis­cuss pro­posed leg­is­la­tion deal­ing with wil­ful de­fault­ers

The Economic Times - - Economy: Macro, Micro & More - Our Bureau

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.

FILE PHOTO

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