PSB heads discuss bad loans issue with central agencies, RBI

Mumbai, June 15: Heads of public sector banks (PSBs) on Wednesday met the top brass of the central vigilance commission (CVC), Central Bureau of Investigation (CBI) and officials from the Reserve Bank of India (RBI) to discuss problems related to recovery of bad loans. CBI chief Anil Sinha and CVC commissioner K V Chowdary were present at the meeting.

According to bankers who attended the meeting, the recent Scheme for Sustainable Structuring of Stressed Assets (S4A) introduced by RBI was also on the agenda. “The agenda was to discuss the implementation of the scheme announced and how to go about,” said Ashwani Kumar, chairman and managing director, Dena Bank.

He added that the reason for Sinha and Chowdary to attend the meeting was because bankers and the agencies are required to be on the ‘same page’. “It was only on how to address these issues, what is the requirement for everybody and what the banks should look into, so that everybody has clarity on what has to be done,” he said.

Kumar explained that lenders have discussed their concerns regarding onetime settlement (OTS) of loans and what is the requirement or the process which they should follow. He added that banks don’t fear any witch hunting. “There is no witch hunting. Only thing is that everybody is on the same page when some process is on,” he said.

Vinod Rai, chief of the newly formed Banks Board Bureau (BBB), had assured banks that there would be no witch hunt against bankers. In April, he has said that caution and prudence in banking activity can hardly be overemphasised and not all loan defaults are wilful and not all lending activity, even if it is to salvage such stressed accounts, can be branded as corrupt practice or criminal misconduct.

Sushil Muhnot, CMD, Bank of Maharashtra said that the meeting was a discussion between the bankers and the agencies on how to approach things. “It was on understanding our position and theirs with respect to NPA cases and how we manage NPAs,” he said, adding that the Indian Banks’ Association( I BA) has also been working on a oversight committee on NPA management and that was also one of the solution that has come forward.