Banks finding it difficult to sell some stressed assets: FM
NEWDELHI: Finance minister Arun Jaitley on Friday said public sector banks (PSBs) are finding it difficult to get alternative promoters and buyers for certain stressed assets.
“One of the challenges that the banks did mention that they are facing...to find alternative promoters or buyers,” Jaitley told reporters after a three-hour review meeting with public sector bank chiefs underlining the need for greater action by banks to address the issue.
The gross non-performing asset (NPA) ratio in government banks has risen from 5.43% or ₹2.67 lakh crore in 2014-15 to 9.32% or ₹4.76 lakh crore in 2015-16. NPAs are loans that do not yield returns. The finance minister said big banks will take all necessary steps in co-ordination with the department of financial services to deal with the issue.
Jaitley added that banks have to keep in mind the larger interest of the economy while selling assets and that asset sale should not paralyse the running establishments, which in turn may lead to waste of investment and job losses. Both the government and the Reserve Bank of India (RBI) have undertaken a host of initiatives and legislative measures, including the enactment of the Bankruptcy law, and changes in the Sarfaesi Act, to address the situation, he said.
“Therefore with these effective steps, the banks will now have to take the intivative...the NPA situation is certainly neither static nor permanent,” Jaitley said, adding that banks along with the investigating agencies have initiated legal proceeding against wilful defaulters.