New Delhi June 1 (IANS) Finance Minister Arun Jaitley on Thursday said an action plan under the non-performing assets (NPAs) ordinance relating to bad debts of banks was expected in the next few days in order to tackle the top 40-50 defaulters.
Reserve Bank of India (RBI) earlier under its rules was making efforts. Now in the next few days the action plan under the ordinance ... there maybe active work under it in next few days Jaitley said at a media conference here on the completion of the NDA s three years in office.
There are no NPAs in Mudra (Micro Units Development and Refinance Agency) loans. NPAs are only for 40-50 big accounts he added.
On being asked if the government may write-off some of these bad loans the Finance Minister said this was the prerogative of the bank under commercial prudence.
When an account becomes non-performing once the resolution process is on it is on banking considerations. What banks decide on commercial prudence is within the domain and rights of the banks he said.
The government earlier this month passed the Banking Regulation (Amendment) Ordinance 2017 that has allowed more power to the RBI to tackle the NPAs issue. It has been empowered to issue directions to commercial banks to initiate insolvency proceedings for recovering bad loans.
The NPAs or bad loans of state-run banks at the end of last September rose to Rs 6.3 lakh crore (almost $100 billion) as compared to Rs 5.5 lakh crore at the end of June 2016.
The RBI had said it is working on a framework to facilitate an objective and consistent decision-making process for cases that may be referenced for resolution under the Insolvency and Bankruptcy Code 2016.
The apex bank has sought information on the current status of the large stressed assets from the banks.
The RBI would also be constituting a committee comprising of majority of its independent board members to advise it in this matter.
--IANS
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Action plan under NPA ordinance expected in next few days: Jaitley
