Thursday, May 30, 2024
HomeEconomy and FinanceMeasures adopted by the Modi government paying off, the recovery against NPAs has doubled...

Measures adopted by the Modi government paying off, the recovery against NPAs has doubled for public sector banks

According to a report published by Times of India, the public sector banks have recovered Rs 60,713 crore against non-performing assets (NPAs) in the first half of this year. This amount is the double of the amount recovered in the corresponding period last year. According to the report, the Finance Ministry in response to a parliamentary question said that following the amendments in the Banking Regulation Act, the RBI had directed banks to initiate insolvency proceedings before the National Company Law Tribunal (NCLT) in 41 cases. Twelve out these 41 cases had cumulative outstanding of Rs 1,97,769 crore on March 31, 2017, and remaining 29 had an outstanding of Rs 1,35,846 crore as on June 30, 2017.

The report mentions RBI data quoted by the government in reply to BJP MPs Kirti Azad and Bharatiben Shiyal. “As per RBI data on global operations (with provisional data for September 2018) during the last three and a half financial years, NPAs of scheduled commercial banks reduced by Rs 2,83,770 crore due to recoveries,” the government told.

NPAs had been piling up since 2008, a period during which the UPA was in power, as revealed by various measures including Asset Quality Review (AQR) adopted by the Modi government. According to RBI inputs, aggressive lending practices, wilful defaults, loan frauds, corruption and economic slowdown were the primary reasons for the hike in the stressed assets. The AQR measure led to the reclassification of stressed assets as NPAs which led to an increase in the gross NPAs of scheduled commercial banks from Rs 2,51,054 crore as on March 31, 2014 to Rs 3,09,399 crore as on March 31,2015; Rs 5,66,247 crore on March 31, 2016; Rs 7,28,740 on March 31, 2017 and Rs 9,62,621 crore on March 31, 2018. This declined to Rs 9,46,062 in September.

Under the new Insolvency and Bankruptcy Code (IBC), the incentive to abuse the legal system has been taken away as the interim resolution professionals take over the management of corporate debtor at the outset said the Finance Ministry. Also, FEMA has been amended to include a three-month jail term for a borrower who does not provide the asset details and for the lender to get possession of the mortgaged property in 30 days.

Ayodhra Ram Mandir special coverage by OpIndia

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

OpIndia Staff
OpIndia Staff
Staff reporter at OpIndia

Related Articles

Trending now

Recently Popular

- Advertisement -