The finanace ministry has told the Union cabinet that the current round of cancelling coal block allotments will cause non-performing loans of banks to jump by about Rs 1,00,000 crore.
The figure was flagged at Monday’s cabinet meeting while deciding on the fate of 62 coal blocks about which the Supreme Court has asked for a status report. The CCEA was undecided on the next course of action due to the huge financial implications.
It authorised Finance Minister P Chidambaram and Law Minister Kapil Sibal to advise Attorney General Goolam E Vahanvati to seek more time from the court so that it can examine the coal ministry’s inputs before it firms up its views.
- Varun Gandhi Under Attack Over Defence Deals: Here’s How
- This Diwali, Let Blind Students Brighten Up your Homes With Candles & Diyas
- CBI Files Supplementary Chargesheet In Sheena Bora Murder Case
- Soha Ali Khan And Vir Das Starrer 31st October Audience Reaction
- Sahara Chief Subrata Roy’s Parole Extended Till November 28
- Simple Tips To Secure Your Debit Card From Fraudsters
- New Zealand & India Team Being Welcomed In Chandigarh
- Mumbai Call Centre Scam: All You Need To Know
- Jammu Kashmir Chief Minister Mehbooba Mufti Appeals To Police: Here’s What She Said
- Shocker From Ahmedabad: Find Out What Happened
- Bigg Boss 10 Day 3 Review: Celebs Fail To Do Well in First Task
- Airtel Offers 10GB Data At Rs 259 For New 4G Smartphone Users
- Aamir Khan Starrer Dangal’s Trailer Launched: First Impressions
- TMC Supporters Attack BJP Leader Babul Supriyo
- Sri Lankan Navy Apprehends 20 Indian Fishermen
The 62 blocks were allotted between 2005 and 2008. The CBI is conducting a court-monitored probe into alleged irregularities in the allotment of 32 of them. The coal ministry has identified another 30 for an internal inquiry.
The threat of a spike in NPAs of banks comes at a time when banks are weighed down by bad loans of Rs 2,29,007 crore as on September 30, 2013, compared to Rs 1,79,891 crore on March 31, 2013 for the 40 banks that are listed on stock exchanges.
Cancelling coal block allotments would certainly mean forfeiture of bank guarantees and reneging on repayment commitments by borrowers. The impact would also be disproportionately higher on public sector banks.
Vahanvati had last week accepted in the court that something had gone wrong with the allotments and that they could have been done in a better way.