Tags:
Journalism of Courage
Rising bad loans was the top priority of bankers who met finance minister Arun Jaitley for a pre-Budget meeting on Tuesday and called for the setting up of a National Asset Management Company to deal with the problem.
“There were some suggestions on setting up of National Asset Management Company,” said financial services secretary GS Sandhu after the meeting, adding that the government will examine all suggestions. According to the proposal, the National Asset Management Company will act as a nodal agency and take over large non-performing assets of banks and help in revive companies ridden with bad debts.
The gross non-performing assets (NPA) of public sector banks rose to Rs 2.03 lakh crore at the end of September 2013, from Rs 1.55 lakh crore on 31 March, 2013.
“There was discussion on NPA. There was also proposal for setting up of National Asset Management Company for improving the performance of DRTs (debt recovery tribunals) to collect loans,” said Naina Lal Kidwai, HSBC India country head.
Seeking cooperation from banks, Jaitley said, “The slow down of economic growth coupled with high inflationary pressure poses a challenge to the economic environment.” Public sector banks also sought capital infusion and development of long term instruments for financing the infrastructure sector.
Meanwhile, Kotak Mahindra Bank managing director Uday Kotak said the government should consider listing of LIC. “I am not saying it needs to be necessarily done in the July Budget … But over the next few years the government should consider listing of LIC,” he said.
