Finance minister P Chidambaram on Monday asked banks to crack the whip on defaulting customers and take firms steps to recover loans as the country cant afford to have affluent promoters and sick companies.
We wish banks take firm steps to recover non-performing assets (NPAs). Promoters have to bring in additional money and companies have the duty to pay back loans, Chidambaram said after a meeting with heads of public sector banks and financial institutions. The strict directive comes at a time when several companies,including Vijay Mallyas Kingfisher Airlines,are unable to repay bank loans. Kingfisher is yet to pay back over Rs 7,000 crore of loans.
Gross NPAs of public sector banks have more than doubled to Rs 1.55 lakh crore as on December 2012 from Rs 71,080 crore as on March 2011 in which corporate loans account for 53.68 per cent. Of this,about 172 corporate accounts are NPAs of more than Rs 100 crore at the end of December 2012 involving an estimated Rs 37,194 crore.
Chidambaram said that though recovery has improved in the last one or two months,he prodded banks to take more steps to deal with the issue. Department of financial services secretary,Rajiv Takru,also stressed that banks need to differentiate willful defaulters and take all possible steps to recover loans from them.
Meanwhile,expressing concern over stalled infrastructure projects,the finance minister said the government has identified the main reason behind them which include coal linkage,environmental clearances and land acquisition.
However,there is a greater sense of confidence now that the government has started addressing these bottlenecks,he said. The real problem is in road and power. There are 68 new projects in the road sector. There are 40 new projects in the power sector. We have to get them going, Chidambaram said,adding that concerned ministries would look into the matter so that projects are accelerated. The Cabinet Committee on Investments is also scheduled to meet on March 22,he said. As many as 215 projects with an investment of Rs 7 lakh crore are currently stalled and banks have disbursed about Rs 54,000 crore loan towards it. There are also 126 new projects in these sectors for which the outlay is Rs 3.55 lakh crore and amount sanctioned by banks against these was Rs 43,000 crore.
FM hopes RBI will address liquidity issues
Finance minister P Chidambaram on Monday expressed hope that the Reserve Bank of India would address liquidity issues in its mid-quarter monetary policy review on Tuesday. The RBI Governor is also aware of issues of liquidity and tomorrow is the monetary policy and am sure he will address the issue of liquidity, the finance minister said.
State Bank of India chairman Pratip Chaudhuri called for a cut in lending rates. We have requested 50 basis points in CRR and 0.50 per cent cut in Repo, he said. ENS
Looking at relaxing FDI cap in various sectors
The government is considering further liberalising foreign investment cap in various sectors,finance minister P Chidambaram said.
Many caps can be removed or certainly relaxed … Some of these caps are completely irrelevant in terms of the changed situation, he told a news channel.
The government had in September last year liberalised FDI norms for various sectors,including retail and aviation.
We need to clear some of the cobwebs accumulated in India and go out and woo specific business houses, he said. PTI