NEW DELHI: Banks are likely to be given the authority to rescue stressed projects and change their managements even before the bankruptcy code bill becomes law. They will be allowed to go ahead with the bidding process within a stipulated timeframe, similar to the case of the erstwhile Satyam Computers.
A meeting was held recently between the Central Vigilance Commissioner and major banks, including State Bank of India chairman Arundhati Bhattacharya, to come up with solutions. A few stressed projects in the steel and power sector may be taken up as test case. The bidding process of the beleaguered company is proposed to be held within a stipulated timeframe.
The move aims to set a fair valuation of the stressed assets and arrest their dwindling production.
“We need to have a mechanism in place to ensure that this situation (of mounting NPA) is not repeated and we are collectively looking at the issue,” TM Bhasin, vigilance commissioner, told HT.
Higher provisioning for bad loans has led to banks reporting over `12,000 crore in losses during the October-December quarter.