RBI Governor Rajan meets top bankers to discuss NPA woes
Days after the Reserve Bank set March 2017 as the deadline for lenders for cleaning up balance-sheets, top bankers, including SBI’s Arundhati Bhattacharya, ICICI Bank’s Chanda Kochhar, Axis Bank’s Shikha Sharma and Punjab National Bank’s Usha Ananthasubramanian met Governor Raghuram Rajan to discuss a way out of the asset quality woes.business Updated: Dec 14, 2015 21:59 IST
Days after the Reserve Bank set March 2017 as the deadline for lenders for cleaning up balance-sheets, top bankers on Monday met Governor Raghuram Rajan to discuss a way out of the asset quality woes.
“During the meeting, the RBI and the bankers discussed various issues, including the asset quality and the way forward for improving the quality of banks’ balance-sheets. The discussions will continue,” an RBI statement said.
All bankers, including SBI’s Arundhati Bhattacharya, ICICI Bank’s Chanda Kochhar, Axis Bank’s Shikha Sharma and Punjab National Bank’s Usha Ananthasubramanian, among others, were tight-lipped about the meeting’s outcome, and declined to speak on discussions to the waiting reporters outside the RBI headquarters here.
“It was an absolute general discussion with open mind on both sides,” state-run Union Bank of India chief Arun Tiwari told reporters. Others declined to speak.
The RBI statement said Rajan was accompanied by his deputies SS Mundra and R Gandhi, and officials from banking regulation and supervision departments.
The gathering assumes significance as it comes days after Rajan announced a March 2017 deadline for the banks to clean up their balance-sheets plagued by high incidence of bad assets. The restructured and the bad assets combined together have gone over 13%.
Announcing the deadline earlier this month, Rajan had said bankers had been given lot of leeways like the SDR scheme to take over majority ownership in defaulting companies and the 5/25 scheme of debt rescheduling to get their act together.
Other bankers, who attended the meet included the chiefs of Bank of Baroda, Bank of India, Syndicate Bank, IDBI, United Bank of India and Andhra Bank.
It can be noted that the state-run banks are the ones which have been hurt by asset quality woes.
The meet comes two days ahead of the much-awaited US Fed meeting, which is expected to increase the record low interest rates in the world’s largest economy. If done so, this may lead to volatility in the Indian market apart from causing flight of capital.
The conclave also assumes significance as the RBI, in one of the rare occasions, missed its deadline by almost a fortnight to come up with the final guidelines on base rate calculation based on marginal cost of funding. Rajan had on December 1 said he would issue the final norms by the end of the first week of the month.