Take proactive steps to bring down NPAs: FM
Finance minister Arun Jaitley on Thursday asked chiefs of public sector banks (PSBs) to focus on recovery and take proactive steps to bring down the level of non-performing assets (NPAs).business Updated: Nov 20, 2014 22:17 IST
Finance minister Arun Jaitley on Thursday asked chiefs of public sector banks (PSBs) to focus on recovery and take proactive steps to bring down the level of non-performing assets (NPAs).
NPAs are loans that do not yield returns.
“Over the last two-three years, on account of slowdown, one area of concern is that the NPA has risen…Therefore, what proactive steps to be taken to ensure that NPAs come down has been discussed,” Jaitley told reporters after meeting the PSB heads.
The gross NPAs of government banks is over 4% at present.
The minister also directed banks to ensure smooth credit flow to stalled projects.
Bankers should “work in a professional manner without any fear or favour”, Jaitley added, saying that the government has taken steps to streamline the appointment process of chief executive officers and executive directors of PSBs to introduce objectivity.
Bankers were also assured by the finance minister that there won’t be any government interference in day-to-day functioning.
Jaitley added that the functioning of banks and the decision-making process must be influenced by professional reasons and not collateral ones.
“There is a need to further tighten the debt recovery tribunals and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, which allows lenders to auction all properties in case of default... These have not given desired results,” a bank chairman told HT.
First Published: Nov 20, 2014 22:15 IST