RBI deadline ends on finalising NPAs' resolution
Mumbai, Aug 27 : A major deadline in the process of resolving the country's most pressing corporate and banking problem of NPAs, or bad loans, is ending on Monday with the RBI having set a six-month time frame for finalising resolution plans for around 70 large stressed accounts worth over Rs 3.8 lakh crore.
In a circular on restructuring bad loans issued in February, the Reserve Bank of India (RBI) had asked banks to identify projects with even a day's default as stressed assets and conclude resolution proceedings in 180 days.
The RBI circular had directed banks to take loan accounts of Rs 2,000 crore and above, which remain unresolved for over 180 days starting from March 1, 2018, to the National Company Law Tribunal (NCLT) under the new Insolvency and Bankruptcy Code (IBC).
Domestic rating agency Icra has said in a recent report that these 70 large non-performing asset (NPA) accounts are mostly from the power, telecom and construction sectors.
According to banking sources, banks have been working overtime to finalise the resolution plans for these accounts so as to avoid going for bankruptcy proceedings in the NCLT.
The country's largest lender, State Bank of India (SBI), is looking at recovering more than Rs 40,000 crore of its stressed assets in the current fiscal, an official said on Saturday.
State-run State Bank Of India (SBI) Deputy Managing Director (Stressed Assets Resolution Group) Pallav Mohapatra said, the SBI expects to make a recovery of more than Rs 40,000 crore in the current financial year, mostly through the IBC, while a smaller percentage would be recovered from other sources like sale of assets and one time settlement.
Bankers are hoping that the RBI will take a lenient view and not refer all the NPA accounts to NCLT immediately after Monday's deadline expiry as the resolution process is already underway in some cases.
The power sector accounts for the major chunk of NPAs and according to RBI, the total outstanding loans of scheduled commercial banks to the sector, including renewable energy, stood at Rs 5.65 lakh crore as on March 2018.
A Parliamentary panel report has revealed that there are as many as 34 stressed electricity projects with a total capacity of over 40,000 MW.
Power producers had petitioned the government that RBI norms on resolving the NPAs issue were too rigid in view of the serious problems being faced by the industry in the way of coal shortage and the huge bill outstandings due from state distribution companies.
The Power Ministry had urged the RBI to extend the deadline by six months, but the central bank has rejected the extension request.
The Parliamentary Standing Committee on Energy in its report earlier this month noted that the new RBI guidelines on NPAs will only deepen the crisis of the electricity sector.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
Officially take stand against guarantee schemes, seek its withdrawal in Assembly: Shivakumar to BJP
Bengaluru (PTI): Karnataka Deputy Chief Minister D K Shivakumar on Friday challenged the opposition BJP to officially take a stand as a party against the five guarantee schemes, and to formally make a statement in the Legislative Assembly asking the government to withdraw them.
He said that if the BJP clarifies its official stand during the ongoing Budget session, the matter can be discussed in detail.
The Deputy CM said this while BJP MLA B Suresh Gowda was speaking during the discussion on the state budget in the Assembly.
Asking the government to revisit the guarantee schemes ('Shakti', 'Gruha Lakshmi', 'Gruha Jyoti', 'Yuva Nidhi' and 'Anna Bhagya'), the MLA urged the government to withdraw these schemes from affluent people and divert the funds toward developmental work.
"You (BJP) members are individually sharing your opinion in the Assembly. You tell your decision to us as a party in the Assembly to revisit or withdraw the guarantee schemes. Let's discuss. Since it's your party's opinion, we cannot say it's wrong right away. Let's discuss. If you do it during this Budget session itself, we will discuss it," Shivakumar said.
Gowda replied to Shivakumar by saying that it was the Congress' decision to announce and implement the guarantee schemes, why drag BJP into it, take a decision as a government.
Reacting to it, Shivakumar said, "After the guarantees announcement was made (following the 2023 assembly polls), Yediyurappa (BJP veteran and former CM) had said that the five schemes should be implemented without any shortcoming, so all the schemes were implemented within six months. We have heard you (BJP) too, while implementing the schemes."
Further claiming that unlike in Karnataka, only ruling party workers benefit in BJP-ruled Assam, he said, "Congress people and supporters don't get any benefits there."
Accepting that the guarantee schemes are not needed for those well off, government officials, and others, he said, "We have taken a decision, various suggestions are coming. As a political party you (BJP) come to a decision. We will discuss that....give it officially."
Revenue Minister Priyank Kharge intervened and said, "Let the BJP as its official party, stand say -- withdraw five guarantee schemes."
