Government package soon for stressed state-run banks

New Delhi, July 1 (IANS) The government is working on a comprehensive package to help stressed state-run banks and improve the flow of credit for industry, Minister of state for Finance Jayant Sinha said on Wednesday.

“NPAs (non performing assets, or distressed loans) are simply a symptom of the underlying issues that need to be resolved,” Sinha said at an event here organised by the Indian Private Equity and Venture Capital Association.

“We are preparing a comprehensive package which we will bring out shortly,” he added.

The minister said the government was trying to improve corporate governance and strengthen management at state-run banks, while also overhauling annual targets for public sector lenders to increase the focus on efficiency.

Sinha said he would meet banks over the next two days in Bangalore to fine-tune their capital-raising plans.

“We are trying to understand exactly what is their capital requirement going to be in the next one to three years. We are there to support and provide them the capital,” he said.

According to the Reserve Bank of India, gross NPAs as a ratio of total loans could rise to 4.8 percent by September from 4.6 percent in March.

The government has agreed to pump in about $3 billion into the banks during the current fiscal towards their capitalisation.

Finance Minister Arun Jaitley last month said his ministry is currently preparing a list of projects stalled due to lack of finance to set in motion the process of their revival and thus bring down the NPAs of banks.

“Many stalled projects have started. The secretary, department of financial services, in consultation with others, will prepare a list of projects stalled because of finance,” Jaitley had told reporters here after meeting with the heads of public and private sector banks.

“We will deal with these stalled projects directly. We will call representatives of state governments, of the projects and the departments concerned over the next few weeks,” he said.

Gross non-performing assets, or distressed loans, of state-run banks have gone up to Rs.260,531 crore as in December 2014. In the fourth quarter of January to March 2015, NPAs had come down from 5.64 to 5.2 percent.

As per the finance ministry’s Economic Survey published before February’s union budget, stalled projects as in December-end amounted to Rs.880,000 crore.

 

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of www.mangalorean.com or any employee thereof. www.mangalorean.com is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of www.mangalorean.com to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at  info@mangalorean.com. Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here