The government has put in place a comprehensive 4R strategy for the transparent recognition of non-performing assets (NPA), resolution and recovery of the value of distressed assets, the recapitalization of public sector banks (PSBs) and reforms of PSB in order to reduce their bad debts, Sitharaman said in a written response to Rajya Sabha.
Among others, the change in the credit culture with the Insolvency and Bankruptcy Code (IBC) fundamentally changing the creditor-borrower relationship, removing control of failing companies, prohibiting willful defaults from participating in the resolution process as well that the fundraising in the markets are the steps that have been employed, said the minister.
“Allowed by these steps, according to RBI data on global operations, the NPAs of programmed commercial banks (SCBs), after reaching a peak of Rs 10.36.187 crore on March 31, 2018, decreased by Rs 1.02.562 Crore to Rs 9 33,625 crore as of March 31, 2019 (provisional data for the fiscal year ended March 2019, “Sitharaman said.
During 2018-19 the maximum number of frauds, involving Rs 1 lakh and above, was reported by
at 374 followed by (338), HDFC Bank (273), State Bank of India (273), Axis Bank (195) and American Express Banking Corporation (190), the minister said.
“Comprehensive measures have been taken to prevent fraud, including instructions to banks to review all NPA accounts above Rs 50 crore for possible fraud, initiation of criminal proceedings, the promulgation of the law on fugitive economic offenders 2018, the creation of the central register of fraud, the empowerment of heads of public sector banks to request the issuance of an alert circular ”, she declared .
The establishment of the National Financial Reporting Authority, the direct processing between Core Banking System and SWIFT and the institution in the PSB of the system for obtaining certified copies of the passport of promoters / directors of companies benefiting from loans exceeding Rs 50 crore are the other measures.
Sitharaman said SCB made a record recovery of Rs 4.01,424 crore over the past four fiscal years, including a record recovery of Rs 156,746 crore in 2018-19 (provisional data for 2018-19, as reported by RBI July 9, 2019).
The minister also informed the Upper House that other measures as part of the banking reform process, such as board-approved lending policies in public sector banks, the use of third-party data sources for full due diligence between data sources have been put in place to verify fraud.
Strict oversight in high-value loan cases, the deployment of specialized oversight agencies for loans over Rs 250 crore, and unique end-to-end online (OTS) settlement platforms have been put in place. place to guarantee rapid and better implementation of these regulations. been carried out.
In response to a separate question on defaults of Rs 25 crore and above in PSBs, Minister of State for Finance Anurag Singh Thakur said as of March 31, 2019, there were 1,938 unique borrowers with an outstanding amount of over 25 rupees. crore who had defaulted on their loans (according to RBI data).
However, he said the list of such borrowers cannot be made public because the RBI Act of 1934 prohibits disclosure of credit information.
“Section 45E provides that credit information submitted by a bank must be treated confidentially and not be published or otherwise disclosed,” Thakur said.