Finance Ministry to hold meeting with top management of banks tomorrow on NPAs

Finance Ministry has called a meeting of senior management of banks on Monday to discuss the bad loans issue in specific sectors, including steel.

The meeting would focus on non-performing assets (NPAs) in sectors like steel, power, and infrastructure, sources said.

These three sectors account for the bulk of gross NPAs which surged to 9.32 per cent (Rs 4.76 lakh crore) in 2015-16.

The meeting would be attended by CEO and Executive Directors of various public sector banks, sources said. Senior officials from the steel, power and road transport ministries would also be present there.

In the last two years, the Reserve Bank of India has taken measures to clean up balance sheet of banks and the target set for the same is March 2017.

Earlier this week, Finance Minister Arun Jaitley had said banks should enforce their right and recover dues in the larger interest of the economy.

"The problem of NPAs is the next big challenge as far as Indian economy is concerned, we are now coming to a stage when a lot of effective steps both legislative and in terms of policy have been taken," he had said.

Banks now have to enforce their right in the larger interest of the economy because if money keeps lying and blocked with one particular section, then your capacity to lend to others itself is adversely impacted, Jaitley said.

"Therefore as far as policy relation with regard to certain sectors is concerned that being done, empowerment of banks by virtue of legislation and RBI guidelines has been done, a long rope has been given to people to improve and sort matters out," the Finance Minister added.

"I think the stage is now set for banks to take effective action in some cases so that people realise that indefinitely you cannot hold on public money because bank money is also at the end of the day is public money itself," he said.