Bad loans recovery on top of agenda: Vinod Rai

Recovery of bad loans is on the top of the government's agenda before going ahead with the consolidation of public sector lenders, Banks Board Bureau chairman Vinod Rai said today.
"Recovery is absolutely on top of the agenda so that the lending process can start again. Just now banks are engaged in resolution of their stressed assets. So what we are proposing to do is to resolve that (bad loans issues) quickly first because we do not want to saddle banks with greater issues," Rai told reporters on the sidelines of 22nd Lalit Doshi memorial lecture.
The gross non performing assets of scheduled commercial banks rose to 7.6 per cent in March 2016 from 5.1 per cent in September 2015.

The consolidation of banks is not a small issue and it requires a huge amount of human resources, Rai said.
Government has said that it would push for consolidation of public sector banks once they are recapitalised and strengthened.
It has given in-principle approval to merger of five SBI associate banks and Bhartiya Mahila Bank with State Bank of India.

SBI has five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. State Bank of Patiala and State Bank of Hyderabad are unlisted.

The Bureau has been set up by the government to advise it on top-level appointments at PSBs and ways to address bad loans problem, among other issues.
Talking about reports on a proposal given by BBB to the finance ministry for allowing public sector entities to buy in assets of stressed companies, Rai said lots of discussions have taken place.
"The entire idea is how to resolve the stressed asset issue. So lots of discussions are taking place, some of these things will fall into place very soon. Government will take up some of these ideas," he added.
The topic of Rai's lecture was 'Effects of Audit - Good or

Policy Paralysis'.
The former Comptroller and Auditor General of India (CAG) said accountability is not the sole responsibility of the government, but of the corporate sector as well.
It also extends to civil society, non-governmental organisations and citizens' groups, he said.
"Accountability is important as it ensures that public bodies are performing to their full potential, providing value for money in the provision of public services and instills confidence of the community in its government," he said.
He said auditing of government and public entities has a positive impact on trust in society. It focuses the minds of the custodians of the public purse to use the resources effectively, as they know that after audit scrutiny, the public will be aware of their actions.

Rai said the India story attracts worldwide attention as it involves one sixth of the global population.
"The struggle for dignity and prosperity of this population, through social and economic transformation, is being closely watched by rest of the world," he said.
Economic prosperity for Indians is not an option, but a necessity, he said.