FinMin to meet PSU banks on Apr 28;to take stock of infra proj

The Finance Ministry has called a meeting of heads of public sector banks on April 28 to deliberate on removing the bottlenecks that hamper implementation of major infrastructure projects.
The meeting, in which senior Reserve Bank officials will also participate, will discuss the problems faced by project promoters and banks related to major infrastructure projects in sectors such as road, power, steel and shipping.
"In view of the fact that the level of non-performing assets (NPAs) and the stressed projects of Public Sector Banks (PSBs) have been showing an upward trend in the last four quarters, the Department of Financial Services (DFS) is going to hold a meeting of CMDs of PSBs on 28th April, 2015 at RBI Office in Mumbai," an official statement said today.

In this meeting, case by case review of some of the major infrastructure projects would be undertaken by the ministry in presence of senior officers of the Ministries of Power, Steel, Transport, Shipping and the RBI, it added.
"The objective of this meeting is to understand problems faced by project promoters and banks in retrieving them (NPAs) and to find out a solution to such problems. This meeting would help the Department to crystalise actions required by banks, Finance Ministry and other concerned Central Ministries as well as support required from the RBI," it said.
Last week, Secretary of Department of Financial Services Hasmukh Adhia had told PTI: "We will be doing segment wise analysis of stalled projects and understand what are the impediments and what kind of policy support required to facilitate implementation of these large projects.

"Large size stalled projects of infrastructure sector, including power, surface transport, steel, shipping, would come up for review in the meeting at Mumbai which will also be attended by senior officials of ministries concerned."

One of the major reasons for rising non-performing assets (NPAs) for PSU banks is non-implementation of infrastructure projects for reasons like, fuel linkage, environment clearance, land acquisition issue etc.
The level of NPAs and the stressed projects of the public sector banks have been showing an upward trend in the last four quarters.
As per the RBI data, gross NPAs of the PSU banks have gone up to Rs 2,60,531 crore as on December 2014.

Gross NPAs of public sector banks rose sharply to 5.33 per cent in September 2014 as compared to 4.72 per cent of total advances at the end of March 2014.
As per an estimate, the impact of cancellation of coal block allotments on public sector banks due to likely stoppage of production of power plants is estimated at Rs 96,484 crore.