Notice On Npas

The Supreme Court yesterday issued notice to the Union finance ministry and the Reserve Bank of India on a public interest petition by Common Cause seeking steps to recover Rs 43,000 crore non-performing assets accumulated over the years by nationalised banks.

A three-judge bench headed by Chief Justice M M Punchhi heard the case.

According to the petition, the accumulation of non-performing assets was caused by the policy to encourage the banks to liberally advance loans to the "needy and weaker" sections which were listed as priority sectors.

It was also alleged that after earmarking 50 per cent credit for government securities, 40 per cent was directed to be advanced to the weaker sections and the balance was to be used for assisting medium and large industries and wholesale trade.

"This amount, with the inclusion of appropriate interest accrued thereon, would be four to five times of the original figure comprising the non-recovered loans which to a large extent have become irrecoverable," the petitioner said.