Bank chiefs meet central agencies on bad loans

Public sector bankers on Wednesday met officials of the Reserve Bank of India (RBI), Banks Board Bureau, Central Bureau of Investigation and Central Vigilance Commission to clear the air around the state of bad debts in the sector.

The meeting, held at RBI premises, was attended by chiefs of public sector banks, including State Bank of India head Arundhati Bhattacharya.

The focus was on resolution (for stressed loans) and a number of related issues were dealt, said a senior banker. He declined to elaborate if decisions were taken.  

The bankers are understood to have told the officials that the bad debt situation, about Rs 5.82 lakh crore for the listed banks, was not because of bad credit decisions but were the outcome of economic downturn.
 

However, bankers remain apprehensive on taking decisions to resolve cases, as they could be subjected to investigations even after their retirement and that hinders taking of bold credit decisions. Any such decision involves taking an informed guess but the situation can go wrong if the economy dwindles and blaming bankers would be unfair, they told Vigilance Commissioner T M Bhasin, who was earlier the chairman of Indian Bank.