The Prime Minister's Office today held a stock taking meeting with senior officials of the ministries of finance and corporate affairs to review the progress in resolution of NPAs in the light of recent action taken by the Reserve Bank on stressed assets.
Prime Minister's additional secretary P K Mishra had a review meeting on resolution of non-performing assets (NPAs) or bad loans which have reached unacceptably high level, sources said.
It was a regular stocking meeting on issues related to NPA resolution, sources said, adding that various measures to tackle rising bad loans were discussed.
The banking sector is saddled with NPAs of over Rs 8 lakh crore, of which Rs 6 lakh crore is on the books of public sector banks (PSBs).
Ministry of Corporate Affairs Secretary Tapan Ray, who also holds additional charge as secretary, Department of Economic Affairs, and Financial Services Secretary Anjuly Chib Duggal were among the senior officials present at the meeting.
The discussions covered preparedness of institutional mechanism, including that of National Company Law Tribunal (NCLT), to handle the resolution process.
It is expected that RBI is likely to come out with more measures to rein in NPAs and share a possible timeline to bring them down to the acceptable level.
Reserve Bank of India last week identified 12 accounts for insolvency proceedings with each of them having over Rs 5,000 crore of outstanding loans, accounting for 25 per cent of total NPAs of banks.
These 12 accounts, having NPAs of about Rs 2 lakh crore, would qualify for immediate reference under the Insolvency and Bankruptcy Code (IBC).
The Reserve Bank had set up an Internal Advisory Committee (IAC), comprising a majority of its independent board members, to advise it with regard to the cases that may be considered for reference for resolution under the IBC.
IAC, the apex bank said, arrived at an objective, non- discretionary criterion for referring accounts for resolution under the IBC.
In particular, the IAC recommended for IBC reference of all accounts with fund and non-fund based outstanding amount greater than Rs 5,000 crore, with 60 per cent or more classified as non-performing by banks as of March 31, 2016.