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			With public-sector banks finding it tough to get new promoters for companies in which they have gone for strategic debt restructuring (SDRs), Union Finance Minister Arun Jaitley said on Monday that the lenders would take ownership of stressed assets in steel, power and shipping sectors. Besides, public-sector undertakings (PSUs) such as NTPC and SAIL would be roped in to manage the stressed assets of banks.</div>
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			Jaitley, however, stressed that this was not &lsquo;nationalisation&rsquo;.&nbsp;</div>
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			The move is part of the government&rsquo;s effort to clean up the banking sector, which is facing mounting bad loans. This was discussed at the meeting of heads of key banks and PSUs with the finance minister and finance ministry officials. Before the meeting, the bankers met Steel Secretary Aruna Sharma separately to discuss issues related to bad debts in the steel sector.&nbsp;</div>
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			&ldquo;According to the mechanism discussed, banks will invoke powers under the contract and convert part of the debt into equity,&rdquo; said Jaitley after the meeting.&nbsp;</div>
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			They will then take up control of these units and appoint a management team to deal with the bad loans, according to the discussion.&nbsp;</div>
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			&ldquo;Today, one of the legitimate problems is that whenever some asset is put out, there are no takers. So, takers will be created,&rdquo; he added.&nbsp;</div>
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			Working and retired PSU executives might be appointed to manage these assets for a certain period of time.&nbsp;</div>
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			&ldquo;Chairpersons of three important PSUs &mdash; NTPC, SAIL and Cochin Shipyard &mdash; were present (at the meeting). The idea is to involve the management team of certain established and successful PSUs in certain sectors to operate some of the plans as an interim mechanism,&rdquo; said Jaitley.&nbsp;</div>
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			Power, steel and shipping sectors account for the bulk of gross non-performing assets (NPAs), which surged to 9.32 per cent (Rs 4.76 lakh crore) in 2015-16, from 5.43 per cent (Rs 2.67 lakh crore) in 2014-15. Besides officials in the finance ministry, the meeting was attended by key officials of the Prime Ministers&rsquo; Office, the ministries of steel, power and shipping, and chairpersons of SAIL, NTPC, and Cochin Shipyard. The heads of key banks, including Arundhati Bhattacharya of State Bank of India and Chanda Kochhar of ICICI Bank were part of the hour-long meeting.&nbsp;</div>
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			Under SDR, banks, which have given loans to a corporate borrower, get the right to convert the full or part of the loans into equity shares in the company concerned.&nbsp;</div>
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			The liberalised scheme for sustainable structuring of stressed assets (S4A) enables bank to convert unsustainable debt into equity or related instruments. The secretaries of the ministries concerned have been asked to coordinate between banks and the PSUs concerned.&nbsp;</div>
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			&ldquo;More discussions will go into it, but I think they&rsquo;ll start immediately. The government has already taken a series of steps. In some cases, we have already seen exits to lower debts and make them more sustainable. The Overseeing Committee is dealing with some cases, which have now arisen on account of various steps that have been taken,&rdquo; he said.&nbsp;</div>
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			A two-member Overseeing Committee, which includes former State Bank of India chairman Janki Ballabh and former chief vigilance commissioner Pradeep Kumar, has been set up by the Indian Banks&rsquo; Association in consultation with both the Reserve Bank of India and vigilance and investigating agencies, to settle NPAs in a prudent and transparent manner.&nbsp;</div>
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			Jaitley had last week said that banks should enforce their right and recover dues in the larger interest of the economy.&nbsp;</div>
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			&ldquo;The problem of NPAs is the next big challenge as far as Indian economy is concerned. We are now coming to a stage when a lot of effective steps &mdash; both legislative and in terms of policy &mdash; have been taken,&rdquo; he had said.</div>
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Gross NPA of PSBs has surged from 5.43% in 2014-15 to 9.32% in 2015-16

PSU banks to own certain projects where their assets are locked

PSUs to manage stressed assets of banks: Jaitley

Gross NPA of PSBs has surged from 5.43% in 2014-15 to 9.32% in 2015-16

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