New Delhi:(IANS) State-run banks had total outstanding corporate loans of over Rs.2.3 lakh crore by end of 2014-15, parliament was told on Tuesday.
“A sum of Rs.23,52,246.86 crore is outstanding corporate loan of the public sector banks (PSBs) as on March 31, 2015,” Minister of State for Finance Jayant Sinha told the Rajya Sabha in a written reply.
The minister said that among the major steps taken by the government along with the Reserve Bank of India for containment of banks’ non-performing assets (NPAs) include seting up six new “Debt Recovery Tribunals (at Chandigarh, Bengaluru, Ernakulum, Dehradun, Siliguri, Hyderabad) to speed up the recovery of bad loans of the banking sector”.
“RBI has tightened the norms for Asset Reconstruction Companies (ARCs), vide guidelines dated August 5, 2014, where the minimum investment in security receipts should be 15 percent, which was earlier 5 percent,” the minister said.
He said that on April 28, a meeting was convened at Mumbai to resolve the stalled projects’ issue.
Sinha said, earlier this month, the government is working on a comprehensive package to help stressed state-run banks and improve the flow of credit for industry.
The minister had also said the government was trying to improve corporate governance and strengthen management at state-run banks, while also overhauling annual targets for public sector lenders to increase the focus on efficiency.
According to the RBI, gross NPAs as a ratio of total loans could rise to 4.8 percent by September from 4.6 percent in March.
Finance Minister Arun Jaitley last month said his ministry is currently preparing a list of projects stalled due to lack of finance to set in motion the process of their revival and thus bring down the NPAs of banks.
Gross non-performing assets, or distressed loans, of state-run banks have gone up to Rs.260,531 crore as in December 2014. In the fourth quarter (January-March), NPAs had come down from 5.64 to 5.2 percent.
As per the finance ministry’s Economic Survey published before February’s union budget, stalled projects as in December-end amounted to Rs.880,000 crore.