The Finance Minister, Arun Jaitley, on Monday expressed confidence over achieving meaningful progress on the issue of resolution of stressed assets, as “precipitative action” gets taken in pursuance of the recent ordinance on banks’ bad loans.
The Reserve Bank of India (RBI) is at a fairly advanced stage of preparing list of those debtors where resolution is required through the Insolvency and Bankruptcy Code (IBC) process, Jaitley told a press conference after his annual review of the performance of public sector banks (PSBs) during 2016-17.
Jaitley highlighted that already as many as 81 cases have been filed under the IBC process with as many as 18 coming from financial creditors (mostly banks).
“These cases (81) are already before the National Company Law Tribunal under the IBC process”, Jaitley added.
Advisory panel
RBI Deputy Governor S S Mundra said that an internal advisory committee has been constituted by RBI to help the central bank “identify the accounts” that needed to be referred for the IBC process.
Active work is going on under this panel and soon action points will emerge, he said.
“This committee will help frame the guidelines basis which the accounts will be identified,” Mundra later told BusinessLine .
The Centre had in early May come up with an ordinance — popularly referred as bad loan ordinance — was seen as the “brahmastra” to end the paralysis over bad loans.
One of the important components of this ordinance was enhancing the size and scope of the oversight committee and identification of such accounts that can be quickly taken up under the IBC process.
At last count, bad loans in the banking system had crossed Rs. 8 lakh crore, prompting the Centre to issue an ordinance to deal with the high stressed assets in the system.
This ordinance had empowered RBI to identify specific stressed assets and refer them for initiating insolvency and bankruptcy proceedings.
The bad loan ordinance is expected to give comfort to bankers to take decisions based on commercial considerations.