NPA recovery doubled against the Public Sector Banks in the first half of the current year

 

 

Mumbai, December 27: The recovery of the Public Sector Banks against NPAs has enlarged in the first half of the current year as compared correspondent period last year. In response to a parliamentary question the Finance Ministry publicized that Public Sector Banks following amendments to the Banking Regulation Act, the Reserve Bank of India directed banks to initiate insolvency proceedings, the PSBs reported recovery of Rs 60713 crores against NPAs, which is double the amount recoeverd in the corresponding period last year.

 

The government further added that most significant returns high value accounts are expected. The government has however cited the ‘recognition, resolution, recapitalistaion and reforms’ approach to strengthen PSBs in yielding the positive results. Cracking down on cronies, Modi government unearthed NPAs hidden by Congress government worth Rs 9 lakh crore. With Modi's Insolvency & Bankruptcy Code & tough laws for economic fugitives, a clean & effective recovery system got enacted in the country.

 

 

Meanwhile the Finance Minister has urged to say that downward slide in NPAs will commence after further capital infusion. “ This is going to aid in improving the lending capacity of the banks. Such more recovery will come the way in coming days. Banks have mobilised Rs 24400 crores from markets so far citing the reforms and recognitions.”

 

“As per the RBI data on global operations constituting the provisional data for September 2018, NPAs for scheduled commercial banks reduced by Rs 283770 crores due to recoveries”, he added further.

 

The directive also urged to say that rise in NPAs was in good part due to banks being made to recognise stressed assets as NPAs and the withdrawal of restructuring schemes in 2017-18. “This led to honest appraisal of the state of bank finances and the role played by indiscreet and risky lending in the past.”, it added.

 

An asset, including a leased asset, becomes non-performing when it ceases to generate income for the bank. According to the policy released by the RBI in year 2001-02, in case of absence of clear agreement between the banks and the borrowers, the banks should adopt an accounting principle and exercise the right of appropriation of recoveries in a uniform and consistent manner.