SCBs recover bad loans worth over Rs 8.6 lakh crore over last eight financial years: Bhagwat Karad
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Minister of State for Finance Bhagwat Karad has said that scheduled commercial banks (SCBs) recovered bad loans worth over Rs 8.6 lakh crore over the last eight financial years (provisional data), as a result of comprehensive steps taken by the government and RBI to check the cases of non-performing assets (NPAs) and bring them down. He also said that the occurrence of NPAs is normal, although an undesirable, corollary to the business of banking.
The minister noted that several factors -- including prevailing macroeconomic conditions, sectoral issues, global business environment, delayed recognition of stress by banks, aggressive lending during upturns, improper risk pricing, and poor credit underwriting -- are attributed to NPA build-up. He said the government and RBI regularly issue guidelines and have taken several initiatives aimed at resolution of long-standing stressed assets on the books of banks as well as timely identification and recognition of stress immediately upon default and take corrective action for mitigation of the same.
He further said these measures complement the statutory provisions already available to lenders for recovery and resolution, including, the Recovery of Debts and Bankruptcy Act, 1993, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and Insolvency & Bankruptcy Code, 2016 (IBC).
