In a meeting to deliberate on options for resolution of stressed assets in the banking sector, the Finance Minister Arun Jaitley discussed options on resolution of bad loans with RBI Governor Urjit Patel and other top officials in finance ministry. The meeting discussed the concept of Private Asset Management Company (PAMC) and National Asset Management Company (NAMC) for resolution of stressed assets. While, the RBI was not in favour of giving more time to big ticket loan defaulters, the Department of Financial Services made a presentation on strengthening tools to manage NPAs and resolution of stressed assets.
The meeting which was attended by RBI Deputy Governor Viral Acharya and S S Mundra, besides Chief Economic Advisor Arvind Subramanian, Principal Economic Advisor Sanjiv Sanyal, Financial Services Secretary Anjuly Chib Duggal and Corporate Affairs Secretary Tapan Ray, also discussed RBI's various schemes for tackling bad loans, including Scheme for Sustainable Structuring of Stressed Assets (S4A), Corporate debt restructuring (CDR), Joint Lenders Forum (JLR) and Strategic Debt restructuring (SDR).
CEA Subramanian had earlier suggested setting up a state-owned asset reconstruction company or a bad bank to deal with the problem of non-performing loans, but creation of a 'bad bank' to hold bad loans seemed not on top of alternatives in the meeting. Stressed assets make up 16.6 per cent of all loans in India, worst among the world's major economies. Gross non-performing assets or bad loans of public sector banks (PSBs) were pegged at over Rs 6 lakh crore at the end of December 2016.
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