The government is expecting that bad loan recoveries are likely to surpass Rs 1.80 lakh crore target for the current financial year (FY19), through the new Insolvency and Bankruptcy Code (IBC) and other means. The Finance Ministry said some big accounts are in the process of getting resolved, while some more are lined up for resolution under the IBC.
Banks hope to write back more than Rs 1 lakh crore alone from the resolution of 12 Non-performing asset (NPA) cases referred to insolvency proceedings by the Reserve Bank of India (RBI) in its first list. Banks recovered Rs 36,551 crore in the first quarter of 2018-19. During 2017-18, banks had recovered Rs 74,562 crore.
Satisfied with the progress of IBC, Finance Minister Arun Jaitley had said ‘now people have become broadly aware that the rules of the game in India have changed. The banks won't chase you anymore, you will have to chase them.’ He had said as a result of this, recoveries have picked up and added that recoveries are not just because resolutions have taken place in the NCLT but they have also picked up because of fear that if they cross redline they will be condemned to IBC process.