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FSDC panel likely to discuss asset quality of banks, fraudulent scheme issues

03 Jun 2013 Evaluate

The Financial Stability and Development Council (FSDC) panel is likely to discuss on a range of issues relating to the financial sector development and stability, which includes issues relating to inter-regulatory coordination. The panel would also discuss issues like asset quality of banks and fraudulent investment scheme.

The FSDC’s sub-committee, headed by RBI Governor D Subbarao, would also consider the views of other sector regulators including Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and Pension Fund Regulatory and Development Authority (PFRDA).

The agenda for the meeting include rising NPA in the banking sector and restructuring of loans. The gross NPAs of PSU banks have risen to Rs 1.55 lakh crore as on December 2012 from Rs 71,080 crore as on March 2011, in which corporate accounts constitute 53.68 percent. Further, about 172 corporate accounts constitute NPAs of more than Rs 100 crore each at the end of December 2012 and the amount involved in such cases is to the tune of Rs 37,194 crore.

Recently, concerned over the rising NPAs of Indian banks, the Reserve Bank of India (RBI) has tightened rules for restructuring of most types of loans in line with global practices. The central bank has also directed the banks to disclose details of all capital instruments issued at least on a half-yearly basis along with financial earnings report to meet the Basel III requirement to provide a description of the main features of capital instruments.

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