Banks have all powers to deal with wilful defaulters: Arun Jaitley

The major stress on state-run banks owing to bad loans will progressively commence easing once issues are gradually resolved in various sectors, including implementation of reforms in the power sector, Finance Minister Arun Jaitley said on Monday. The meeting, also attended by secretaries of various other government departments, focussed on how best to ensure adequate bank funding to some key focus sectors of the government like micro, small and medium enterprises, start-ups, agriculture, housing, education, food processing, rural development, solar energy and textiles.

The gross non-performing assets (NPAs) of PSBs rose to 6.03 percent at June-end, as against 5.20 percent in March 2015. He said some recent, sector-specific announcements by the government were aimed at reducing this stress which should help bank NPAs and impaired assets.

Concerned over “unacceptable” NPA levels, Finance Minister Arun Jaitley today discussed with PSU bank chiefs the issue of wilful defaulters and said that the lenders have all the powers and autonomy to deal with them.

In the last few weeks, the government has announced a debt recast package for state electricity boards, higher import duties to aid the steel sector and steps to make road projects more viable. “The steps of RBI and banks will improve quality of assets”.

The banks briefed the meeting about various efforts that they are taking in the sector, an official statement said.

At the same time, secretary, Ministry of Food Processing Industries briefed the participants about the utilization of Special Fund of Rs 2000 crore set-up to provide affordable credit to designated food parks (including mega food parks) and food processing units located therein.

Besides banks’ health, today’s meeting also discussed social sector schemes of the government like the Jan Dhan Yojana, pension schemes, Mudra etc and the contribution of public sector and private banks to these schemes.