New Delhi: Concerned over rising bad loans, Finance Minister P Chidambaram on Monday asked banks to take firm steps to recover loans saying the country cannot afford to have "affluent promoters and sick companies". (JPN/Agencies)
"We wish banks take firm steps to recover NPAs. Promoters have to bring in additional money and companies have the duty to pay back loans," Chidambaram said.
The Finance Minister said recovery has improved in the past one or two months and banks will take more steps to deal with the rising NPAs without hurting the industry.
"We cannot have an affluent promoter and a sick company. Promoters must bring in money ... Without doing anything that will kill the business of industry, banks will have to take steps to recover the NPAs," he said.
Stalled projects a matter of worry
Gross NPAs of PSU banks have risen from Rs 71,080 crore as on March 2011, to Rs 1.55 lakh crore as on December 2012. He further said that stalled projects in sectors like power, coal, iron, steel and road transport is a matter of worry.
As many as 215 projects with an investment of Rs 7 lakh crore are currently stalled and banks have disbursed about Rs 54,000 crore loan towards it, Chidambaram said.
As far as new projects are concerned, he said, they are also in the same five sectors. There are 126 new projects for which the outlay is Rs 3.55 lakh crore and amount sanctioned by banks against these was Rs 43,000 crore.
"Real problem is in road and power. There are 68 new projects in the road sector. There are 40 new projects in the power sector. We have to get them going," he said adding that the ministries concerned would look into the matter so that projects are accelerated.
Coal linkage, land acquisition reasons for delay in projects
Chidambaram said the government has identified the main reasons due to which projects were stalled.
"The main reasons are coal linkage, environment clearances, land acquisition," he said adding there is now a greater degree of confidence than what was there 6 months ago.
"Now that we have resolved some issues relating to environment clearance, and NHAI, more coal blocks are being made available... Ministry will start taking sectoral meetings with state governments and promoters to see how we can move these forward," he said.
On liquidity situation, Chidambaram said the Reserve Bank Governor will take steps in the monetary policy review on Tuesday.
"The RBI Governor is also aware of issues of liquidity and I am sure he will address the issue of liquidity," he said.
Replying to a question on charges of money laundering by certain employees of three private sector banks, Chidambaram said the RBI and the Finance Ministry are looking into the issue.
"Secretary, Department of Financial Services is looking at it closely. RBI is looking at it closely. They (banks) themselves have instituted enquiries. Let's give them a Little time to come up with the report of the enquiry," he added.
FM on proposed ‘All Women Bank’
On the proposed all women bank, Chidambaram said the expert committee headed by M B N Rao for the purpose met for the first time on Saturday and the panel will give a blueprint on the bank by April end.
The Finance Minister further said all PSU banks have also shown interest in opening all-women branches. In next six months, he said, all state-run banks will have such branches.
CCI meet after March 22
He further said the Cabinet Committee on Investment (CCI) would meet after March 22, when Parliament goes into recess. The CCI, headed by Prime Minister Manmohan Singh, has met twice and discussed projects in sectors like coal, power, oil and gas.
Chidambaram said he would meet the chiefs of PSU banks in the first and second week of June after the audit of annual accounts of the institutions.
New Delhi: Concerned over rising bad loans, Finance Minister P Chidambaram on Monday asked banks to take firm steps to recover loans saying the country cannot afford to have "affluent promoters and sick companies".