Mumbai, June 8 (IANS) The government has set up a committee to examine the establishment of an Asset Reconstruction Company or an Asset Management Company for faster resolution of stressed assets involving multiple public sector banks, Finance Minister Piyush Goyal announced here on Friday.
The committee is chaired by Sunil Mehta, the non-executive Chairman of Punjab National Bank, and would examine whether such an arrangement would be good for the banking system.
If found advisable, the committee will work out the modalities to set up the ARC/AMC, Goyal he told mediapersons here.
He was speaking after meeting with the PSB heads of western and southern regions to resolve various issues affecting them, including improving credit flow, while mitigating risks, to further strengthen the growing Indian economy and achieving global standards for Indian banks.
Goyal also announced that Bank of Baroda chief P.S. Jayakumar will formulate a strategy regarding a consortium of PSBs taking over good loans of banks under Prompt Corrective Action.
Speaking about State Bank Of India (SBI), Goyal said it had a very robust mechanism by which fast credit decisions are taken in a very transparent and speedy manner.
Goyal said he believed that all bankers are now desiring to set up a similar mechanism to enable faster resolution of stressed accounts in a transparent and speedy manner.
In this regard, he discussed a proposal for oversight committees which would bring in external expertise to effect faster decision-making in Indian banks.
The minister added that many suggestions wree received to strengthen the governance process and improved performance of PSBs which have boosted the government’s confidence in the future functioning of the banks.
Goyal assured that as owner of 21 PSBs, the government was committed to support each and every one of them as they play a very important role in India’s socio-economic development.
Besides, he said the government was committed to strengthen the PSBs’ operations, protect the interests of depositors, customers, employees and all other stakeholders.
He urged the Indian PSBs to come together and work in a more cohesive fashion to resolve the credit needs of MSMEs, exporters and other small/medium borrowers.
Goyal informed that clauses have been devised by the bankers to ensure that credit flow to good borrowers and healthy accounts happens smoothly and the every-growing needs of the common man and other borrowers are met.
The minister said that honest recognition of Non-Performing Assetes and the resolution framework under the Insolvency and Bankruptcy Code has brought to light large amounts of indiscriminate loans during the 2008-2014 period.