New Delhi: The steps taken by the government over the past few years – from imposing the Code of Bankruptcy & Bankruptcy (IBC) and strengthening other laws for administrative actions – has helped bank restore around RS 5.5 lakh crore bad debt, including approaching Rs 1 lakh crore from accounts that are technically eliminated, said high-ranking officials.
And, with the indication that the accumulation of non-performing assets (NPA) is lower than anticipated, especially among large companies, the government believes that government managed lenders well to meet credit requirements, considering they are adequately utilizing adequately.
In addition, government sources argue that with the ratio of the coverage of the provisions of 83.7%, the public sector bank is adequately protected against the potential hit.
“Overall, even though the pandemics, extraordinary turnarounds for public sector banks.
Recent reforms and proposed asset reconstruction companies will help cleanse their balance sheets further and make fresh capital available from the sale of bad assets, which will re-encourage credit growth, “Said a senior Ministry of Finance officer.
Meanwhile, discussing “Remove” more than Rs 8 Lakh Crore for the past seven years, the government believes that this is technical and actually intended to bring transparency in the bank balance sheet.
“This is done in accordance with the provision norms set by the RBI that the potential loss is recognized in the book.
Even if the loan has been abolished, the bank makes every effort to recover it,” said the high ranking officers.
This source added that these efforts have resulted in RS 99,996 Crore being recovered from the loan account, which includes several major recovery through the IBC process in the case of Bhushan Steel, Bhushan Power & Steel, Essar Steel, among others.
Separately, the bank has succeeded in recovering money from other writing cases such as Kingfisher.
Since March 2018, the government-owned lender has recovered Rs 3.1 Lakh Crore.
The source said that banks have used various sources – internal accruals, increasing funds from the market and capital infusion by the government – to comply with regulatory requirements.
“Internal accruals and market improvements for as much as 70% of the provision are carried out over the past few years,” said an officer.