New Delhi: Union Cabinet has cleared the proposal to provide government guarantees Rs 30,600 Crore for security revenues issued by the National Asset Reconstruction Company (NARCL) as part of a bad loan settlement, Minister of Finance Nirmala Sitharaman said on Thursday.
Briefing of reporters about the decision, he said the bank had restored Rs 5.01 lakh crore from unpaid loans in the past six years.
Of this amount, RS 3.1 Lakh Crore has recovered since March 2018.
Here are the important points of the address – Union cabinet yesterday approved the central government guarantee to RS 30,600 Crores to return with NARCL.
In 2015, the review of the quality of bank assets has occurred, this review reveals a high incidence of non-performing assets (NPA).
In 2018, only two of the 21 public sector banks were profitable.
But in 2021, only two banks reported losses.
This center appears with a 4R strategy – recognition, resolution, recapitalization and reform for the banking sector.
After recognition, the quantification of the NPA began in a planned way and the bank began to recover money.
In Indian debt resolution companies, public sector banks and financial institutions will accommodate 49% of shares.
The government will establish an Indian debt resolution company, apart from NARCL.
Government guarantees for security revenues will be for 5 years.
All bad loans brought to NARCL must be completed within 5 years.
Public sector banks to accommodate 51% of shares in NARCL, 49% in debt management co; The government in the process of arrangement of Indian debt resolution, 15% cash payment will be carried out to the Bank for NPA based on several assessments, 85% will be given as a guarantee receipt.
For security acceptance so that the value is intact, the government must provide backstop settings, therefore GOD GOVT RS 30,600CR is cleaned by the Union cabinet.
Watch Union Cabinet Approve Government Guarantees to Rs 30,600 CR for Evil Banks