Recovery of non-performing assets (NPAs) by public sector banks slowed down in FY 2016. Banks have recovered Rs 39, 986 crore—Rs 2, 556 crore down from the previous fiscal. They had recovered Rs 42,542 crore in FY 15.
Total NPAs of public sector banks stood at Rs 5,89,502 crore, 11.8 per cent of the total assets of banks.
While government has taken a number of measures to ensure speedy recovery such as passing the insolvency and bankruptcy code, increasing number of DRTs (debt recovery tribunals ) etc, the actual results of these moves will take time to show up.
RBI has also come up with a set of norms to help banks in dealing with NPAs. These include formation of joint lenders’ forum (JLF), flexible structuring for long term project loans to infrastructure and core industries (5/25 Scheme), strategic debt restructuring scheme (SDR) and sustainable structuring of stressed assets (S4A).
Chairman of Bank Boards Bureau, Vinod Rai had recently said that the top agenda for PSU banks was recovery from bad loans. The bureau had submitted a variety of plans to the finance ministry to improve loan recovery. “The entire idea is how to resolve the stressed asset issue. So lots of discussions are taking place; some of these things will fall into place very soon," Rai had said.