Fighting NPAs: Government to give more power to PSBs

Finance Minister Jaitely has offered more power to PSB management including a protection to bankers on bona fide decisions to settle bad loans. The other two measures include more legal empowerment to banks and strengthening the stressed asset funds.

The decision came at the meeting between the Finance Minister and the Chief Executives of PSBs. Slowing economy and rising wilful default trend has created high level of NPAs especially for PSBs. Many PSBs have registered big losses in the last quarters. The leader SBI has made more than 12000 crores provisioning to cover up NPAs. Punjab National Bank recorded Rs 5367 crore losses whereas Bank of Baroda recorded Rs 3230 losses during the last quarter.

More freedom to the bank management is expected with the conferring of resolution rights to settle NPAs to bank management. The government will consult the Indian Bank Association on specific provisions to protect the bank managers while settling NPAs.

Regarding legal provisions to tackle NPAs, the SARFAESI Act will be amended; most probably in the next session of the Parliament. “These set of new laws along with SDR (Strategic Debt Restructuring) would definitely empower the banks to handle the situation” Jaitely has remarked.


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