On Friday, the interim finance minister Piyush Goyal announced the set up a committee that over the period of next two weeks will deliberate on steps to tackle the menace of bad loans or non-performing assets of the Indian banking system.
The minister said, "A committee under the chairmanship of Sunil Mehta, non-executive chairman of Punjab National Bank, which over next two weeks will come out with their recommendations over setting up of an asset reconstruction company and/or asset management company for faster resolution of stressed assets".
After the centre scrapped several loan-restructuring schemes and tightened various other rules, the stressed assets problem of the banking sector is getting acute which is already reported to be burdened with NPAs to the tune of Rs. 9.5 lakh crore as of last year.
Goyal on the sidelines of his meeting with the chiefs of public sector banks in Mumbai further said, "the government and RBI would make all efforts to bring PSU banks into a 'good shape' so that they could once again become an engine of economic growth".
The meeting was convened to work out ways to improve credit flow in a risk mitigated manner and also help ailing banks reach global standards with respect to day-to-day banking operations and governance.
At the same time, measures to deal with accountsthat confront working capital crisis due to their exposure to PCA are also being stipulated.
To take better and faster decision, the banks are also considering setting up an overnight committee comprising of vigilance officials, external regulators and vigilance officials.
On the capital infusion front, Goyal asserted that government is committed to meet the capital requirement of public sector banks.
Also, the minister said that vacant executive positions at state-run banks will be filled up within the next 30 days time.