Committee formed to examine Asset Reconstruction-Piyush goel

piyush goel

Mumbai : Central minister Mr. Piyush Goel told that a Committee has been formed under the

Chairmanship of Shri Sunil Mehta, non-executive chairman of Punjab National Bank to examine

the setting up of an Asset Reconstruction Company (ARC) and/or Asset Management Company

(AMC) for faster resolution of stressed assets involving multiple Public Sector Banks( PSBs).

The Union Finance Minister,  Shri Piyush Goyal  announced this today , while interacting with

the media at  Mumbai , after meeting with heads of Public Sectors Banks based out of western

and southern regions to resolve various issues concerning them.

The main objectives of the meeting were to discuss matters regarding improving credit flow,

while mitigating risks, to further strengthen the growing Indian economy and on achieving

global standards for Indian banks.

Shri Goyal further stated that this Committee will consider whether such an arrangement will be good for the banking system.

If it is considered advisable, the Committee will also consider the modalities by which such an ARC / AMC should be set up.

The Union Finance Minister also announced that that Bank of Baroda Chief Shri Jayakumar

will formulate a strategy regarding PSBs taking over good loans of banks under Prompt

Corrective Action (PCA).

He said that a consortium of banks will take over good loans of banks under PCA.

Shri Goyal said that SBI has over the years had a very robust mechanism by which fast credit

decisions are taken in a very transparent and speedy manner.

He said that he is given to understand that all the bankers are now wishing to set up such a

mechanism which will enable faster resolution of stressed accounts in a transparent and speedy manner.

The Minister also spoke of a proposal to have oversight committees who will bring in external expertise to bring in faster decision-making in Indian banks.

Shr Goyal informed that several other suggestions came up to strengthen the governance process and improve performance of Public Sector Banks.

Piyush goel infored that a strategy will be formed soon

piyush goelHe said that these suggestions have strengthened the confidence of the Government in the future performance of the banks.

Shri Goyal said that as owner of 21 Public Sector Banks, the Government of India stands committed to support each and every one of these banks.

He said that the Government believes that these banks have a very important role to play in the economic and social development of India.

He said that the Government stands committed to strengthen the operations of PSBs and to protect the interests of depositors, customers, employees and other stakeholders of these banks.

The Minister said that Indian Public Sector Banks have to come together to work together in a more cohesive fashion, to resolve the credit needs of MSMEs, exporters and other small and medium borrowers.

He informed that clauses have been devised by bankers to ensure that credit flow to good borrowers and good accounts happens smoothly.

The Minister expressed confidence that the various initiatives taken by the Government, the RBI

and the banks for an honest appraisal of the asset quality of the PSBs is strengthening these banks

to be able to meet the ever-growing needs of the common man and of MSMEs,

thereby ensuring that these banks are able to lend in a fair and transparent manner, at lower cost of credit.

The Minister said that the honest recognition of Non-Performing Assets and the resolution

framework under the Insolvency and Bankruptcy Code (IBC) has brought to light large amounts

of indiscriminate lending during the 2008 – 2014 period.

He said that the resolution process will help banks better serve the people of India, and that the

Government of India will all necessary support to ensure the success of this resolution process

in terms of both governance reforms and balance sheet management.

Shri Goyal said that the efforts being taken by the banks have strengthened the Government’s

commitment to support these efforts. He said that the Government and the RBI will together

be able to get the PSBs into good shape, making them the engine of the Indian economy once again.

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