Concerned about the high level of bad loans in the banking sector, Finance Minister Arun Jaitley said on Saturday…
Concerned about the high level of bad loans in the banking sector, Finance Minister Arun Jaitley said on Saturday that in some cases NPAs levels is unacceptable.
Speaking to reporters after he met bankers at Gyan Sangam, Arun Jaitley said, “There is unacceptable levels of NPAs in some cases and banks must be given some leeway in dealing with commercial issues with a commercial mindset.”
According to RBI’s Financial Stability Report released recently, public sector banks (PSBs) continued to record the highest level of stressed advances at 12.9% of their total advances in September 2014 followed by private sector banks at 4.4%.
Capitaline data also showed that the level of NPAs in the banking system as on September 2014 stood at more than Rs 2.7 lakh crore.
PM Narendra Modi along with ICICI Bank’s MD and CEO Chanda Kochhar, FM Arun Jaitley, Maharashtra Governor C Vidyasagar Rao and CM Devendra Fadnavis launching ICICI group’s ‘digital village’ project in Mumbai on Friday. (Read story ) PTI
Therefore, he added, the government is giving a very high priority to the conclave and is listening to various experts and bankers.
“I’m sure this 2-day interaction is certainly going to pave way for a new roadmap,” Arun Jaitley added.
The minister also stressed on the need for banks to fund infrastructure and manufacturing sector in order to achieve higher growth.
“There is a need now for the banking system in India in a big way to finance infrastructure, manufacturing, infuse liquidity. There is also a need to conceive several reforms in the banking sector,” he said.
Recently the Reserve Bank of India said in a notification that banks can also fund existing projects under the 5/25 scheme paving the way for further flexibility in lending to the infrastructure sector.
The 2-day banking conclave being held here has the presence of all CMDs and EDs of public sector banks along with officials of the finance ministry and RBI.
Jaitley also said that there is a need to give further autonomy to banks and a need to understand what problems lenders are facing.
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