GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO 3105
TO BE ANSWERED ON THE 7th AUGUST, 2015
SHRAVANA 16, 1937 (SAKA)
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI JAYANT SINHA)
(a) to (c): In its Financial Stability Report (FSR),June 2015, Reserve Bank of India informed that under the baselines scenario, the Gross Non Performing Assets (GNPAs) ratio of all Scheduled Commercial Banks (SCBs) may increase to 4.8% by September, 2015 from 4.6% as of March, 2015 which could subsequently improve to 4.7% by March, 2016. However, if macroeconomic conditions deteriorate, the GNPAs ratio may increase further and it could rise to around 5.9% by March, 2016 under a severe stress scenario.
A number of steps have been taken by the Government and Reserve Bank of India. Government has decided to establish six (6) new Debt Recovery Tribunals (DRTs), to speed up the recovery of bad loans of the banking sector. In addition, the Government has advised Public Sector Banks (PSBs) to constitute a Board level Committee for monitoring of recovery and to increase the pace of recovery and manage NPAs. To remove bottlenecks in the recovery of bad debts The Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2012 has been passed by Parliament and has come into force from 15.01.2013. RBI has also taken a number of steps to resolve the NPA issues. In January, 2014 it came out with “Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders : Framework for Revitalizing Distressed Assets in the Economy,” in which the banks have to start acting as soon as a sign of stress is noticed in a borrower’s action and not wait for it to become a NPA.