Govt asks public sector banks to submit details of wilful defaulters by month-end

The finance ministry has asked public sector banks (PSBs) to submit details of big wilful defaulters by the end of this month as the government is keen to initiate the process of recovery.

The ministry will discuss the issue of bad loans with the heads of PSBs at a meeting scheduled for April 28.

The government is worried as gross nonperforming assets (NPAs) of PSBs crossed Rs 2.6 lakh crore as on December 2014.

The top 30 defaulters are sitting on bad loans worth Rs 95,122 crore, which is more than onethird of the gross NPAs of PSBs.

Gross NPAs rose sharply to 5.33 per cent of total loans in September 2014.

To check the rising number of wilful defaults, both the government and the Reserve Bank of India (RBI) has asked banks to take strict action against such defaulters.

If warranted, they can initiate criminal proceedings including filing of first information reports.

At the same time, the government wants to ensure that big projects facing genuine difficulties should not be starved of funds as otherwise growth would be hit.

The meeting, in which senior RBI officials will also participate, will discuss problems faced by project promoters and banks related to major infrastructure projects in sectors like road, power, steel and shipping.

"In view of the fact that the level of NPAs and stressed projects of PSBs have been showing an upward trend in the last four quarters, the Department of Financial Services will hold the meeting of CMDs of public sector banks", according to an official statement.

The objective of this meeting is to understand problems faced by project promoters and banks in retrieving NPAs and to find out a solution to such problems.

"A case-by-case review of some of the major infrastructure projects would be undertaken by the ministry in presence of senior officers of the ministries of power, steel, transport, shipping and the RBI", it added.