FinMin discusses 85 large proj, NPAs with RBI, banks
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After a specially-convened meeting at the RBI headquarters, Financial Services Secretary Hasmukh Adhia said a total of 85 such projects, from the power, steel, roads and ports sectors, with an outstanding bank credit of Rs 3.51 lakh crore were discussed.
Efforts were made to analyse the various reasons for stress in the infrastructure projects, he told reporters at the Reserve Bank headquarters, where the meeting was held. He said 4 per cent of projects discussed today were classified by lenders as NPAs.
Those present at the meeting included Reserve Bank Deputy Governor SS Mundra, special secretary at the Union Power Ministry RN Choubey, State Bank of India chairman Arundhati Bhattacharya and the chairman of the bankers' lobby group IBA, TM Bhasin.
Around 13 public sector lenders were part of the meeting.
Addressing the media, Mundra said the central bank will examine all issues related to the stalled projects.
It can be noted that the Finance Ministry has been trying to iron out issues regarding the stalled projects for quite some time and the previous Manmohan Singh government had also convened similar meetings.
Concerned over rising bad loans in infrastructure sector, the Finance Ministry had called the meeting of heads of public sector banks to prepare a roadmap for clearing bottlenecks that hamper implementation of large projects.
The meeting was aimed at helping the department crystalise actions required by banks, the Finance Ministry and other central ministries as well as support required from the Reserve Bank, he had said.
One of the major reasons for rising NPAs for PSU banks is non-implementation of infra projects for reasons like, absence of fuel linkage, environment clearances and land acquisition.
The level of NPAs and the stressed projects of the public sector banks have been showing an upward trend in the last four quarters. Gross NPAs of public sector banks rose sharply to 5.33 per cent in September 2014 compared to 4.72 per cent at March 2014. Total distressed assets was about 12 per cent of total advances as of December 2014.
About 300 stalled projects involving a staggering investment of Rs 18.13 lakh crore are pending for resolution. (PTI - Business Standard)
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