The Reserve Bank of India (RBI) has taken right measures to deal with the state-run banks’ huge non-performing assets (NPAs) or distressed loans, says a top International Monetary Fund (IMF) official.
“The RBI Governor (Dr Raghuram Rajan) has taken absolutely right steps regarding the bank balance sheets,” said Christine Lagarde, IMF Managing Director, at the Advancing Asia conference, co-hosted by the Union Government and IMF.
Lagarde said the Indian Government is also on the right track towards bankruptcy and insolvency laws, which would help deal with the bad loans problem.
Speaking at the conference, Finance Minister Arun Jaitley said that it is expected that the government will enact the bankruptcy and solvency, along with the Goods and Services Tax bills in the later half of the budget session of parliament beginning April 20.
According to parliament, the NPAs of public sector banks (PSBs) have increased by around Rs. 1 lakh crore in the first nine months of the current fiscal.
“The gross non-performing assets of the PSBs has grown up to 7.30 percent (Rs. 3,61,731 crore) as of December from 5.43 percent as of March 2015 (Rs. 2,67,065 crore) which was an increase of Rs. 94,666 crore over nine months of the current fiscal,” Jaitley wrote to Rajya Sabha.