Around 24 banks sign-in for Project Sashakt to combat NPAs

Indian Currency

Indian CurrencyIn a bid to speed up the recovery of Non-Performing Assets (NPAs), around 24 banks have signed inter-credior agreement (ICA) framework.

The framework is a part of the Project Sashakt, a report on NPAs submitted earlier this month and drafted by the Sunil Mehta (non-executive chairman of Punjab National Bank). Tthe three-member panel also includes State Bank of India (SBI) chief Rajnish Kumar and Bank of Baroda head PS Jayakumar.

This initiative will serve as a combat platform for the banks and financial institutions, that are trying to curb the rising menace of bad loans, paralyzing the 12 per cent of the system now.

“Today, we’ve got the inter-creditor agreement executed. Most banks have already got their board approvals, and other are in the process of getting the same. The objective is to use this framework for faster resolution of stressed assets,” said Sunil Mehta Punjab National Bank.

 He further revealed that 18 public sector banks led by the State Bank, three private sector banks and the Exim Bank have already signed the framework. Other banks will also be signing the agreement after receiving nod from their board, he added.

 “By end-July, this agreement will get operational and we are hopeful that by and large by this will be signed by all banks,” Mehta said, adding so far, no foreign banks has signed the agreement as they have to get board approvals.

 “In the case of foreign banks they have to go to their head offices for approvals. It is a tedious process for them to fully understand the regulations on this matter. I am quite confident that they will be able to get approvals,” he said.

As per Mehta, the motive behind this step  is to resolve the problem of stressed assets swiftly.Official figures say that as of March 2018, Rs 3.10 trillion worth of bad loans were reported in the Rs 50 crore-500 crore category and Rs 2.10 trillion under Rs 50 crore ticket size.

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