 "Need to strengthen loan restructuring mechanism to tackle NPAs: MoS Finance")
"We need to strengthen the loan restructuring mechanism... It will, along with various other measures taken by both the government and the RBI, help in bringing NPA situation under control," he told PTI.
Most recently, he said, the government brought in the ordinance giving wide-ranging legislative powers to the Reserve Bank on the non-performing asset (NPA) front.
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The ordinance authorises the Reserve Bank to issue directions to any bank to initiate insolvency resolution process in the event of a default under the provisions of the Insolvency and Bankruptcy Code (IBC), 2016.
According to some estimates, banks are sitting on unrecognised stressed loans worth Rs 7.7 lakh crore in corporate and SME sectors and expect around 35 per cent of them to slip into the NPA category in the next 12-18 months.
There is a likelihood of Rs 2.6 lakh crore of corporate and SME loans, which are 3.2 per cent of total bank credit to be recognised as stressed loans by 2019.
Stressed loans include restructured assets that carry the risk of turning into NPAs.
On the three-year achievements of the Modi government, Meghwal said: "Whenever the review takes place, 2017 will be known as the year of economic reforms."
The highlights so far this year are the advancement of the budget, the merger of the railway budget with the general, the budgetary passage before March 31 and the proposed GST rollout from July 1, the minister added.
Terming jobless growth criticism as a mere political statement, Meghwal dismissed it as something not based on facts as "political opponents have coined this as a terminology".
"The informal sector created a lot of job opportunities through various schemes of the government like Mudra, Stand Up India, Start Up India," he stressed.
More than 7.45 crore entrepreneurs have been given bank loans under the Pradhan Mantri Mudra Yojana as part of the government's effort to fund the unfunded. Easy loans have been provided to small businesses like barber shop owners, cobblers and cycle mechanics etc under the Mudra Yojana without any collateral, he said.
"More than 7.45 crore small entrepreneurs received loans worth more than Rs 3.17 lakh crore. Of this, 70 per cent of the beneficiaries are women," Meghwal pointed out.
About 18 per cent of the borrowers are from the scheduled caste category and 4.5 per cent scheduled tribe while other backward class accounted for almost 34 per cent.
Under the Mudra Yojana, a loan of up to Rs 50,000 is given under the 'Shishu' plan, between Rs 50,000 to Rs 5 lakh under 'Kishore', and between Rs 5 lakh to Rs 10 lakh under 'Tarun'.