New framework to deal with toxic assets soon

While they have restructured loans, there is still question mark over the success of such a work-out

The Union Cabinet might within the next few weeks consider a new framework to deal with toxic assets worth Rs 6 lakh crore in the Indian banking system, a top government official said.

The proposed framework envisages legislative action through amendments to the Prevention of Corruption Act (PCA) and Banking Regulations Act to empower the banks further to tackle non-performing assets (NPAs), especially the top 35-40 NPAs in value terms, which constitute 60% of all toxic assets.

The presumption is that the other systems in place in banks and the Reserve Bank of India (RBI) have enough teeth to deal