 "Arun Jaitley")
The Reserve Bank of India (RBI) and the banks concerned will sit and draw up a list of about 40 top defaulters for resolving the issue of mounting non-performing assets (NPAs) after the central bank has been empowered by the ordinance promulgated on Friday, Finance Minister Arun Jaitley said on Saturday.
"RBI along with banks will make a list. RBI has been empowered to direct banks to initiate insolvency process and set up committees in relation to Joint Lenders' Forum (JLF). If 10 banks sit together and say, this is the manner in which we will resolve and the oversight committee approves it," he told NDTV.
Maintaining that it was a new experiment being tried for resolution of bad loans, the minister acknowledged that this was one area that they have not been able to tackle, so an attempt has to be made.
"This mechanism can work more effectively."
Jaitley said that the problem was of top 20-30-40 accounts. "Either these people bring in joint venture partners or bring in new management. In commercial world, decisions become commercially viable. These are independent decisions."
He said that in the context of public sector banks, the senior management is deterred that the decisions which are commercially viable, tomorrow the accountability norms are unrealistic. "Officials have been hauled up. Today insolvency mechanism is there."
