Bankers are getting disgruntled over the government's indifference in helping banks to get rid of their non-performing assets (NPA).
"Asking banks to form asset reconstruction companies without strengthening the legal framework is meaningless," says a banker.
Bankers point out that the finance ministry's efforts in addressing the problem of weak legal mechanism and infrastructure have been dismal.
While the finance minister had voiced his commitment to strengthened the debt recovery tribunal (DRT) system in all the states, the fact remains that even after seven months of the Budget announcement, there has been no concrete steps taken by the ministry in this direction.
They pointed out that Maharashtra accounts for more than 50 per cent of bank NPAs and in Mumbai where most of the corporates have their head offices there is no DRT. And, in the last six months the government has made no move to install one either.
For the appellate authority in Mumbai, bankers point out that the government has not found out any replacement even after two months of Justice Mehta's retirement.
The story is the same in places like Calcutta and Ahmedabad. In the case of Calcutta there has been no presiding officer for the last three months and in the case of Ahmedabad the place is vacant for the last nine months.
Sources in Indian Banks' Association say in these cases the government has been asking presiding officers of the neighboring state capitals to dispose off the cases when the fact remains that they are not able to deliberate on cases within their own jurisdiction.
"All that the government has been doing is to appoint committees, asking banks to furnish data on their NPA levels and asking them to form NPA recovery cells. But up till no concrete measures have been initiated," quips a senior bankers in SBI's NPA recovery cell.
Sources say that the government is still to formulate the procedural framework for appointing of DRT judges. Top bankers say that the issue has been delayed because of lack of co-ordination between the finance ministry, legal ministry, the Supreme Court and the state high courts. The commitment of the state government is essential since the judiciary has to come from the states.
According to bankers, the government's move of withdrawing NPA-based money suites from the civil courts and putting them within the jurisdiction of DRTs have in fact worked to worsen the situation. With many DRTs witnessing no replacements after the retirement of presiding officers, banks are seeing no further progress in their NPA cases.
