The government has no plans to waive off corporate loans and banks while banks have advised to either resolve their issue of non-performing assets (NPAs), or stressed loans speedily, or start insolvency proceedings in this regard, Parliament was informed on Friday.In a written reply to the Lok Sabha, Minister of State for Finance Shiv Pratap Shukla also said that the stressed advances ratio of banks fell to 11.75 per cent by end-September, from 12.1 per cent by the end of June this year."No proposal for waiver of corporate loan is under consideration of the government," he said. Referring to data from the National Company Law Tribunal, Shukla said that 2,434 fresh cases had been filed with it till end-November and 2,304 cases of winding up of companies have been transferred from various high courts since the Insolvency and Bankruptcy Code, 2016, came into force.Of these, 2,750 cases had been already disposed of, while 1,988 cases were pending up to the end of November.Shukla also said the Reserve Bank of India (RBI) has already identified 12 accounts adding up to 25 per cent of the NPAs for insolvency proceedings under the Insolvency and Bankruptcy Code which provides for a time-bound insolvency resolution process. These 12 accounts constituted about 25 per cent of the gross NPAs of the banking system.
Also on Friday, replying to the debate in the Lok Sabha before it passed the amendments to the IBC, Finance Minister Arun Jaitley said that banks and creditors would need to take a "haircut" on their bad loans, even as defaulting promoters could make their businesses operational again by paying the outstanding interest on the loan,A haircut signifies accepting a lower than market value for the asset for a resolution of the NPA. Bad loans of state-run banks amounted to a staggering Rs 7.34 lakh crore by the end of second quarter of the current fiscal ended September, most on account of corporate defaulters, as per official data. RBI data last week, however, showed that NPAs of private sector banks stood at a much lower level of around Rs 1.03 lakh crore by the end of the July-September quarter.It said leading corporate entities and companies accounted for around 77 per cent of the total gross NPAs of banks from domestic operations.
Among the major government-owned banks, State Bank of India had the highest level of NPAs at over Rs 1.86 lakh crore, followed by Punjab National Bank (Rs 57,630 crore), Bank of India (Rs 49,307 crore), Bank of Baroda (Rs 46,307 crore), Canara Bank (Rs 39,164 crore) and the Union Bank of India (Rs 38,286 crore).Up to end-September, among private banks, ICICI Bank had the most amount of NPAs at Rs 44,237 crore, followed by Axis Bank (Rs 22,136 crore), HDFC Bank (Rs 7,644 crore) and Jammu and Kashmir Bank (Rs 5,983 crore).