Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

Banks need incentives to clean up bad loans: SBI

Author: IANS/Thursday, March 2, 2017/Categories: Banking & Financial Services

Banks need incentives to clean up bad loans: SBI

New Delhi (IANS) - The State Bank of India (SBI) said on March 1 that the Reserve Bank of India (RBI) needs to give some incentives to banks for resolution of bad loans in terms of provisions or extending the deadline of March 31 to clean up their books.
"Wherever resolution is being attempted, some kind of incentivisation from RBI in terms of NPA (non-performing assets) recognition date of March 31, 2017, or in terms of provisions should be given. If this relaxation can be given, banks will be encouraged for faster resolution," SBI MD Dinesh Kumar Khara said. 
 
"Various professional agencies have got into the process of resolution. I think consultants are also coming up for managing the stressed assets. Things are happening but one month is too short for definite results," he said. Khara said that though the banking sector is prepared for the worst, whatever be the regulatory guidelines, it is also putting forth its viewpoint. 
 
He also notes that in every case, the public sector banks are assured of government support. "The budget statement was clear that if required the government would not hesitate to support the banks. They will find the means and ways to fund banks. I don't expect problem on this count provided banks have justified reason for additional capital," he said.
 
Meanwhile Finance Minister Arun Jaitley had sidelined the idea of bad bank on the account that the taxpayers' money should not be used to pay for corporate defaulters to banks. "Creation of a bad bank or a public sector agency is one of the suggestions. Any mechanism eventually supported by the Budget should be avoided. If a private company doesn't pay the bank, then taxpayer should not pay the bank for it," Jaitley had said a day earlier. 
 
Khara however said: "Bad banks are not essentially expected to pick up bad assets, but also turnaround these and make them profitable. Bad banks will have investors who see the turnaround of these assets." He said that banks had made assessments based on judgement and assumptions, many of which didn't turn out the same way but all decisions were not bad. "All banks make assessment. Not all decisions could be bad. Banks can segregate such assets and focus on justified lending," he added. 
 

Print Rate this article:
No rating

Number of views (115)/Comments (0)

S Vijaykrishnan
S Vijaykrishnan

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.