Lok Sabha Question No. 179 (STARRED), answered on 2018-12-21
Subject: NPAs
Ministry: FINANCE
Asked by: KIRTI (JHA) AZAD, BHARATI DHIRUBHAI SHIYAL

## GOVERNMENT  OF INDIA MINISTRY OF  FINANCE DEPARTMENT  OF FINANCIAL SERVICES

## LOK SABHA

## STARRED QUESTION NO: †*179 TO BE ANSWERED ON THE 21 st  DECEMBER, 2018/AGRAHAYANA 30, 1940  (SAKA)

## QUESTION NPAs

## †*179:   SHRI KIRTI AZAD: DR.  BHARATIBEN D. SHYAL:

Will  the Minister  of FINANCE  be pleased to state:

- (a) the details  of Non  Performing  Assets (NPAs)  as on May,  2014 and from the year  2014 till  date,  year-wise;
- (b) whether  the Government  is taking  any  steps to reduce  the said NPAs;
- (c) if  so,  the  details   thereof   along   with   the  date  on  which   these  steps  were initiated/implemented and the outcome  thereof;
- (d) the  details   of  various   panels   set  up to  put   a  check   on  NPAs   along   with   the outcome  thereof;  and
- (e) the  details   of  the  amount   spent  on  functioning   of  such  panels,   panel/datewise?

## ANSWER FINANCE  MINISTER (SHRI ARUN  JAITLEY)

- (a) to (e): A statement  is laid  on the Table  of the House.

***

Statement  as referred  to in reply  to paras (a) to (e) of Lok Sabha Starred Question no. †*179  for  answer on 21 st  December, 2018/  Agrahayana  30 (Saka), 1940  regarding  'NPAs' by SHRI KIRTI AZAD  and DR. BHARATIBEN D. SHYAL,  Hon'ble Member of Parliament

(a) to (e): The gross advances of Scheduled  Commercial Banks (SCBs) increased from Rs. 23,33,823  crore  as on 31.3.2008  to Rs. 61,00,848  crore  as on 31.3.2014, as per the domestic  operations  data of the Reserve  Bank of India (RBI). As per RBI inputs,  the primary  reasons for spurt  in stressed assets have been observed  to be, inter-alia, aggressive  lending  practices,  wilful  default  / loan  frauds / corruption in some cases, and economic  slowdown.  Asset Quality  Review  (AQR)  initiated  in 2015 for clean and fully  provisioned  bank  balance-sheets  revealed  high  incidence of non-performing  assets (NPAs).  As a result  of AQR  and subsequent  transparent recognition   by   PSBs,  stressed  accounts   were   reclassified   as  NPAs   and  expected losses  on  stressed  loans,   not  provided   for  earlier   under  flexibility given  to restructured  loans,  were  provided  for.  During  the financial  year  2017-18, all such schemes for restructuring stressed loans were  withdrawn. Primarily as  a  result of transparent  recognition  of stressed assets as NPAs,  gross NPAs  of SCBs, as per RBI  data  on  domestic   operations,   increased   from  Rs.  2,51,054  crore   as  on 31.3.2014, to  Rs.  3,09,399   crore   as  on  31.3.2015,   Rs.  5,66,247  crore   as  on 31.3.2016,  Rs. 7,28,740 crore  as on 31.3.2017,  Rs. 9,62,621 crore  as on 31.3.2018, and has declined  to Rs. 9,46,062 (provisional  data) as on 30.9.2018.  Public  Sector Banks reported  record  recovery  of Rs. 60,713 crore  in the first half of the current financial  year,  double  the amount  recovered  during  the first half of the previous financial  year.  Significant  further  recovery  is expected  as a number  of high-value accounts   are  at  advanced   stages  of  the  resolution   process  in  National   Company Law Tribunal.  As regards  NPAs  as on May  2014, RBI has apprised  that  it does not have information  in this regard.

The  Securitisation   and  Reconstruction of  Financial   Assets  and  Enforcement   of Security   Interest Act,   2002  has  been  amended   to  make it  more   effective  with provision  for three  months  imprisonment in case the borrower  does not provide asset details  and for the lender  to get possession of mortgaged  property  within  30

A number  of measures  have been taken  to expedite  and enable  resolution  of NPAs of PSBs over the last four years.  The Insolvency  and Bankruptcy Code,  2016 (IBC) has  been  enacted   to  create   a  unified   framework for  resolving   insolvency   and bankruptcy   matters.   Under   this,   by   adopting   a  creditor-in-saddle   approach,   with the interim  resolution  professional  taking  over management  of affairs of corporate debtor  at the outset,  the incentive  to resort to abuse of the legal  system  has been taken   away.   This,  coupled   with   debarment   of  wilful   defaulters   and  persons associated   with   NPA  accounts   from  the  resolution   process,  has  effected  a fundamental   change  in  the  creditor-debtor   relationship. The  Banking   Regulation Act,   1949  has  been  amended,   to  provide   for  authorisation to  RBI  to  issue directions   to  banks   to  initiate   the  insolvency   resolution   process  under IBC.  In exercise   of  powers   under   this   amendment,   RBI  directed   banks   to  initiate   the insolvency   resolution   process  under  IBC  before  the  National   Company   Law Tribunal in 41  cases,  12  of which had  cumulative   outstanding   amount   of Rs. 1,97,769 crore  as on 31.3.2017  and the remaining  29 had outstanding  amount of Rs. 1,35,846 crore  as on 30.6.2017.

days.   Also, six  new   Debts  Recovery   Tribunal   have  been  established   to  expedite recovery.

In addition,  under the PSBs Reforms  Agenda,  PSBs have created  Stressed Asset Management   verticals   for  stringent   recovery,   segregated   pre-  and  post-sanction follow-up  roles for clean and effective monitoring, initiated  creation  of online  onetime  settlement   platforms   and  committed   to  monitoring large-value   accounts through  specialised  monitoring agencies.

Action  with  regard  to control  and resolution  of NPAs  has been taken  through  the above legislative,  legal,  regulatory and reform measures,  and no specific panel  has been formed  by  the Government  in this regard.

Enabled by these measures,  as per RBI data on global  operations  (with  provisional data for September  2018), during  the last three  and a half financial  years,  NPAs  of SCBs reduced  by  Rs. 2,83,770 crore  due to recoveries.