Lok Sabha Question No. 2290 (UNSTARRED), answered on 2019-12-02
Subject: Property Confiscation for NPAs
Ministry: FINANCE
Asked by: Annpurna Devi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## LOK SABHA UNSTARRED QUESTION NO†2290

ANSWERED ON-2.12.2019

## PROPERTY CONFISCATION FOR NPAs

## †2290 . SHRIMATI ANNPURNA DEVI:

Will the Minister of FINANCE be pleased to state:

- (a) whether property has not been taken over or confiscated in the cases related to recovery of Non-Performing Assets (NPAs);
- (b) if so, the details thereof;
- (c) if not, the value of property taken over/confiscated in the cases related to recovery of NPAs during the last three years and the reaction of the Government thereto; and
- (d) the number of such cases in which property has not been taken over or confiscated with regard to the recovery of NPAs during the last three years?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI ANURAG SINGH THAKUR)

(a) to (d): As per data received from Public Sector Banks (PSBs) for the last three financial years (FY) i.e. 2016-17, 2017-18 and 2018-19, 1,73,210 properties having market value of Rs. 2,30,517 crore in respect of 1,45,493 number of NPA accounts has been taken over or confiscated through Securitisation and Reconstruction of Financial Assets and Enforcement of  Security  Interest  (SARFAESI)  Act,  2002,  Debts  Recovery  Tribunals  (DRTs),  National Company Law Tribunal, etc. The properties in respect of 64,394 number of NPA accounts have not been taken over or confiscated during the last three financial years which, inter-alia , depends on nature/quantum of loan, nature of security, stage of judicial process, etc.

PSBs have also effected record recovery of Rs. 3,35,770 crore over the last four financial years  and  the  first  quarter  of  the  current  financial  year,  including  record  recovery  of Rs. 1,27,987 crore during the financial year 2018-19.

Government has implemented a comprehensive 4R's strategy, consisting of recognition of NPAs transparently, resolution and recovery of value from stressed accounts, recapitalising of PSBs, and reforms in PSBs and the wider financial ecosystem for a responsible and clean system. Comprehensive steps have been taken under the 4R's strategy to reduce NPAs of PSBs, including, inter-alia , the following:

- (i) Change  in  credit  culture  has  been  effected,  with  the  Insolvency  and  Bankruptcy Code (IBC) fundamentally changing the creditor-borrower relationship, taking away control  of  the  defaulting  company  from  promoters/owners  and  debarring  wilful

defaulters from the resolution process and debarring them from raising funds from the market.

- (ii) The  SARFAESI  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 days.
- (iii) Suits for recovery of dues are also filed by banks before DRTs. Six new DRTs have been established to expedite recovery.
- (iv) Over the last five financial years including the current financial year till date, PSBs have been recapitalised to the extent of Rs.3.89 lakh crore, with infusion of Rs. 3.13 lakh crore by the Government and mobilisation of over Rs. 0.76 lakh crore by PSBs themselves enabling PSBs to pursue timely resolution of NPAs.
- (v) Key  reforms  have  been  instituted  in  PSBs  as  part  of  the  PSBs  Reforms  Agenda, including the following:
- (a) Board-approved  Loan  Policies  of  PSBs  now  mandate  tying  up  necessary clearances/approvals and  linkages before disbursement, scrutiny of  group balance-sheet and ring-fencing of cash flows, non-fund and tail risk appraisal in project financing.
- (b) Use  of  third-party  data  sources  for  comprehensive  due  diligence  across  data sources has been instituted, thus mitigating risk on account of misrepresentation and fraud.
- (c) Monitoring  has  been  strictly  segregated  from  sanctioning  roles  in  high-value loans,  and  specialised  monitoring  agencies  combining  financial  and  domain knowledge have been deployed for effective monitoring of loans above Rs. 250 crore.
- (d) To ensure timely and  better realisation  in  one-time  settlements  (OTSs),  online end-to-end OTS platforms have been set up.

Note: Figures cited  above  for  PSBs  include  those  for  IDBI  Bank  Limited,  which  was  recategorised  as  a private sector bank by RBI with effect from 21.1.2019 .

*****