Lok Sabha Question No. 131 (UNSTARRED), answered on 2020-09-14
Subject: Industrial NPAs
Ministry: FINANCE
Asked by: Ashok Mahadeorao Nete

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## LOK SABHA UNSTARRED QUESTION NO-+131

ANSWERED ON-14.09.2020

## Industrial NPAs

## +131. SHRI ASHOK MAHADEORAO NETE:

Will the Minister of FINANCE be pleased to state:

- a) whether the Non-Performing   Assets (PAs)   relating to big   industries and corporate   houses   have increased sharply as compared to Micro,  Small and Medium Enterprises Sector due to non-repayment of of the banks the last three years; loans during
2. the steps taken   by the  Government to promote Small and Medium Enterprises sector and to increase the recovery of from the corporate houses? Micro, loans
3. () if so, the details thereof and the reasons therefor; and

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI ANURAG SINGH THAKUR)

- (a): As per Reserve Bank of India (RBl) data on domestic operations, nonperforming assets (NPAs) of scheduled commercial banks (SCBs) pertaining to industry and services come down to Rs. 4,36,492 crore as on 30.6.2020 (provisional data) from Rs. 6,35,971 crore as on 31.3.2018, registering a decline of 31%. No, large have
- (6): Question does not arise.
- (c): A number of steps have been taken to promote the Micro, Small and Medium Enterprises (MSME) sector These include, inter the following: alia,
- Revision of the definition of MSME units to allow more enterprises to avail of benefits for MSMEs and to help existing MSMEs expand;
- (1) RBI dispensation permitting banks and non-banking financial companies (NBFCs) to restructure GST-registered standard MSME accounts with exposure of up to Rs. 25 crore, without downgrading the account as NPA under which Public Sector Banks (PSBs) restructured over 6.51 lakh MSME accounts till March 2020;
- (3) Removal of on credit for loans to MSMEs in the services sector for classified as priority sector lending; ceiling being
- Mandating of SCBs by RBl to not accept collateral in case of loans "p to <10 lakh extended to units in the Micro and Small Enterprises sector; security
- Launch of pre-approved loans under Emergency Credit Line Guarantee Scheme for sanction of Rs. 3 lakh crore to eligible Small and Medium Enterprises (MSMEs); Micro,
- to provide relief under COVID-19 pandemic; including, inter-alia, the following: Steps
- (ii) Launch of Credit Guarantee Scheme for   Subordinate Debt for stressed MSME units to help sustain and revive MSMEs which either become NPA or are on the brink of becoming NPA; and have
- Introduction of externally benchmarked interest rates fof all fresh rate loans to retail borrowers and micro and small enterprises from October 2019 onwards   and to medium enterprises   from April 2020 onwards, to ensure effective transmission of policy rate cuts; floating

(i) Reassessment of working capital limits of borrowers; existing

- up of\_Loan   Management Systems and Centralised  Processing Centres in Public Sector Banks (PSBs), resulting in loan disbursement turnaround time reducing ftom 31 in the fourth quarter (Q4) of the financial year (FY) 2017-18 to 10 in Q4 of FY2019-20; Setting retail days days
- (9) Use of the Trade  Receivables  Discounting System  (TReDS) for  Online financing of trade receivables of MSMEs on competitive terms;
- (8) Launch of PSBloansinS9minutes.com for digital for MSMEs and borrowers; lending retail
- (10) Initiation of end-to-end digital processing of loans to micro-enterprises by the State Bank of India through eShishu Mudra platform;
- (12) RBI-announced Rs, 15,000 crore Special  Refinancing for  Small Industries Development Bank of India (SIDBl) for on-lending/ret purposes; and Facility financing
- (11) Relief to banks in theit Cash Reserve Ratio requitement ftom Februaty to July 2020 for incentivising to MSMEs, automobiles and residential lending housing;
- (13) SIDBI-announced Schemes for Special Liquidity Support to NBFCs, Micro

With regard to recovery of loans from the corporate houses, a number of steps have been taken in this regard; enabled by which SCBs effected a tecovery of Rs. 5,48,749 crore the last five financial years, including Iecord tecovery of Rs 1,56,692 crore FY 2018-19, the largest proportion of which was on account of recoveries made in NPAs of industry and services: taken in this regard, inter are the following: during during large Steps alia,

- (1) in credit culture has been effected, with the Insolvency and Bankruptcy Code (IBC) fundamentally changing the creditor-borrower relationship, away control of the defaulting company from promoters / owners at the outset; and debarting   wilful defaulters from the resolution process: make the process more stringent; personal guarantor to Change taking To

corporate debtor has also brought under the ambit and Insolvency Resolution Process can now be started personal guarantors as well been against

- (2) Under IBC, resolution have been approved in 250 cases till June 2020, with Rs. 1.89 lakh crore realisable amount; of which Rs. 1.36 lakh crore was approved in eight of the twelve corporate accounts that were referred to the National Company Law Tribunal on RBLs direction (as per the website of the Insolvency and Bankruptcy Board of India): plans large
- 4) Wilful defaulters and companies with wilful defaulters as promoters / directors have been debarred from   accessing markets to raise   funds, vide Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2016. capital
- (3) As per RBI instructions, wilful defaulters are not sanctioned any additional facilities by banks Or financial institutions, and their unit is debarred  from new ventures for five years. floating
- (5) As per RBI instructions; banks are fequired to submit teport on weekly basis to Central Repository of Information on Credits, in case of any default by borrowing entities with exposure of Rs. 5 crore and above: Large
5. In addition, under the Public Sector Banks (PSBs) Reforms Agenda, measures been taken: following have
- (6) The Securitisation and Reconstruction of Financial Assets and Enforcement of Secutity Interest 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 Act, days:
7. Creation of Stressed Asset Management verticals in banks for focussed slippage Prevention, recovery arrangement and time-bound action in respect of large-value stressed assets;
8. (Setting up of online; endend One-Time  Settlement portals and platforms in banks to ensure timely and better realisation; and to-
9. () Deployment of specialised monitoring agencies combining financial and domain knowledge fof effective monitoring of loans above Rs. 250 crore;
10. (v)Institution of technology- and data-driven risk and scrutiny in banks,  which  comprehensively   factors in third-party data and nOnfinancial tisk factors and ensures higher scrutiny of high-tisk cases scoring

xxxxx