Lok Sabha Question No. 2325 (UNSTARRED), answered on 2021-12-13
Subject: Recovery of Bank NPAs
Ministry: FINANCE
Asked by: Shrirang Appa Barne, Ravi Kishan Shukla, Sanjay Sadashivrao Mandlik, Ravindra Kushawaha, Nishikant  Dubey, Prataprao  Jadhav, Bidyut Baran Mahato, Sudheer Gupta

## GOVERNMENT' OF INDIA MINISTRY OF' FINANCE

## LOK SABHA UNSTARRED QUESTION NO-2325

ANSWERED ON- 13/12/2021

## RECOVERY OF BANK NPAs

2325. SHRI SHRIRANG APPA BARNE SHRI RAVI KISHAN SHRI SANJAY SADASHIVRAO MANDLIK SHRI RAVINDRA KUSHWAHA DR NISHIKANT' DUBEY SHRI PRATAPRAO JADHAV SHRI BIDYUT BARAN MAHATO SHRI SUDHEER GUPTA

Will the Minister of FINANCE be pleased to state:

- whether the Government is actively pursuing the cases of loan defaulters in the country and outside the country and if so, the details thereof;
- whether the Governmentts 4Rs' strategy of recognition; resolution; recapitalization and reforms is successful in bringing down the NPAs;
- if the details thereof and the amount of money recovered through this strategy; and SO,
- the steps taken by the Union Government to ensure that Prime Ministers Development Package and other centrally sponsored scheme benefits every citizen of across the country including the Union Territory of Jammu and Kashmir?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

(DR BHAGWAT KARAD)

- (a) to (c): As per Reserve Bank of India (RBI) guidelines, banks are to have a loan reduction in NPAs, etc;, and banks make their recovery policies accordingly and draw  up recovery plans in light ofthe same: Banks pursue recovery actions loan defaulters through various recovery mechanisms available to them, such as of a suit in civil courts Or in Debts Recovery 'Tribunals, action under the Securitisation and Reconstruction Of Financial Assets and Enforcement of Security Interest 2002, of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code; 2016, through negotiated action defaulters Indian jurisdiction, the Fugitive Economic Offenders Act 2018 has been enacted to provide for attachment and confiscation of property Of fugitive offenders and has   disentitled them from   defending any  civil claim. Heads of PSBs have also been empowered to request for issue of Look Out Circulars: required against filing Act, filing fleeing against

As the RBL data, aggregate gross advances of Scheduled Commercial Banks (SCBS) in their per increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs 68,75,748 crore as global on along with wilful default loan frauds /corruption in some cases, economic slowdown; etc, were observed to be primary and provisioned bank balance-sheets revealed high incidence ofNPAs As 4 result for clean fully by banks, stressed accounts were reclassified as of AQR and subsequent transparent NPAs and expected losses on stressed loans, not for earlier under flexibility given to restructured loans; were for: Primarily as a result of transparent recognition Of stressed NPAs of SCBs rose from Rs. 3,23,464 crore as on 31.3.2015,to Rs: 10,36,187 crore and as a result of Government $ 4Rs   strategy of recognition,  resolution, on rccapitalisation and reforms, have since declined to Rs 8,35,051 crore as on 31.3.2021. period recognition provided provided including those under the 4Rs   strategy, have been taken by the and recover NPAs, which enabled SCBs to recover Rs 7,19,544 crore Government to over the last seven financial years. The steps taken include the following;

- (1) fundamentally changing the creditor-borrower relationship, taking away control of the defaulting company from promoters/owners, and debarring wilful defaulters from the resolution process To make the process more stringent; personal guarantor t0 Corporate debtor has also been brought under the ambit of IBC Under IBC, resolution plans have been approved in 394 cases up tO June 2021, with Rs 245 lakh crore amount realisable by financial creditors.
2. As RBI instructions, wilful defaulters are not sanctioned any additional facilities by 3) per financial institutions, and their unit is debarred from floating new ventures for banks or five years:
3. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest 2002 has been amended to make it more effective, with provision for three months' imprisonment in case the borrower does not asset details, and for the lender to possession of mortgaged property within 30 Act, provide days: get
4. Wilful defaulters and companies with wilful defaulters as promoters / directots have been debarred from accessing capital markets to raise funds, vide Securities and Exchange Board of India (Substantial Acquisition of Shares and 'Takeovers) Regulations, 2016.
5. With Government infusion supplementing the raising of capital by PSBs from market; them to take decision on resolution of NPAs without constrained on account of such decision impacting their profitability being
- 5) Pecuniary jurisdiction of Debt Recovery Tribunal (DRTs) was increased from Rs. 10 lakh to Rs: 20 lakh to enable the DRTs to focus on high value cases resulting in higher recovery for the banks and new DRTs have also been established to recovery. expedite
7. reforms have been instituted in PSBs as of the Public Sector Banks Reforms Agenda, including inter alia, the following part Key
- i) Board-approved loan of PSBs nOW mandate tying up necessary clearances/ = 'approvals and linkages before disbursement, scrutiny ofgroup balance-sheet and fencing of cash flows, non-fund and tail risk in project financing: policies appraisal ring-
9. Stressed   Asset  Management  verticals were set up in banks for focused slippage prevention; recovery arrangement and time-bound action in respect of value stressed assets: large-`
10. (iii) 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:
11. Toensure timely and better realisation in one-time settlements (OTSs), end-to-end OTS have been set up. platform
12. (v) Monitoring has been strictly segregated from sanctioning roles in high-value loans; and specialised monitoring combining financial and domain knowledge have been deployed for effective monitoring of loans above Rs. 250 crore: agencies

(d): Central government  sponsored schemes are announced time-to-time and the same are implemented across the country, including the union territory (UT) of Jammu and Kashmic: Detail guidelines are  issued for all such under these schemes are monitored/reviewed by the concerned Ministry/ Department On a basis. Besides, all the schemes are given wide publicity to create awareness among the citizen $0 that the benefits of these schemes   reach to maximum people: the Prime Development Package-2015 (PMDP) was announced on 7.11.2015 for the UT of Jammu and Kashmir; for etc: Ministry of Home Affairs has that it reviews progress under PMDP closely with the UT of Jammu and Kashmit, and with concerned Ministries/ Departments on a basis. regular apprised regular