Lok Sabha Question No. 2497 (UNSTARRED), answered on 2016-03-11
Subject: Recovery of Loans
Ministry: FINANCE
Asked by: SANJAY JAISWAL, PANKAJ CHOWDHARY, ANANDRAO  ADSUL, KAVITHA KALVAKUNTLA, DHARMENDRA YADAV, Shrirang Appa Barne

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

## LOK SABHA

UNSTARRED QUESTION NO †2497

TO BE ANSWERED ON THE 11 th  MARCH, 2016/ PHALGUNA 21, 1937 (SAKA)

## RECOVERY OF LOANS

†2497. DR. SANJAY JAISWAL                                         SHRIMATI KAVITHA KALVAKUNTLA

SHRI PANKAJ CHAUDHARY                               SHRI DHARMENDRA YADAV SHRI ANANDRAO ADSUL                                   SHRI SHRIRANG APPA BARNE.

Will the Minister of FINANCE be pleased to state:

- (a) whether  the  Government  has  any  proposal  to  form  National  Asset  Reconstruction  Company (NARC) for bad loans of stressed banks, if so, the details thereof along with the salient features of the NARC;
- (b) whether  the  Government  proposes  any  policy  to  ensure  time-bound  closure  of  legal  cases pertaining to Non-Performing Assets, if so, the details thereof ;
- (c) whether the bad loan has increased due to providing loans to corporate houses despite their huge outstanding  loans;  if  so,  the  details  thereof  during  the  last  three  years  and  the  current year; and
- (d) other steps taken/being taken by the Government to recover such huge amount of loans from corporates?

## ANSWER THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI JAYANT SINHA)

- (a) The  Government  does  not  have  any  proposal  to  form  National  Asset  Reconstruction Company (NARC).
- (b) Debt  Recovery  Tribunals  (DRTs)  have  been  set  up  by  the  government  for  facilitating recovery of Banks/Financial Institutions' dues under Recovery of Debts due to Banks and Financial Institutions Act, (RDDBFI), 1993. Under Section 19 (24) of the act, DRTs have been mandated to dispose off the applications filed by Banks/FIs within a period of 180 days from the date of receipt of application.
- (c) The reasons for increase in NPAs include slowdown in recovery in the global economy and continuing uncertainty in the global markets leading to lower exports of various products like textiles, engineering  goods,  leather  and  gems  etc.,  factors  like  volatility  in  prices  of  raw  material  and  the shortage in availability of power to some sectors.

The details of Gross Advances and Gross NPAs to corporates by Scheduled Commercial Banks (SCBs) are as under:

| Rs in crore           | Rs in crore       | Rs in crore       | Rs in crore       |
|-----------------------|-------------------|-------------------|-------------------|
| Corporate Lending     | Corporate Lending | Corporate Lending | Corporate Lending |
| Year                  | Gross Advances    | Gross NPAs        | GNPA Ratio        |
| 2012-13               | 31,11,761         | 1,00,118          | 3.22              |
| 2013-14               | 34,06,025         | 1,54,955          | 4.55              |
| 2014-15               | 36,15,133         | 1,93,123          | 5.34              |
| 2015-16 (till Dec 15) | 38,41,836         | 2,60,653          | 6.78              |

(d) The  Government  has  taken  specific  measures  to  address  issues  in  sectors  such  as Infrastructure  (Power,  Roads  etc.),  Steel  and  Textiles,  where  incidence  of  NPAs  is  high.  The government has also approved establishment of six (6) new Debt Recovery Tribunals (DRTs), to speed  up  the  recovery  of  bad  loans  of  the  banking  sector,  in  addition  to  existing  thirty  three. Reserve Bank of India (RBI) has also undertaken steps which include (i) Formation of Joint Lenders' Forum  (JLF)  for  revitalizing  stressed  assets  in  the  system,  (ii)  Flexible  Structuring  for  long  term project  loans  to  Infrastructure  and  Core  industries,  and  (iii)  Strategic  Debt  Restructuring  (SDR) scheme.

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