urjit r patel : resolution of stressed assets - towards the endgame speech by dr urjit r patel, governor of the reserve bank of india, at the inaugural session of the " national conference on insolvency and bankruptcy : changing paradigm ", mumbai, 19 august 2017. * * * 1. honourable finance minister, shri arun jaitley ; chairman sebi, shri ajay tyagi ; chairman ibbi, dr. sahoo ; managing trustee, national foundation for corporate governance, shri chandrajit banerjee ; ladies & gentlemen. at the outset, i would like to compliment the organisers, ministry of corporate affairs, the insolvency & bankruptcy board of india ( ibbi ) and the national foundation for corporate governance, for arranging a conference on such a critical national issue. the gross npa ( gnpa ) ratio of the banking system at 9. 6 per cent and the stressed advances ratio at 12 per cent as of march 31, 2017, on the back of persistently high ratios in the past few years is, indeed, a matter of concern. 86. 5 percent of the gnpas are accounted for by large borrowers, i. e., borrowers with aggregate exposure of 5 crores and above. the challenge in dealing with the issue gets accentuated when observed against the capital position of some of the banks, particularly public sector ones. 2. swift, time - bound resolution or liquidation of stressed assets will be critical for de - clogging bank balance sheets and for efficient reallocation of capital. the government, ibbi and the reserve bank have been working together to comprehensively address the challenge through a multi - pronged approach. in brief remarks today, i intend to highlight the key dimensions of this convergent approach and share the underlying thinking. 3. the specific measures taken over the last few months, both by the government and the reserve bank, to strengthen the legal, regulatory, supervisory and institutional framework are aimed at the ultimate objective of facilitating quick resolution of stressed assets in a time - bound manner. the sense of urgency imbued in these measures is reflective of the intent not to allow things to drag any further. the recent measures address, inter alia, two key lacunae in the earlier framework : one, the absence of a hard - coded, time - bound period for resolution ; and two, the agency and coordination failures at banks and joint lenders forums ( jlf ) in pushing through viable

ermii ) and, later on, successful membership in the euro area. such an approach is beneficial both for the functioning of an enlarged euro area and for the performance of the economies of the new member states within monetary union. the greater the degree of the new member states ’ nominal and institutional convergence prior to the adoption of the euro, the smaller the variability of inflation and output across the euro area as a whole. put differently, adequate preparation for future expansions of the euro area will help to make the challenge of heterogeneity more manageable. let me conclude my “ movement of the concerto ” with a fitting quote from the american writer joshua j. marine : “ challenges are what makes life interesting ; overcoming them is what makes life meaningful. ” in this sense, i see both a very “ interesting ” and “ meaningful ” time ahead of us, for the ecb and economic policy makers in the european union. thank you very much for your attention.