(Livemint)
India’s interim finance minister said on Friday that the government was committed to support all public sector banks and strengthen their operations, after several lenders reported a jump in net losses last month. “The government stands committed to support all 21 public sector banks,” Piyush Goyal told reporters after a meeting with PSU bank chiefs.
He said a panel headed by Punjab National Bank CEO Sunil Mehta would examine whether banks needed to set up an asset reconstruction company for faster resolution of stressed PSU banks. Indian banks, already burdened by a near-record Rs9.5 trillion ($141 billion) of non-performing asset (NPAs) as of last year, reported a further rise in bad loans in the March quarter after the Reserve Bank of India (RBI) withdrew half a dozen loan-restructuring schemes and tightened some rules.
The 21 PSU banks, which account for two-thirds of banking assets in the country, hold close to 90% of bad loans. Goyal said the government and the Reserve Bank of India would make all efforts to bring PSU banks into a “good shape” so that they could once again become “an engine of economic growth”. “The government of India believes that the autonomy of the banks be recognised,” Goyal said, adding the government has not “micromanaged banks”.
