(FE)
Finance minister Nirmala Sitharaman is expected to meet the heads of the public sector banks on December 28 to discuss the credit flow to micro, small and medium enterprises (MSMEs) and the status of IBC cases, banking sources told. The government wants to review the progress following various steps taken by it in recent past. In September, Sitharaman asked banks not to declare stressed MSME loans as NPAs till March 2020.
This meeting is taking place at a time when banks have been referring unresolved stressed companies to the National Company Law Tribunal (NCLT). Lenders are reeling under pressure to adhere to the provisioning timelines for resolution of stressed assets. According to the June 7 circular, the banks have to make an additional provisioning of 20% if the resolution plan is not implemented within six months, and another 15% if resolution plan is not implemented within a year, taking the burden of additional provisioning to 35%.
