Enthused by the impact of new insolvency and bankruptcy code, 2016 the government expects bad loan recoveries to exceed Rs 1.80 lakh crore from the estimated target for the current financial year 2018-19, an official said. A senior Finance Ministry official told the Press Trust Of India (PTI) that some big accounts are in the process of getting resolved while some more are lined up for resolution under the Insolvency and Bankruptcy Code (IBC) 2016. The official further told that “Going by the success rate, we hope that the recovery would exceed our own target of Rs 1.80 lakh crore through the IBC and other means”. To support his statement he cited some of the ongoing resolutions of Essar Steel and Bhushan Power and Steel Ltd.
It has been estimated by the government that if the same trend continues, it will be Rs. 1.80 lakh crore advances in the recovery target. In the financial year, 2017-18 banks have to pay Rs. 74,562 crores. It is reported that in the current financial year (2018-19), up to now 36,551 crores have been recovered in the first quarter of 2018-19. The Banks hopes to write back more than Rs 1 lakh crore alone from the resolution of 12 NPA cases referred to insolvency proceedings by the Reserve Bank of India (RBI) in its first list. From the first list, two big cases Essar Steel and Bhushan Power and Steel Ltd are at the final stages of resolution, while Binani Cement and Jaypee Infratech are also under the process. The Banks believe that they will be able to get around 86% of the 49,000 crore liabilities.
The Finance Minister Arun Jaitley had said "now people have become broadly aware that the rules of the game in India have changed. The banks won't chase you anymore; you will have to chase them."
Tags : #bad loan Recoveries