Govt to help banks get into shape, no sparing loan defaulters: Arun Jaitley

NEW DELHI: Finance Minister Arun Jaitley on Saturday said that the top priority of the government was to get the Indian banks back in shape. He added that more resources will be found and as and when required to boost their capital. Jaitley said that loan defaulters will not be spared, according to an IANS report.

File photo: Arun Jaitley 
Speaking at Gyan Sangam (a retreat for the heads of banks and financial institutions with finance ministry officials, central bank leaders and other key policy-makers), Jaitley said that if more funds are required, we will find out more sources.

He said that steps such as the proposed bankruptcy law will help banks to a large extent in recovering their loans.

Jaitley as per the report said that they have a lot of ideas on how to improve the debt recovery tribunals and SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act. The act empowers the banks to recover loans without the intervention of the court.
He further said that strong banks are what is needed and there should not be any weakling in the link. Adding that strong banks are need rather than just a large number of banks that the country.

He said that the government will not write-off bad loans and that they are keeping banks immune to politics.
Jaitley also said the government is considering ESOPs for PSU bank officials besides strengthening the SARFAESI Act and Debt Recovery Tribunals to deal with the problems of stressed assets that are estimated at around Rs 8 lakh crore.
“Government is considering (the proposal of ESOP for bank employees). It is in very advanced stage… It has been long standing demand, and is (under) an active consideration,” Jaitley said.
There could be niche banks and banks which could survive independently and sustain themselves well, he said, observing that the Gyan Sangam strongly supported the idea of consolidation in the banking sector.
With regard to the rising Non-Performing Assets or bad loans, Jaitley said that besides strengthening the institutional mechanism, the government has been taking sector specific decisions to deal with the problems in segments like power, highways, sugar and steel.