Government expects state-run banks to cut bad loans by Rs 3 lakh crore in FY19

Government expects state-run banks to cut bad loans by Rs 3 lakh crore in FY19

The government is expecting the state-run banks to trim their bad loans by as much as Rs 3 lakh crore this financial year, mostly through debt resolution plans under the Insolvency and Bankruptcy Code (IBC). It is hopeful that public sector banks won’t need capital infusion in excess of what has been budgeted due to improvement in performance and sale of non-core assets, officials said. “In some cases, promoters have already started paying off their debts for fear of losing their company, which has led to reduction of debt,” one of the officials said. The resolution of Bhushan Steel, the first stressed asset to be resolved under the IBC from the list of 12 large defaulting accounts identified by the RBI in June 2017, will lead to a reduction of Rs 35,000 crore in non-performing assets (NPAs) at state-run lenders. 

Read More at The Economic Times News date : 30 May 2018, Wednesday

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