No Defaulter Will Be Spared, Warns Arun Jaitley


The second “Gyan Sangam”, the retreat of heads of public sector financial institutions, concluded today at the State Bank Academy, Gurgaon. The two-day Retreat for banks and financial institutions aimed at taking forward the government’s commitment to reforms in the banking and financial sector.
Here are the highlights of what Finance Minister Arun Jaitley said at the press conference:

Consolidation of several banks; Need strong banks and not more banks
Government won’t write off bad loans, no defaulter will be spared
As far as recovery is concerned, there are enough steps banks can take to recover (bad loans) under existing norms. Some banks are trying , some assets are transferred, and banks get the money bank.
Asset quality review has been completed by RBI
Banks have enough rights to undertake recovery steps from defaulter
We are also considering ESOPs for bank employees. This is at advanced stage of consideration.
There are several suggestions to amend the Sarfaesi and DRT acts. This is at advanced stage of consideration
Government keeping banks immune to politics

Minister of State for Finance Jayant Sinha said:
There was discussion on stress asset banks
Several types of bad bank discussed
On non core assets ( for banks to recover loans): This was not a major discussion topic here. But there is an effort to monetize non core assets
Government is in talks with banks, the situation is being monitored
If more funds are required, the resources will be found
Stake of international firms in state-run banks: It’s up to RBI to see whether they want to relax it for private banks. Nothing for government banks yet.