PSU banks are now expected to write off Rs. 1.20 lakh crore NPA in the financial year 2018. Speaking about this breakthrough in the banks, Finance Minister Arun Jaitley on Tuesday remarked that “the light at the end of the tunnel” was visible in the context of NPAs.
Non-performing assets were on the rise in the public sector banks leading towards drastic loss of Rs 8.41 lakh crore. The new development augments new signs of loan recovery for them.
The Insolvency and Bankruptcy Code and NCLT proceedings were having a positive effect on recoveries and prompting promoters to pay their dues before the legal process began, the Minister said. The banks also said they expected credit growth to pick up over the year, he added.
“The public sector banks are expecting a recovery of about Rs. 1.8 lakh crore from the Insolvency and Bankruptcy Code (IBC) proceedings and from outside those proceedings,” Financial Services Secretary Rajiv Kumar said, a point reiterated by Mr. Jaitley.
“This year, and it’s still early days of the IBC, but already the impact is clearly visible,” Mr. Jaitley said.