The central government’s measures such as enacting the Insolvency and Bankruptcy Code (IBC) along with strengthening other laws have enabled the banks to recovers bad debt amounting to Rs 5.5 lakh crore.
In fact, about Rs 1 lakh crore of this sum has been recuperated from accounts that were technically written off. This comprises some key recoveries via the process of IBC from the likes of Essar Steel, Bhushan Steel, Bhushan Power & Steel including others.
Money has also been retrieved from written-off cases like Kingfisher by the banks.
Moreover, the government opines that the state-run lenders, who have recovered about 3.1 lakh crore since March 2018, are well-equipped to fulfill the credit necessities upon adequate capitalization as the build-up of non-performing activities (NPAs) has been lower than expected.
Furthermore, the public-sector banks are also properly safeguarded against any prospective obstacle with a provision coverage ratio of about 83 per cent.
One of the senior officers from the finance ministry told the Times of India, “Overall, despite the pandemic, the turnaround is remarkable for public sector banks. The recent reforms and the proposed asset reconstruction company will help clean up their balance sheets further and make fresh capital available from the sale of bad assets, which will again push credit growth.”
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.