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.”